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			'title' => 'Financial Sector Reform Very Slow',
			'sub_title' => '',
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			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" height="123" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/fncci1.jpg" vspace="2" width="300" />Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID. Among the main objectives of the programme were to improve the financial standings of the two major state owned banks, Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL). The programme also looked at enhancing the institutional and supervisory capacities of the central bank.<br />
	<br />
	<div>
		Both the banks had foreigners as Chief Executives as well as part of the management teams while NRB too had foreign consultants in various positions. Speaking at a discussion programme organised by Nepal Economic Association to discuss ‘Financial Sector Reform Programme: Lessons Learnt and The Way Forward’ Dr Khatiwada observed, “Reform does not mean employing consultants, it is rather an exercise in building institutional capacities.”<br />
		 </div>
	<div>
		&nbsp;The Chief Executive Officer of Lumbini Bank, Shovan Dev Pant made a paper presentation highlighting the private sector perspective. Pant appreciated the private sector’s contribution towards the development of Nepal’s financial sector. Speaking on the occasion, Finance Secretary Rameshwor Khanal refused to accept that the financial sector reform has derailed. “However, it is progressing at a very slow pace,” he said. Citing the example of several major banks collapsing at the start of the global recession, Khanal remarked that banking has an intense domino effect when compared to other sectors.<br />
		 </div>
	Among the other speakers at the programme, former NRB Governor Bijaya Nath Bhattarai opined that the loan defaulters are the major reason for impeding reforms. Dipendra Bahadur Kshetri, also a former NRB Governor, argued that home-grown experts are competent enough to manage Nepali banks and suggested that the reform programme must be carried forward under their leadership.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID.',
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			'id' => '273',
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			'title' => 'Multinationals Rule The Roost AtFNCCI Excellence Awards 2010',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/biz news.jpg" style="width: 458px; height: 173px;" vspace="2" />Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Similarly, Unilever Nepal won the Service Excellence Award while Surya Nepal received the People’s Excellence Award. Prime Minister Jhala Nath Khanal gave away the awards to the winners amidst a special function organised by FNCCI recently.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI).',
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			'id' => '272',
			'article_category_id' => '40',
			'title' => 'FISCAL FACE OF NEPAL'S FEDERALISM',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<i><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/achyut  wagle.jpg" style="width: 114px; height: 147px;" vspace="2" />By Achyut Wagle</i></p>
<div style="text-align: justify;">
	Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda. The preamble of the Interim Constitution of Nepal 2007 has baptized the country as the Federal Democratic Republic Nepal. The Article 138 of the same Constitution has provided basis for restructuring the state.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Both, the constitutional and circumstantial yokes now guide Nepal, for better or worse, to perhaps irreversible journey to federalism. But, matter of factly, that is all in theory. Practically, there is a wide political space to be covered between the present unitary state to a judiciously delineated, stable yet functionally acceptable-to-all federal structure of future Nepal. Yet again, the federal Nepal is impossible to imagine without bringing the fiscal frame of federalism into forefront of the state restructuring discourse, which now seems to have obliqued by hyperboles on either side of the political debate.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Despite an euphoria of a sort to resolutely adopt a federal system, the objectives envisaged by the Interim Constitution in this particular regard appear rather slanted. The very concept incorporated in the Article 138 does not accept federalism by-and-large as an economic phenomenon. It proposed to ‘end the disparities’ of various forms, but hardly prescribes modality for prosperity and optimal use and scientific redistribution of resources. The worst proposition in the constitution is: it has authorised the government, not the Constituent Assembly (CA) to constitute the State Restructuring Commission, which is supposed to give impartial technical inputs.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	It is apparent that the federal structure of the nation cannot be finalised without technical report from the Commission, and thus, organising constitution writing process would not <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img.jpg" style="width: 367px; height: 182px;" vspace="2" />complete without the Commission and its inputs. Apart from this, the constitutional provision regarding the Commission gives more ominous than the virtuous signal. The authority given to the government to form this Commission provides an edge to the party in power to make it comfortable to itself and therefore, chances of its report being politically biased remain higher. Why was not the responsibility of constituting such a commission vested to the all powerful CA is a question unanswered so far.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Nevertheless, Nepal has no alternative to writing a new constitution, sooner or later. That new constitutional framework must embrace the federal set of polity and structures. Of all the structures, fiscal federalism will be both – defining and delineating basis of the sub-national administrative units, and also the means to ensuring justifiable (re)distribution of resources, prosperity and welfare. For all these reasons, the fiscal federalism is and should be at the centre, in all discourses related to the federal restructuring of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Essence of Federalism</strong></div>
<div style="text-align: justify;">
	Federalism is unique and in a way paradoxical concept. First, it seeks to consolidate the national unity while creating newer and larger number of sub-national units; ostensibly by divisions. Second, its objective is to recognise the social, linguistic and/or cultural identity without diluting the overall national identity. And, the third, it strives to bring the government nearer to the people that has a better sense of autonomy in deciding their own fate, but without severing its ties and dependence to the farther government – the one at the centre.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For many, federalism is merely an administrative re-mapping of the political geography of the nation. Creation of sub-national structures, that may be called state, province, prefecture or anything of the kind, seems to the prime objective of Nepal’s ongoing debate on federalism. But, how these new structures evolve and exercise the state power – mainly to meet the economic needs of the citizenry – would determine whether any nation is essentially federal or not. Nepal cannot be exception to this fundamental theoretical premise.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The functions, duties and rights of the federal unit are defined by the extent of power a unit can exercise. Its authority depends on the adoption of universally accepted models to extract power from among the – delegation, decentralisation or devolution, or combination of all of these. And, at the heart of all of these lies – the democracy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	There are very large nation-states world over with varying number of sub-regional administrative units. But, in absence of democratic dispensation, right from the grassroots, these units can only exercise very limited state authority delegated or marginally decentralised by the centre. Only power devolved by democratic exercise can only create a federal state, true to its sense.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Fiscal Federalism at the Centre</strong></div>
<div style="text-align: justify;">
	The concept of fiscal federalism, and for all practical purposes, the entire frame of federalism, is generally summed-up in three major</div>
<div style="text-align: justify;">
	<br />
	components – namely the tax-point transfers, equalisation grants and convincingly justifiable distribution of resources mainly the natural resources among the sub-national units. There are other peripheral, operational or fringe issues too. But in effect, the main three would largely incorporate them all. There are also several models of both ‘fiscal’ and ‘general’ federalism. But, they too do not necessarily go beyond these three fundamentals of federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Also, there are views against the perspective of limiting the ‘entire federalism’ to the ‘fiscal alone’ proposition. It is <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover img1.jpg" style="width: 406px; height: 461px;" vspace="2" />more apparent in Nepal’s discourse on federalism. Even the top-hats of major political parties who would be deciding the ultimate frame of Federal Nepal also tend to believe that without specific mention of issues like political inclusion, rights-based access to state and recognition of racial and ethical identities, the very purpose of federalism, at least for them, could be defeated. The level of understanding of our CA members on such technical and essentially academic issues is better not to raise here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In fact, unlike the popular beliefs, the issues of inclusion and identity are rather purely economic issues. For example, the inclusion is not sought in any abstract issues, it is rather meant to ensure inclusion in employment, benefits and other economic opportunities. Even the preservation of identity either is an economic activity in itself, or it has a cost to develop and preserve the different facets that give an identity to people and communities – like language, scriptures, rituals, customs, traditions and culture.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	These realities make it imperative that Nepal’s discourse on federalism needs an immediate and meaningful re-orientation, so as keeping the fiscal federalism at the centre of all exercises aimed at state restructuring. And, highly extensive technical and factual details and their analyses would require deciding on the size and the borders of new sub-national states. Nepal does not seem to have even initiated the process of those financial and other statistical number crunching, so far. Therefore, the claims that constitution could be written within a month ‘if’ the parties agrees are unrealistic platitudes. Expert believe that it would take at least six months of rigorous effort for a highly competent professional team to finalise the issues related to fiscal federalism – i.e. tax, distribution of natural resources and, of course, demography and geography.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In the hindsight, this is also an indication that it is impossible to complete the constitution writing by the stipulated deadline of 27 March 2011. Also, political campaigning to create new states on the basis of caste, community or even some extreme demands like ‘One Terai, One Province’ do not present potentiality for financially viable provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Technical Considerations</strong></div>
<div style="text-align: justify;">
	Financially justifiable and economically functional sub-national delineation is going to be perhaps the most challenging aspect to give Nepal a federal shape. All three major aspects – tax point transfers, equalisation grant and distribution of natural resources among the provinces – involve larger number of murkier issues than the easier ones.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Apart from these, several other components of fiscal relations between the central and sub-national governments, financial management and its processes within the state must also be decided to effectively devolve power to the people at the grassroots. Such issues may relate, but not limited to planning, economic diplomacy, money market and specialised institutions for both fiscal and financial architecture. Given Nepal’s poor governance and slanted nature of understanding about fiscal federalism even at the top-rung of political leadership, the country seems to be making ommitive than spontaneous jump to fiscal federal structure. These are some of the reasons why these issues deserve more <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img2.jpg" style="width: 342px; height: 158px;" vspace="2" />meaningful discussion, before the country could decide on the actual frame of federalism, essentially the fiscal federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Tax Point Transfers</strong></div>
<div style="text-align: justify;">
	One of the key components of federalism is the decision on the jurisdiction of major tax collection points, i.e. which sub-national government will administer or operate a particular tax point, the types of taxes a province would collect and how the collected revenue would be distributed between the centre and the state, and, sometimes among the states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In case of Nepal, the decision on the jurisdiction of tax points could face double pronged problem. First, only six customs points collect over 90 per cent of the customs revenue <i>(Table 1)</i>. And, the amount of collection at only the points that lie in two zones – Bagmati and Narayani of the Central Region, account for well above sixty per cent. The customs revenue generally accounts for 25.3 per cent of the total revenue.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Similarly, the revenue contribution of four districts is above 80 per cent and this reaches to 94 per cent if added another four districts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This situation does not only present high tax concentration in the Kathmandu Valley and the central region but also poses a serious challenge to divide the provinces so as each of them can have reasonably attractive tax collection points within their territory. It also indicates to the reality that despite adoption of federal structure, the financial dependence of the provinces could yet remain with Kathmandu. And, even worse, this economic factor cannot be drastically altered soon by a mere political decision.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In addition to deciding on the tax point jurisdiction, decision on the kind of taxes that provinces can impose and the taxes that would directly go to central accounts is also going to be a difficult one. Generally, property and service taxes are levied by the local bodies, sales and value added taxes go to the provincial government and customs and income taxes go to the central government accounts. This assumption appears suitable in the case of Nepal too, as our vertical administration is accordingly stratified in three tiers.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Equalisation Grants</strong></div>
<div style="text-align: justify;">
	Despite tall asks of autonomous and semi-autonomous provinces on different bases, the fiscal and financial fundamentals do not support the possibility of creating such states. The basis of autonomy is the abundance of physical and financial resources available within any given political unit. As evident in the tax collection patterns, the revenue resource does not support such an ‘autonomous state’ except the one created at the centre, incorporating Kathmandu.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Until the state-to-be-created in the federal set-up are capable of mobilising their own resources, the equalisation grant, the money given by the centre, will be the most dependable source to finance the development and public delivery of goods in the provinces. Even on this count, our debate on federalism seems unduly titled to political considerations alone. In the most ideal cases of revenue and grant sources of funds, dependence to centre remains pretty high. For example, the provinces of Switzerland are entitled to keep 50 per cent of the revenue collected and Canadian ones can hold up 47 per cent of it. These are the highest rates of centre-province revenue sharing the world over. In this light, the ‘autonomous’ state advocated in Nepal appears pure farce.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	But, in our case, the ‘sustainability’ or ‘survival’ side of the new states has never been debated thoroughly as the issue deserved. There are also demands of creating separate provinces like ‘Karnali’. One could easily imagine the level of would-be financial dependence of such states to the centre. Such scenario implicitly infer that centre must once again remain strong as it will have to continuously dole out money to so called autonomous provinces, and, it in turn, has to be strong in effect to gather enough amount of resources to be able to meet the needs of all these new ‘baby’ states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Natural Resources</strong></div>
<div style="text-align: justify;">
	The distribution of natural resources among the new provinces is another difficult and unavoidable task on effecting federalism. There are several examples of serious disputes between the provinces regarding the rights to use such resources. The Kaveri and Narmada river disputes in India are classic examples to it.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In Nepal, water, forest, mines and minerals and land (mainly cultivable) are considered major natural resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For us, one advantage of this resource vis-a-vis federal imperatives is that, it is fairly evenly distributed given that we agree to justifiably allocate them to generally acceptable size and number of states; say five to nine.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Recently, some campaigns misinterpreting the international instruments like ILO Article 169 have compounded the problem. But, lately the people involved in the indigenous rights movements themselves are becoming somehow disillusioned to deliberate misleading campaigns of yesteryears. However, natural resources will still remain a major basis of re-delineation and the process will surely be difficult.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Other Issues</strong></div>
<div style="text-align: justify;">
	There are several other issues which have to come to the forefront in the discourse on federalism. They include, whether a province should have authority to carry its own economic diplomacy to accept or endow financial assistance from and to international community; whether it can have its own finance bill; or would it have own supervisory and regulatory authorities independent of central oversight or would they just function as extended line agencies, etc. Equally complex is the issue of large infrastructure projects, their management, ownership and return – if any.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Unfortunately, Nepal as the country as a whole, and CA in particular as the only responsible constitutional organ to debate all these provisions to include in the new constitution, have remained far short of initiating meaningful deliberations. Whatsoever, Nepal in executing the federal structure must ensure unfringeable private property rights universally in all the states, freedom to movement of products and services as well as people, unhindered trade and business transactions between the states and uniform (underently different) tax structure, among others. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Article 138 of the Interim Constitution</div>
<div style="text-align: justify;">
	138. <b>Progressive restructuring of the State: </b></div>
<div style="text-align: justify;">
	(1) <span>&nbsp;&nbsp; There shall be made progressive restructuring of the State with inclusive, democratic federal system of governance, by doing away with the centralized and unitary structure of the State so as to end discriminations based on class, caste, language, gender, culture, religion and region.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(1a)&nbsp;Recognizing the desire of the indigenous peoples and of the people of backward and other area including Madhesi people towards autonomous provinces Nepal shall be a federal democratic republican state. Provinces shall be autonomous and vested with full authority. The boundaries, number, names and structures, as well as full details of the lists, of autonomous provinces and the center and allocation of means, resources and powers shall be determined by the Constituent Assembly, while maintaining the sovereignty, unity and integrity of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(2) &nbsp;There shall be constituted a high level commission to make suggestions on the restructuring of the State as referred to in Clauses (1) and (1a)&nbsp;The composition, function, duty, power and condition of service of such commission shall be as determined by the Government of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(3) <span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The final settlement on the matters relating to the restructuring of the State and the form of federal system of governance shall be as determined by the Constituent Assembly.</span></div>',
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			'description' => 'Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda.',
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			'id' => '271',
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			'title' => 'Bases For Fiscal Federalism',
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			'content' => '<div style="text-align: justify;">
	The following article represents Dr Devendra Raj Panday’s research-based paper presented at a symposium titled “Fiscal Federalism in Nepal” in August 2009 in Kathmandu. The extract is printed here with his consent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The studies on fiscal and financial federalism concentrate on how financial and monetary institutions’ functions might be arranged and a mechanism for coherent policy making and monitoring established for the state to produce expected outputs. It involves the assigning of spending, taxing and borrowing powers between the centre and the other tiers of government and the focus of responsibility and accountability in fiscal management. In many ways, it is an act of political decision and bargaining – in the course of finalising the constitution and making yearly decisions especially on taxation, revenue sharing and allocation of grants by the centre for various purposes. In all this, efficiency and equity, often in conflict with each other, become issues of major concern. In order to do the needful, the national economy has to run efficiently, produce growth and provide stability that is necessary for broader development. At the same time, the aggregate growth must not create or sustain imbalances, vertically and horizontally. It means that further continuation of centre within the periphery syndromes in governance is not acceptable from both economic and political standpoints. The discrepancies in economic and social status of various regional or provincial economies must be narrowed down with the ‘marginal benefits’ of growth going disproportionately to the disadvantaged and economically and socially excluded people across the country. There are several ways in which fiscal efficiency balanced well with equity considerations can be pursued.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	First, allowing ‘independent fiscal regime’ for the provinces should not dilute the common market character of the federation. Simultaneously, it should also be kept in mind that the free flow of goods and services and investment across the provinces can result in favour of better-equipped regions that may already be relatively better off than others. In theory, there should be economic convergence of different regions under free trade with the mobility of factors as well as goods and services. But we know from Nepal’s experience as a player in the international economy as to how difficult it is for a least developed country (or a region within a country) to compete with better endowed, resourceful and experienced economies. Less developed provinces in the federation deserve the same treatment politically, economically and morally as historically, Nepal as a least developed nation has demanded internationally, including in SAARC mechanisms.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Second, there has to be an understanding and a political consensus on the degree of competition and the spirit of cooperation to be pursued among the constituent units of the federation. The neo-liberal economic approaches sometimes display contradictory positions in this respect. On the one hand, there is the market preservation argument which expects the federation to work in harmony and have the states produce and trade goods without any barriers that would endanger the national market’s efficient working. On the other, there is a view that there should be constitutional guarantees against regulating inter-state flow of goods and services, to perhaps avoid the kind of situation in India where there is no harmony in some taxes levied in the states and on their policies concerning inter-state movement of goods and services. Meanwhile, the liberal ideology also illustrates the idea of ‘competitive governments’ and argues that the states must compete with one another in providing incentives to attract mobile capital and other factors into their territory to punish the laggards. The preference for competitive federalism where the states may compete among themselves to maximise their own welfare at the cost of other provinces may reflect the ‘beggar thy neighbour’ strategy of yesteryears. This is a critical point since, like in the overall design of economic liberalisation, only the relatively prosperous states would benefit from competitive economic and fiscal policies. In post-1990 India where the states are encouraged to compete with each other for attracting investments into their territory, some states have done well, but at the cost of growing inter-state disparities and regional imbalances. Nepal can ill afford a similar practice. It would also run counter to the social objective of federalism which is to reduce disparities and imbalances, not to increase them. Once again, purposeful pragmatism calls for an approach that would optimise people’s welfare at the provincial and local levels and encourage entrepreneurship and investment all around without the states jeopardising each other’s interests and the overall interest of the national economy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Third, in the practical task of expenditure and revenue assignment, efficiency consideration is implicit in the widely held opinion that before considering taxation, assignment of expenditures among different tiers of government should be taken care of. The idea in this ‘money to follow work’ principle is that taxation and borrowing powers of the states and assumedly, the centre’s should not be independent of specific obligations they undertake for discharging public functions and the volume of expenditures required for that purpose. The idea is to ensure that all states are empowered to provide comparable public services regardless of their revenue capacities. Beyond this, the expenditure assignment is expected to be guided by economic considerations whereby the central as well as provincial and local governments provide services whose benefits accrue to the residents within its jurisdiction and where the costs of the provisions incurred can be internalised within that jurisdiction. To put it simply, the responsibility for the provision – where the benefits from a given service are distributed nation-wide such as the country’s defence, the Supreme Court or the national highway system – lies with the centre. If the benefit incidence of a given service is limited to primary and secondary education or water supply and sanitation, the provision is best readied by provincial and local governments. The opportunity to save on transaction costs and the possibility of harnessing the economy of scale in fiscal operations are associated elements of the process.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fourth, in a developing country where both the expectations and the requirements of the people are high, assigning expenditures for the centre and the constituent states does not only mean slicing the existing budget into central and provincial items of expenditure and dividing tax revenue accordingly. It also means taking into account the responsibilities to deliver services that the people could not have earlier. It also means undertaking various development works for generating social goods that can be provided or ensured to finance them. The challenge will arise from policy matters and in the pursuit of related priorities. For agriculture, education and health among others, the centre may wish to promote certain norms and targets considered desirable from the national viewpoint. The states in charge of these assignments can have different ideas especially if the same political party or the coalition of parties is not in charge at the centre and specific states. The centre will have other concerns including those that are part of its international commitments. Such commitments can be about trade and environment as they can be about national and international human rights standards concerning the status of women, children, indigenous people etc. And there are commitments about Millennium Development Goals (MDGs) with further complications arising from the possibility that many of the related functions will come under the purview of provincial governments. Consequently, expenditure assignment also becomes responsibility and accountability assignment against which the availability of matching revenue needs to be guaranteed. The centre has an obligation to address these issues as it negotiates the tax sharing arrangements and, particularly, the conditional and unconditional grants’ transfers from the centre to the provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fifth, there are four areas of concern that should guide the process on taxation. One, every jurisdiction needs adequate tax revenue to finance the assigned and necessary expenditures. To make up for the shortfall in one jurisdiction, the better endowed among others should have the incentive to engage in revenue sharing. Two, efficiency consideration will be as important in the assignment of taxing power as in spending, more so due to its direct impact on the working of the common market. The incentives and disincentives in the tax structure on a given jurisdiction, especially for the mobile factors and the consumers of public services are critical. Taxation assignment requires appropriate study of tax bases, possible overlapping of incidence, the spill-over effects and the population that stands to benefit from the spending facilitated by such taxes. Three, the distribution of taxing authority among the different tiers of government has a significant bearing on equity. The residence based taxes on income and property may be appropriate for the provincial and local governments, but any tax with significant redistributive power, such as progressive income tax becomes suitable only for the national government to enforce national priorities on equity and broader development. Four, administrative efficiency including transaction cost considerations will also guide the assignment of taxing power. On this basis, some taxes become suitable even for sub-provincial or local governments for eventual sharing vertically where local conditions and administrative set up can help administer it better.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sixth, apart from the question of specific taxes to be assigned to the centre and the provinces, a decision about the collecting agency is also important. Some taxes available for meeting public expenditures may be collected and used by only one jurisdiction. One such example could be the property tax levied and collected by local governments. Such tax base can also be shared between the local and provincial governments. Some taxes may be collected in one jurisdiction and used by all. For example, income tax can be collected by the centre and shared with others. In all these cases, the tax base, its incidence and the administrative cost of collection will be important considerations. From a political perspective, the perceived or pursued autonomy of the provinces vis-a-vis the centre will play its part. There is a potential conflict in the way one asserts ‘states power’ and the compromises needed in the interest of efficiency as well as equity in the interest of national bonding.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Seventh, as in Nepal’s case of federalism by ‘devolution’ and not ‘aggregation’, the central government retains its basic strength and power which applies to fiscal arrangements too. The centre must have absolute power to collect taxes from the domains of individual provinces and use the funds collected to meet expenditures it deems important across the country. In almost all the important federal countries, the share of the central government in total public revenue (collected by the centre, the provinces and the local governments) is above 50 per cent. In Nepal, the economic reality – the likely wide variations in the economic status and revenue bases of different regions and the social imperative of redistribution – will undoubtedly vest the centre with considerable authority and responsibility in this respect.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Finally, besides redistribution, it is critical that the central government be adequately empowered to undertake stabilisation functions, on the one hand, and monitor the economic and distribution effects of inter-jurisdiction competition, on the other. It is prudent and practical to let the centre have exclusive authority over stabilisation function and use its power of the purse in a way where the provincial governments have an incentive to follow the national priorities even as they are bound to come into conflict with priorities established by them in their provincial interests.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<i>(Dr Panday retired from government service as Secretary of Finance and became the Finance Minister in the first government formed after the restoration of democracy in 1991.)</i></div>',
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			'title' => '‘We Need A Strong Central Government With Fiscal Redistribution Power’',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Ram Sharan Mahat.jpg" style="width: 192px; height: 217px;" vspace="2" />Dr Ram Sharan Mahat</b></div>
<div style="text-align: justify;">
	Former Finance Minister</div>
<div style="text-align: justify;">
	The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How would mobilisation of resources take place under the federal structure?</strong></div>
<div style="text-align: justify;">
	Mobilisation of resources is imperative to run the government irrespective of whether there is a federal structure or not. Under the federal structure, there will be governments both at the central and provincial levels. Therefore, resources will be mobilised at both ends. Apart from the revenue sources under their respective jurisdictions listed in the constitution, there will be a concurrent list of revenue sources imposed at both levels. In federal countries, the centre as well as the provinces impose taxes and duties such as income tax and excise duty which raises the burden on the taxpayers. Duties are normally collected by the centre at a single point for administrative convenience but shared at both levels. In addition to the central tax, the provinces piggyback to a certain extent, however, remaining within limits defined by the respective framework legislation. For example, if the central income tax is 25 per cent, the province may add another 5 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The source of revenue in Nepal at present are centralised in a few districts. Under such situation, how can fiscal balance be maintained when Nepal becomes federal?</strong></div>
<div style="text-align: justify;">
	This is definitely a big challenge. The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run. People think that once they have a separate province, they will have all the autonomy and freedom. But if the province has no resource of its own and depends on the central allocation even for day-to-day administration, the autonomy has no meaning. Therefore, one has to be very careful while carving out the provinces. The decision should also be based on long term viability and economic sustainability of the regions, in addition to other considerations. Unfortunately, at present the most vocal demand relates to provinces based on ethnicities.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of regional disparity due to unequal distribution of resources and sources of revenue?</strong></div>
<div style="text-align: justify;">
	The common fallacy among the ardent federalists in Nepal is that regional disparity will be narrowed and poverty banished once there is a federal structure. This is wrong. Resources and development potential are unequally distributed and so are the revenue sources. Competition among provinces with differing resource endowments could accentuate regional disparities instead of narrowing down unless there is intervention from the centre. For this, the centre must be strong with redistributive power. In the USA, there are serious regional disparities. West Virginia’s per capita income is less than half of Connecticut’s. In India, Haryana’s per capita income compared to UP and Bihar is three to five times higher. Please note that India is not the perfect example of a federal structure. India, at best, can be regarded as a quasi federation with a strong centre. So, this situation in India is despite central intervention.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should federal Nepal’s fiscal policy focus on to ensure appropriate and equal distribution of resources among the provinces?</strong></div>
<div style="text-align: justify;">
	There is no alternative to a strong central government with fiscal redistribution power to ensure equity and economic justice. All provinces should have uniform access to basic services like education, health, electricity, roads and other socio-economic services. For this to happen, poorer provinces will need central support through a mechanism called Equalization Fund. A fiscal mechanism to ensure transfer of resources from rich to poor provinces is necessary. It is precisely for this and other reasons that revenue from major sources like customs, income tax, and partially VAT and excise must go to the centre. If you look at Nepal’s case at present, these sources practically yield no revenue. If they are brought under provincial jurisdiction, most federal units will have no income at all.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t there been a meaningful debate on state restructuring and the form of federal system?</strong></div>
<p style="text-align: justify;">
	It is not that there are no debates taking place. But generally speaking, the focus has largely been on ethnic lines rather than on long term sustainability and from development perspective. Most people have a vague idea about federalism and what it will deliver. State restructuring is not just about the country’s division into federal units. It is more than that – such as ensuring people’s empowerment at the basic level. Democracy is after all the empowerment of individuals, beyond communities and societies. It could be ensured with strong decentralisation but there has hardly been any debate on that.</p>',
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			'description' => 'he provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces.',
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		'Article' => array(
			'id' => '269',
			'article_category_id' => '40',
			'title' => '‘We Must Have Small Number Of States For Financial Feasibility’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bijaya Nath Bhattarai.jpg" style="width: 153px; height: 173px;" vspace="2" />Bijaya Nath Bhattarai</b></div>
<div style="text-align: justify;">
	Former Governor, Nepal Rastra Bank</div>
<div style="text-align: justify;">
	The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the monetary aspect of federal Nepal?</strong></div>
<div style="text-align: justify;">
	Nepal Rastra Bank (NRB) is the authority for all monetary issues in Nepal. NRB has its branches and sub branches spread all over the country. It not only works as a fiscal agent but also facilitates commercial banks through operating currency chests. It regulates the money supply, flow of liquidity and supervises and regulates banks and financial institutions. In the federal structure too, the currency in use will be the same and there will be a solitary central bank which will be responsible for providing all central banking functions to every state in the country. There won’t be separate currencies for individual states. But all monetary issues should be controlled by a central regulator i.e. Nepal Rastra Bank.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>In a federal structure, the state revenue, expenditure and debts will have to be shared between central and local governments. How practically feasible will this be for Nepal?</strong></div>
<div style="text-align: justify;">
	As far as I know, the countries with federal structure have different forms of taxation. Some are levied by the central government while some others are at the states and municipal levels. There are three types of taxation. The municipal taxes would be the income of the particular municipality. Similarly, state taxes would be the revenue of the states. The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley. Then come the Terai hubs namely Bhairahawa, Biratnagar, Birgunj and Nepalgunj followed by towns like Pokhara and Hetauda. The economic activities in other areas are minimal. Therefore, resource mobilisation and sharing will be difficult proposition for federal Nepal. On the question of debt management, there needs to be an agreement on issuance of debt, use of debt and final repayment of debt. Most of the country’s debt issuance and repayment is at the central government level.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The rising recurrent cost is already eating up the country’s revenue generation capacity. With governments at the provincial levels, the overall administrative and recurrent public expenditure is likely to shoot up with no commensurate growth in revenue. Wouldn’t this be an alarming situation?</strong></div>
<div style="text-align: justify;">
	Resources remaining after fulfilling the recurrent expenditure are used in development activities. This is supplemented by the resources and means obtained from foreign aid and loans for development activities. The resources thus mobilised would be further divided in the federal system. Then there would be chances for even less resources and means left for development projects. The revenue grows along with the economic development of the country. If the country under federal system moves ahead and develops economically, the national income will grow. We can take Switzerland as an example where the per capita income is around US$ 34,000. But our country’s situation is such that federal structure can actually lead to resource crunch. The far western region, especially Karnali, is least developed. There are other under developed regions too where the conflict had escalated due to unequal distribution of income and resources. In such areas, the resources injected have to be comparatively higher. This would leave very little resources at the centre’s disposal. It would be ideal to have a small number of states and small state structures. Only then will we be able to mobilise resources effectively. At present, I see a faint possibility of introducing new forms of taxation for increasing resources. During the past decade or so, there have been very few new investments. Even now, the investment environment is gloomy for domestic as well as foreign investors. Foreign aid and internal resources mobilised by the state have not been effectively utilised. As a result, there is a liquidity crisis in the financial sector. The government has not been able to address budgetary issues well. There is fiscal imprudence which is reflected by large non-budgetary expense at the central level. It will be necessary to maintain strict fiscal discipline in a federal system. The non-budgetary expense has to be lowered to a minimum. If we can do that and utilise resources effectively for development, the situation may improve over the years as the economy will then grow. However, the current resource distribution pattern could invite complications.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we decrease current expenses so that more resources can be allocated in development activities?</strong></div>
<div style="text-align: justify;">
	We have very limited resources. So, when we want to divide them among the centre and the states, there could be complications. While making a transition to the federal structure, we should make sure that the structure envisioned by the constitution is small and dynamic. For example, there are more than 600 representatives in our existing Constituent Assembly. This number is massive given the size of our country. Compare this figure with our neighbouring country India which has 552 members in its lower house of parliament. It is said that our federal parliament will follow a bicameral system, for greater representation of every region. The number of representatives should be brought down significantly from the present one to ensure low governance costs. Also the size of the provincial government must be small and effective. If this is not ensured, very little resources would be left for development activities after dividing them among central and regional governments.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There has been no real debate on the economics of Nepal’s federal structure. Given this, how can we be definite about the direction we are heading?</strong></div>
<div style="text-align: justify;">
	I agree that there must be a serious debate on this issue. The statesmen and the CA too have not discussed fiscal federalism seriously. Major issues such as the availability of resources and means and the model of federal structure must be discussed now. I personally feel that without serious debates, going for federalism might backfire on the country in the long run. Nepal has limited resources. Therefore, the demarcation of states based on ethnicity could prove to be a dangerous proposition. It will definitely promote ethnic conflict among our own people. And we definitely don’t want Nepal to follow the example of Yugoslavia. The states must be divided based on economic reality.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What reforms do you think are required once we go federal?</strong></div>
<div style="text-align: justify;">
	Well, there are a lot of things that need to be reformed. Our GDP and tax ratio are lower compared to many countries. We can look at increasing tax compliance. In the recent past, media has reported tax evasion by big business houses. All citizens must feel that paying taxes is their duty and it should not be evaded. Greater tax generation will enable the state to mobilise adequate resources for development and social causes. Nepal has started providing social security allowances for elderly people. In the coming days, the state can offer free medicines and health services to the economically deprived people. For that, a sense of responsibility in people must develop to ensure tax compliance. If the government can take the role of a facilitator and focus its investment in infrastructure, Nepal can experience a prosperous economic development. The problems that we face today are that of infrastructure, labour relations and power. As per reports, around 200 small industries have closed shop owing to power shortage. Similarly, many industries have experienced decline in output due to labour unrest. The political parties must unite for national and development issues irrespective of their ideological differences.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being one of the poorest countries in the world where there is little revenue left for development after incurring current expenditures, can we afford a federal form of government?</strong></div>
<p style="text-align: justify;">
	If we see economically, it is very difficult due to the resource constraints. As and when we enter the federal structure, it will be necessary to differentiate federal and state taxes. Let’s take the example of the USA where the sales taxes are collected by the states. Similarly, the municipal and income taxes are collected, respectively, by the municipalities and the federal government. Our main sources of revenue are VAT, customs duties and income tax. The land tax, rental tax and other smaller taxes are collected by the municipalities. I think the problem in Nepal arises due to centralisation. The rights must be decentralised. If small structure and decentralisation of rights can be ensured, there is no need to create new states in the name of federalism. There are districts where there have been no economic and development activities. We have seen in the past also that the situation of conflict was invited by economic inequality. This inequality is due to the imbalance in economic opportunities for different regions and the failure of implementing economic development plans. The mid western and far western regions are the most backward regions of the country. Despite huge potential, Karnali region remains grossly underdeveloped. If the planners in the past had successfully taken the decentralising path, the people wouldn’t have been left dissatisfied. This happened due to huge economic disparity between the various regions. An economically decentralised country holds more promise than a&nbsp; federal structure.</p>',
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	(int) 6 => array(
		'Article' => array(
			'id' => '268',
			'article_category_id' => '40',
			'title' => '‘Development In One Region Should Complement Development In Another’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Pitamber Sharma.jpg" style="width: 163px; height: 182px;" vspace="2" />Dr Pitamber Sharma</b></div>
<div style="text-align: justify;">
	Geographer and Regional Planner</div>
<div style="text-align: justify;">
	There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The interim constitution says that the states, once created, must be autonomous. To ensure such autonomy also in the economic field, the states must have ample resources. How do you see the feasibility of such economic autonomy of the proposed states?</strong></div>
<div style="text-align: justify;">
	Being self-reliant will depend on the number of states and the criteria on which they will be created. In Nepal, autonomy is interpreted only in the political sense. It is often forgotten that political autonomy remains circumscribed in the lack of economic autonomy. If a state or province has to rely on the centre for all its development needs, how can it exercise autonomy in political or economic decision-making? All states may not have all the resources. However, care should be taken that each state is carved, as much as possible, in a way that it has at least some basic resources to complement its development efforts. There are 14 states proposed by the Constituent Assembly’s state restructuring committee. Many of these proposed states are simply not viable economically or politically. I believe that in Nepal we still have enough scope to design states as planning units. The foresight we show today will make it easier to deal with the problems of tomorrow.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the appropriate geographical delineation for distribution of natural resources among the new states?</strong></div>
<div style="text-align: justify;">
	Nepal is a country with enormous geographical and topographical diversity. This diversity in many ways has determined the type and distribution of natural resources. The Terai plain as well as the Inner Terai are rich in agricultural resources. This area also has a unique wildlife. Similarly, the hills and mountains are rich in biodiversity resources, hydro power, nature- and culture-based tourism resources etc. The element that links and complements the geographical diversity between the hills and the plains is the hydrological system – the major river basins of Nepal. There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources. However, we do not live in an ideal world. While natural resource endowment is important, equally important are the historic aspirations of the diverse communities that inhabit the different regions. These aspirations also need to be addressed in the formation of states. Nepal’s move from a unitary state to a federal one is dictated in many ways by these aspirations.<span>&nbsp;&nbsp; <br />
	<br />
	</span></div>
<div style="text-align: justify;">
	In a country like Nepal, the crux of the issue of federalisation is that the development in one geographical and resource region has to complement the development of another region. That is the basis on which the resources need to be considered in designing federal states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some political parties are strongly raising the demand for states based on ethnicities. How challenging will it be to manage and distribute the resources along these lines instead of geography- and resource-based states?</strong></div>
<div style="text-align: justify;">
	The political discourse on federalisation in Nepal has been dominated primarily by the issue of ethnicity. Not much attention has been paid to the attributes of an ethnic state, or even what comprises an ethnic state. Some people are scared of the word ethnicity altogether. The reality is that ethnicity makes a significant difference in the lives of people.&nbsp;Nepal has 100 designated ethnic groups according to the 2001 census. And there are 92 languages spoken in the country. Major ethnic/caste groups in Nepal have their territories of traditional habitation. The groups have settled continuously, are relatively concentrated, and have a significant and dominant, if not majority presence in particular areas. This is true for all large and small aadibasi and janajati groups and the Chhetris. However, the dalits do not have their own distinguished geographical territory or a separate identity by virtue of language.&nbsp;This is in spite of the fact that they comprise the third largest ethnic/caste group and the most marginalised population in Nepal.<br />
	 </div>
<div style="text-align: justify;">
	If all major ethnic groups in Nepal were to have their own states, it would be an enormous challenge to manage and distribute natural resources. Ethnic boundaries rarely coincide with resource boundaries. Even macro watershed would be divided among different ethnic domains. All hydropower resources would be in the domain of hill/mountain ethnic groups, with none in the Terai. The capacity of ethnic states to deal with the issues of mitigation and adaptation to climate change would be extremely limited. It is because this would require a coordinated watershed level response.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think that the redistribution of resources may ignite resource conflict after the formation of new federal states?</strong></div>
<div style="text-align: justify;">
	As I have mentioned earlier, much would depend on the criteria used in the designation of states, and of course the number of states created. The experience of other countries show that conflicts over control, regulation, use, benefit and maintenance of resources, particularly water, are among the common conflicts resulting from federalisation. Constitutional provisions are therefore made for arbitration and resolution of such conflicts. (Highlight.) The redistribution of resources is ensured mainly through inter-governmental transfers. However, to assure that the central government has enough resources to offset imbalances between the states, some clarity is required with respect to the share of local/state revenue going to the central treasury.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, you think the 14 states proposed by the CA’s State Restructuring Committee is not practical?</strong></div>
<div style="text-align: justify;">
	The idea of 14 states proposed in the draft report of the Constituent Assembly’s State Restructuring Committee, in my view, is neither rational nor appropriate. For a country of Nepal’s size, 14 states will be too many.&nbsp;If ethnicity is the only criteria considered for the designation of states, I see no justification for at least four of the proposed states.&nbsp;Jadan has a population of 50,000 while Bhotes comprise only 1.2 per cent of Nepal’s population. Sherpas total only 90,000 people and a mere 21 percent of Nepal’s total Sherpa population live in the proposed state. Additionally, Sunkoshi and Narayani have as mixed a population as any other ethnic state. One of the major problems with the report is that it does not lay down any principles for states’ formation. For example, when does an ethnic group merit the status of a state as opposed to an autonomous region within a state?<span>&nbsp;&nbsp; The report does not provide answers to these kinds of questions.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Running and maintaining the state affairs is a costly proposition. How would the states help in mobilising resources for the nation while meeting their own recurring costs?</strong></div>
<div style="text-align: justify;">
	At present, only nine among the 75 districts are in a position to generate revenues that go beyond meeting their recurrent expenditures. In other words, if all the proposed states of Nepal are to be in a position of meeting their recurrent expenditures and generate a surplus, it is basically from the revenue from these nine districts that will have to be somehow apportioned among the states. As I said earlier, inter-governmental transfers will have to play the key role in maintaining the financial viability of the states. Inter-governmental transfers should ensure that (a) all expenditure assignments of the states can be met through these grants and (b) that it should also provide the basis for basic long-term investments required for mobilising resources. In Nepal’s case, for example, the states falling under the current mid and far-western regions will need massive investments from the centre for at least 10 to 15 years, by which time they could be self-sustaining. Investments by the centre on key infrastructures in the state will remain crucial. One of the problems that the state governments in poorer states will have to face is the flight of capital as capital flies out from low-yielding states to high-yielding states. A situation can easily arise where the poor states become poorer while the rich ones become richer. This will emerge as a big challenge in the management of federalism. The success of the federalism enterprise may as well lie in the extent to which they are enabled to mobilise resources.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What may the reason that there is no meaningful debate taking place on state restructuring and the form of federal system?</strong></div>
<div style="text-align: justify;">
	The political parties are ignoring the most critical and operational issues of federalism. It was Maoists who raised the issue of the federal republic and turned it into a national agenda, and they did it right. The rationale for the federal republic was to break, once and for all, the shackles of a feudal, overtly centralised, monarchic, predatory state. This was a historic achievement. For the first time in nearly two-and-a-half centuries, it set the stage for redefining and reimagining Nepal. But the Maoist perception went astray because of taking ethnicity as the sole basis for federalisation. As a result, the question of resources, development and meaningful devolution of power remained ignored. The two other major political parties – the UML and the Nepali Congress – are still taking time to fully own the idea of a federal Nepal.&nbsp;It is evident from their reactive approach to the whole issue, so much so that their official positions are not yet clear. The Madhes based political parties too made the federal agenda their main political plank. But they only took it as far as it challenged the colonial flavour of the policies of the hill-centred Nepali state vis-a-vis the Madhes. The ‘one Madhes, one state’ slogan was raised as a vehicle for economically circumscribing the hills and making it a hostage of the Madhes, however defined. The ethnic dimension is critical and important but no less important is the issue of dealing with poverty, exclusion, and in a fundamental sense, the mode and meaning of development. The two issues are no doubt linked but one cannot be a substitute for the other.<br />
	 </div>
<div style="text-align: justify;">
	Thus the debate has centred on issues of identity and emotion rather than the more substantive issues of strategy and resources for development. I believe that once the dust settles and the states come into being, development will once again emerge as the agenda around which politics will revolve.<span>&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should be the main objective of federalism in Nepal’s context?</strong></div>
<div style="text-align: justify;">
	The objective of federalism in Nepal should be the creation of a prosperous country which will benefit all, irrespective of ethnicity, caste or class. The rational for federalism in Nepal has to rest on three premises. The first is the recognition of the ethnic, linguistic, cultural and regional identity and aspirations of the diverse population groups that inhabit Nepal. For over two centuries, the Nepali speaking, upper caste hill dwellers following the Hindu faith namely Bahun and Chhetri enjoyed the privileged patronage of the Nepali state.&nbsp;Shared ownership of the state requires that progressive ethnic, cultural and regional identities are given due recognition. The second is to facilitate rapid, equitable and inclusive development so that livelihoods of all, and particularly of the vulnerable, marginalised and disadvantaged groups, can be rapidly improved. This requires that adequate attention is paid to natural and human resources that can provide the basis for equitable and inclusive development. The third is to decentralise and devolve power to the lowest possible level so that the roots of a truly participatory and accountable democracy are strengthened.</div>
<p style="text-align: justify;">
	Two concepts, I believe, can help us move towards a federalisation that takes identity, inclusive development and devolution as the point of departure.&nbsp;The first is the concept of ethnic/caste groups that have suffered from historic discrimination and have a dominant presence in geographically adjacent and contiguous areas. The second is the concept of special autonomous areas. Following the first concept, federal units can be formed around a few major ethnic/caste/language group habitats that have historically remained in adjacent or contiguous areas, and have developed a sense of ethnic affinity over time. Such federal units can incorporate areas with existing or potentially sustainable natural resource as well as economic base. Following the second concept, special autonomous areas can be designated within federal units with particular ethnic/caste dominance.</p>',
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	(int) 7 => array(
		'Article' => array(
			'id' => '267',
			'article_category_id' => '40',
			'title' => '‘Political Parties Must Honour The Constitutional Provision And Form State Restructuring Committee',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Prakash Chandra Lohani.jpg" style="width: 162px; height: 180px;" vspace="2" />Dr Prakash Chandra Lohani</b></div>
<div style="text-align: justify;">
	Former Foreign and Finance Minister and Co-Chairman of Rastriya Janashakti Party</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The state restructuring committee has not been formed yet. What are the reasons behind it?</strong></div>
<div style="text-align: justify;">
	It is clearly specified in the interim constitution that we should have a state restructuring committee. So, it is the responsibility of the government as well as of the political parties to ensure that the state restructuring committee is formed. The government as well as the major political parties have not fulfilled this responsibility. In fact, the state restructuring committee should have been formed while the Constituent Assembly was in its first session. The fact that this has not been done as yet is a reminder of our negligence towards the constitutional provision. I think when Pushpa Kamal Dahal was the prime minister, he tried to form it. He nominated Dr Ganesh Gurung to head it but the parties concerned were not able to agree with the names of other members. So, the body formed with Dr Gurung as its head did not take the full shape. It became a one-man defunct body. After Dahal left, Madhav Kumar Nepal took over the reins. At that time also, smaller parties like ours have been constantly telling the bigger parties to meet this constitutional provision.<br />
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it. When madhav Nepal was the Prime Minister, I don’t know if he ever tried to push this process forward. Most of the time, his government and the Maoists were at loggerheads with each other. There was no real initiative to draft the constitution. They spent their energy in the struggle for power. That is the reason why the state restructuring commission has not been formed yet. In fact, it was not an agenda of priority for the Maoists, Nepali Congress and the UML.<br />
	 </div>
<div style="text-align: justify;">
	They simply ignored this issue. Now, after the year-long extension of the Constituent Asembly, normally one would expect them to try and form this committee. However, they have ignored this again and we are now left with only two-and-a-half months from the deadline for promulgating the constitution. And still there is no seriousness about satisfying this constitutional provision. This is a sad story, to say the least. Now, the Maoists are saying that it doesn’t make any sense to form the state restructuring commission because the thematic committee working on state restructuring has already come out with its report. But what we have been saying is that this is a constitutional provision. If this provision has to be ignored, then people must prepare a proposal, make a constitutional amendment, take it to the parliament and remove this article from the constitution. As long as this article is there, we have to make sure that we honour it. I am sure this is an issue that will come up in our subcommittee meeting soon.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, it would not be possible to go ahead with the state restructuring without the commission’s report?</strong></div>
<div style="text-align: justify;">
	The state restructuring commission has to submit its recommendation before we make a final decision on state formation in this country and on the number and size of the provinces and many other issues related to federalism. We cannot ignore this constitutional provision. The responsibilities of the committee are to advice and provide suggestions.<br />
	 </div>
<div style="text-align: justify;">
	The constituent assembly has a right to either reject or accept them. Therefore, we must give them the opportunities as specified in the constitution. I think if we go about deciding the number of states without the commission’s recommendation that would be ignoring the provision of the constitution. It would neither be proper or correct nor acceptable.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why has there been no meaningful debate held so far for state restructuring?</strong></div>
<div style="text-align: justify;">
	It’s because different political parties have different propositions. Their formal proposition is different from what they say in informal interactions. This is also the part of the problem. I think if we have a state restructuring committee, it would help solve some of these contradictions. There has not been serious debate among the political parties primarily because the three major political parties have not given attention to this issue. They are involved in power struggle all the time and busy speculating on who would be the next prime minister. In a way, it is their sense of irresponsibility and negligence towards the commitment made to the people when the constituent assembly elections were held.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Which model of fiscal federalism would be most appropriate for Nepal?</strong></div>
<div style="text-align: justify;">
	It is the question of devolution of authority. One of the more important aspects of this is the financial authority. Till now, Nepal has been a centralised state. Most of the resources are collected by the central government. Now, we want to make sure that we devolve fiscal authority to states and also to the village development committees (VDC) so that they can raise resources on their own. I personally think that if the central government raises 60 per cent resources, remaining 40 per cent would be raised by the local government bodies, states and the VDCs.&nbsp;We have to work along the line of fixing such a ratio. I think 60:40 ratio would be quite logical.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of improper distribution of revenue in federal Nepal as the source of revenue would not be uniform in all the states?</strong></div>
<div style="text-align: justify;">
	I think we also need a financially strong central government. This is because, inevitably, some provinces are going to be financially weak. They may have the resources but these are largely unexploited. For example, in the hilly areas, hydro resources are there but it will take time to exploit them.In the mean time, we will have to find a way to compensate them for the lack of resources. That needs transfers from the central government.</div>
<div style="text-align: justify;">
	It will work out depending on population, human development index and so many other relevant variables. We have to give a sense of equity and justice to people in all the provinces of this country.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The idea of ethnicity based federal structure has courted big controversy. How does ethinicity-based federal structure fare in terms of fiscal federalism?</strong></div>
<div style="text-align: justify;">
	There is a big controversy on this issue. No doubt about that. Different political parties have recommended number of provinces varying from seven to 14. One of the remarkable things is that no particular ethnic group is in the majority in their proposed respective states. Take the case of Limbuwan, for example. In Limbuwan, you have a total of 30 to 35 per cent Rais and Limbus if you combine both the communities. The rest 60 to 70 per cent are non-Limbus. Therefore, to go ahead with the idea of ethnic states, in a way, might alienate the other majority population and may create ground for conflict.<br />
	 </div>
<div style="text-align: justify;">
	The important thing is representation in the provincial and national parliament in line with the ethnic distribution. We have to assure and be clear on that point. Once you achieve that, I don’t think we should stress too much about this ethnic issue. People want representation in the power structure. And that representation must reflect the underlying distribution of the ethnic population. Once there is the electoral system, it makes sure that the ethnic representation is there in line with their ethnic distribution of population in the country. I think it would solve a lot of problems. Once you move in this direction, emphasis on ethnicity alone is going to wield less importance.</div>',
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			'title' => 'The Importance Of Enterprise  Performance Management',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<i><img alt="anil" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/1303899771.jpg" style="width: 105px; height: 156px;" vspace="5" /><br />
	<br />
	<strong>By Anil Neupane<br />
	</strong><br />
	</i></div>
<div style="text-align: justify;">
	Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities necessary to reach those objectives. It is often referred to, with the usage of terms such as Corporate Performance Management (CPM), Financial Performance Management (FPM) and so on. It comprises Strategy Management, Profitability and Cost Management, Business Planning, Financial Consolidation, Spend, Supply Chain and other operational performance areas. EPM aligns the processes, systems, and metrics needed to measure and manage the performance of an organisation.<br />
	<br />
	EPM supports both cost optimisation and growth initiatives. It is a suitable fit for nearly all organisations and should be a priority initiative for CFOs to enable finance function to deliver short and long-term strategic benefits to businesses.<br />
	<br />
	It is considered as a diagnostic tool to monitor the pulse of an organisation by using a set of processes, frameworks, and systems for activities such as planning, measuring, communicating, and monitoring business results. Enterprises typically link these activities to corporate strategies and objectives and might drive them down to many individuals within the organisation to encourage accountability and control. Forrester defines business performance solutions as a category of purpose-built software applications that support these activities. The major BPS functional elements include:<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Strategy and performance measurement address goals, objectives, and accountability<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	A strategy management application supports formal strategy management philosophies (eg, the Balanced Scorecard) but might be adapted to a business’ specific needs. Applications often display the strategy definition in visual strategy maps. Scorecards measure progress against the goals and objectives set forth in the strategy framework. Performance dashboards display more detailed information and allow drilling down to root-cause detail. Dashboards typically include a variety of key performance indicators (KPIs) that might include strategic scorecards as well as relevant comparisons against plans, budgets, forecasts, prior performance, and industry benchmark data.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Planning, budgeting, and forecasting solutions support multiple forward-looking processes</strong></div>
<div style="text-align: justify;">
	Although used almost universally as a control on spending, budgeting often falls short in supporting performance initiatives often as a result of some rigorous and inflexible process and not necessarily due to a software shortcoming <i>per se</i>. Fortunately, in addition to budgeting, the planning solutions support a variety of scenario-based planning activities as well as forecasting processes that add value beyond which is provided by <img align="left" alt="enterprices" border="1" height="259" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/epm.jpg" style="width: 477px; height: 259px;margin:10px;padding:10px;" vspace="10" width="477" />traditional budgeting processes.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Cost and profitability management provides detailed analysis to improve margins.</strong></div>
<div style="text-align: justify;">
	This complex modelling activity helps organisations analyse development, production, and operating costs against revenues by product, customers, and lines of business. Cost and profitability management applications often use activity-based costing as the methodology to develop sophisticated cost and profitability analytical models.</div>
<div style="text-align: justify;">
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Financial reporting and consolidation produce financial statements.</strong> Financial reporting and consolidation applications produce reports focused on delivering financial statements based on accounting results. Statutory consolidations support regulatory compliance and generally accepted accounting principles (GAAP) requirements. These applications also support internal reporting of financial information.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why are companies after it globally?</strong></div>
<div style="text-align: justify;">
	Despite the economic downturn and a global decline in overall IT spending of approximately 3 per cent, spending on CPM Suites remained positive (growing at 3.6 per cent in 2009). Through the last 24 months of economic uncertainty, EPM has helped to manage cost optimisation efforts, but through 2010, many more EPM initiatives were justified on the basis of supporting growth strategies. Furthermore, many of the stalled or sidelined EPM initiatives that did not advance in 2009, were reinstated during 2010.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	With economic downturn during the last few years, companies around the world are more focused on cutting costs and increasing performances. Therefore, EPM has been their major focus to achieve this objective and to have a better understanding of the drivers of corporate profitability.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	Although awareness of the EPM concept has become more widespread, according to an estimate, 40 per cent of large enterprises and as much as 75 per cent of midsize businesses are using spreadsheets or legacy applications to meet their core management processes for BP&amp;F, financial consolidations and financial reporting.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>SAP EPM Suite<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	SAP is a global leader in EPM products. SAP recognises the importance of supporting these functions for an enterprise by establishing a new cross-functional unit, focusing on business performance optimisation. This unit brings together integrated technology and product portfolio with the people, ecosystem partners, and best practices specifically designed to help organisations drive business performance, manage risks and optimise the financial value chain. SAP Business Objects and EPM&nbsp;solutions bring together a set of applications that combine strategic goal-setting linked to effective budgeting and reporting, with additional abilities to analyse profitability. Similarly, SAP Business Planning and Consolidation (SAP BPC) is another tool that is dominating the global EPM suite market.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The major strength of SAP is its dominance in ERP market and its support base around the globe. Lately, SAP has an implementation partner in Nepal as well.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM and Business Intelligence</strong></div>
<div style="text-align: justify;">
	It is sometimes confusing to distinguish between business intelligence (BI) and EPM. The major reason behind this is because different vendors define these terms in different ways. In general context, business intelligence supports EPM tools to achieve results. In terms of strategy, Business Intelligence offers the tools necessary to improve decision-making, but not linked to organisation’s strategy. On the other hand, EPM provides a closed-loop support: linked to strategy through CSFs and KPIs. In terms of purpose, the BI tool helps organisations set and monitor their goals whereas EPM tools help organisations guide their business towards its goals. The scope of BI may be limited to one or more departments or functional areas whereas the scope of EPM is for the entire enterprise.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	As shown in the figure above, EPM forms the higher level of pyramid whereas BI sustains the EPM processes as a supporting tool.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM in terms of Nepal<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	As in the case of companies around the world, most companies in Nepal still use spreadsheets or legacy system for financial planning, budgeting and consolidation. Due to this, the predictions are often time consuming, inflexible and inaccurate. Unlike few years back when there were very little EPM tool options in Nepal, now the country already has a SAP implementation partner. Therefore, companies now have opportunities to implement best EPM tools, like SAP EPM or SAP Business Planning and Consolidation. This shall greatly help business companies distinguish themselves from their competitors.<br />
	<br />
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong><i>(Neupane is a SAP global certified consultant currently working in London. He can be reached at neupane_anil@hotmail.com)</i></strong></div>
<div style="text-align: justify;">
	<strong><br />
	<br />
	</strong></div>',
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			'title' => 'Healthcare Technologies: Promoting Personal Wellbeing',
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			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Vineet Kumar Tulshyan.jpg" style="width: 218px; height: 168px;" vspace="2" />Vineet Kumar Tulshyan</b></div>
<div style="text-align: justify;">
	Director</div>
<div style="text-align: justify;">
	Healthcare Technologies Pvt Ltd</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Incorporated in 2001, Healthcare Technologies Pvt Ltd has come a long way since. With an annual turnover of Rs 80 million, it has targeted a growth of 15-20 per cent for 2011. Beginning with importing medical equipments in 2001, the company set up a Personal Healthcare Division in 2008. “Given the immense potential for its market in Nepal, we hope that the industry size grows by 1000 per cent,” says Vineet Kumar Tulshyan, the Director of the company. He adds that this tremendous growth can be realised by spreading awareness about personal healthcare. While the expected market is worth a whopping Rs 500 crores, Tulshyan says the current sales of personal healthcare products in Nepal are mere Rs 2-3 crores.<br />
	 </div>
<div style="text-align: justify;">
	Run by a group of young and experienced professionals with core interests in the healthcare sector, the company focuses its efforts in specialised areas. The primary objective of Healthcare Technologies is to deliver qualitative medical products and services to the health professionals in Nepal. It has been active in the healthcare sector in different forms and areas. The company imports and distributes medical and surgical equipments, surgical goods, personal healthcare items, laboratory products etc. Its medical equipments are received well in the private sector entities while it is the market leader in personal healthcare products. “Our Microlife range of products enjoy 50 per cent market share,” informs Tulshyan.<br />
	 </div>
<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/corporate focus1.jpg" style="width: 266px; height: 166px;" vspace="2" />Healthcare Technologies caters its products to government institutes and organisations, pharmaceuticals companies, hospitals, medical colleges, nursing homes, INGOs and NGOs among others. It has a nationwide distribution network which carries out the work in the most professional manner possible. With its distribution channel in place all over Nepal, it has registered a rapid growth in the last three years.&nbsp;The company had a group turnover (Medical Division) of approx US$ 1.7 million in the last financial year, a growth of nearly 80 per cent. Besides the Kathmandu Valley, the company distributes its products through its dealer network in Butwal, Bhairahawa, Pokhara and Birgunj in central Nepal. Similarly, it has dealers in Nepalgunj in western Nepal and Janakpur, Biratnagar and Dharan in eastern Nepal. The company also indulges in direct marketing to hospitals and nursing homes.<br />
	 </div>
<div style="text-align: justify;">
	A total of 15 people are employed with the company under the medical division. Tulshyan says, “I have inculcated a culture in my colleagues that if the company grows, it benefits the employees too.” Healthcare Technologies was recognised by the Nepal Radiological Society in 2009 for its contributions. As part of its corporate social responsibility initiative, it has donated equipments such as Blood Pressure Machines and Thermometers to NGOs and charity hospitals. The company’s mission is to promote personal healthcare system in Nepal. Tulshyan reiterated that spreading awareness is crucial. “In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions, in time,” says he.<br />
	 </div>
<div style="text-align: justify;">
	Tulshyan owes his company’s success to being honest with products and customers. Irrespective of temptations, he does not recommend sub-standard products, he explains. As part of the company’s future endeavours, he plans to manufacture surgical products and start exports in five years time if the government rules and regulations favour the business environment. He says that government support is absolutely important for the sector to flourish.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Healthcare Technologies and its sister concerns</strong></div>
<div style="text-align: justify;">
	1)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Healthcare Technologies Pvt Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>DeVilbiss Healthcare –</b> Portable Oxygen Concentrator and Respiratory Items (5 litre Compact Oxygen Concentrator, IGO Portable Oxygen Concentrator, IFill Personal Oxygen Station, CPAP &amp; Bilevel CPAP)</span></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Microlife AG (Switzerland) –</b> Hypertension and Fever Management Products (Digital Blood Pressure Machine, Aneroid Blood Pressure Machine &amp; Stethoscope, Digital Thermometer)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Bayer HealthCare – </b>Diabetic Care Division</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>AMPall (Korea) – </b>Syringe and Infusion Pumps (Syringe Pump SP-8800, Infusion Pump IP-7700)</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>Mitsubishi Electric – </b>Video Thermal Printer and Paper</span></div>
<div style="text-align: justify;">
	2)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sun Medical Concern:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Technologies (Medical Equipments)</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Diagnostics (Contrast Media)</div>
<div style="text-align: justify;">
	3) Sun Exim:Manufacturer, Importer and Exporter of Medical Recording Paper</div>
<div style="text-align: justify;">
	4)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical Associates Services Pte Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Hitachi Air Compressor</b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Thermax Ltd </b>(India)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; TAS Medical Gas System </b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Grundfos </b>(Denmark)</div>
<div style="text-align: justify;">
	5)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Care Plus:</span>Branded Personal Healthcare Product showroom in the heart of Kathmandu City</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	Strengths</div>
<div style="text-align: justify;">
	Ø Quality of Products</div>
<div style="text-align: justify;">
	Ø Immediate After Sales Service</div>
<div style="text-align: justify;">
	Ø Engineer available on Hotline</div>
<div style="text-align: justify;">
	Ø Competitive Prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Weaknesses</div>
<div style="text-align: justify;">
	Ø Belief in honesty (Tulshyan says he doesn’t bribe to get business)</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Opportunities</div>
<div style="text-align: justify;">
	Ø Spreading awareness</div>
<div style="text-align: justify;">
	Ø Small health centres outside Kathmandu Valley</div>
<div style="text-align: justify;">
	Ø Largely unexploited market</div>
<div style="text-align: justify;">
	Ø Free BP check up camps in cities and small towns</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Threats</div>
<div style="text-align: justify;">
	Ø Low quality products</div>
<div style="text-align: justify;">
	Ø Unhealthy competition</div>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2011-04-27',
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			'description' => '“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”',
			'sortorder' => '191',
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	(int) 10 => array(
		'Article' => array(
			'id' => '264',
			'article_category_id' => '39',
			'title' => 'CG Education:Taking Education Beyond Classroom',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bhushan Gurung.jpg" style="width: 197px; height: 141px;" vspace="2" />Bhushan Gurung</b></div>
<div style="text-align: justify;">
	GM</div>
<div style="text-align: justify;">
	CG Education</div>
<div style="text-align: justify;">
	“We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Encouraged by its spectacular growth in recent times, CG Education aims to have 10,000 students by 2015 under its umbrella. It encompasses schools from pre-school to mainstream schooling under both CBSE and HSEB boards. Ranging from kindergarten to post-graduate level, it plans to expand its reach and create facilities at all major cities in the country. Bhushan Gurung, the GM of CG Education asserts, “We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The organisational vision is to be an integral part of the educational revolution and deliver quality to its students. “Our contribution will not only synergise the vibrant educational sector of the nation but will also activate others to follow suit,” adds Gurung. It was part of the strategic plan of Chaudhary Group, the parent company, to balance its investment portfolio between manufacturing and service sectors. CG Education is one venture that strengthens the group’s foray in the service sector where it sees a tremendous growth potential. More importantly, the society at large – students, government and the nation – will benefit from this gigantic effort.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	CG Education’s investment in its present portfolio of schools, colleges and institutes is over Rs 100 crores. This is spread over its flagship ‘The Chandbagh School’ with likely additions in Pokhara , Butwal and the ‘DPS School’ in Birgunj. The latest entrant under its flagship is ‘The Chandbagh Pre School’, a Montessori system based school for children up to six years of age. It envisages acquiring about 25 schools and institutions and bring them under the CG Education fold. The organisation also plans to work on a public-private partnership with Nepal Government on operating many government educational institutions. It hopes that this will result in a total enhancement of quality of these institutions in terms of faculty, infrastructure and management.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Chaudhary Group believes that high quality affordable education is the key to Nepal’s development. Based on the experience gained from running The Chandbagh School successfully in Kathmandu and with a desire to replicate and move to the next level, it entered into a joint venture with Manipal K-12 Education. The venture offers management services to existing and new schools under the brand name CG-Manipal Schools. It also offers <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cg edu.jpg" style="width: 349px; height: 164px;" vspace="2" />ICT-based School learning solutions and tutorials. “The CG-Manipal Schools is a logical extension of the Manipal Group’s strength in education and CG’s new initiatives in the field of education,” says Gurung. The schools are designed to use the right combination of technology and pedagogy for an effective learning process.&nbsp;Manipal K-12 is part of Pearson Education, the largest educational resource providing organisation in the world. In recent times, CG-Manipal has acquired the highly successful Campion Institutions namely Campion School-Lagankhel, Campion Academy-Lagankhel, Campion Kathmandu Higher Secondary School-Gahanapokhari and Campion College-Kupandole.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><i>Digi</i> Classrooms</strong></div>
<div style="text-align: justify;">
	Involved in various educational activities in Nepal since 1996, CG Education has now initiated efforts to establish <i>Digi</i> Classrooms in the educational institutions of the country. It is a cognitive learning approach and is a widely accepted theory on the learning process. “CG Education is now taking an initiative to establish <i>Digi</i> Classrooms in the educational institutions of Nepal,” Gurung proudly states. CG Education wanted to introduce a new approach where students can understand better and retain new information and hence, the effort. <i>Digi</i> Class’s multimedia contents include audiovisual aids, demonstrations, simulations, rhymes, games, activity sheets, eBooks, 3D interactivity, and patterns which help teachers teach the students in a better way and make them understand better. The content support for digital classes is from Manipal K-12. The curriculum is as per the needs and requirements of boards such as CBSE and SLC/HSEB. The product is available in a hassle-free way under Single Window Service.<br />
	 </div>
<div style="text-align: justify;">
	The schools associated with CGEducation have already implemented ICT-enabled classes.<br />
	 </div>
<div style="text-align: justify;">
	<strong>CG Polytechnic</strong></div>
<div style="text-align: justify;">
	With the intention to develop skilled human resource for Nepali Industries and for better employment opportunities, CG Polytechnic aspires to be the backbone of country’s skill inventory. The Chaudhary Group of industries and Manmohan Memorial Polytechnic (MMP) have jointly launched a technical training programme at CG’s industrial village - CUG in Nawalparasi from September 2009 offering technical courses on mechanical and industrial faculties. The training includes both theory and practical classes in various technical subjects which is tailor made to meet industrial requirement.&nbsp;The main objective of the training is to bring significant improvement in human skill matrix of the organisation.<br />
	 </div>
<div style="text-align: justify;">
	&nbsp;CG Polytechnic is building its capacity to diversify into food technology, accountancy and many other sectors on the need assessment. To be more customer-oriented, it reaches different relevant stakeholders for need analysis as well as maintaining quality of education. In the very near future, CG Polytechnic will become a landmark where technical skills get honed to the highest level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Accreditation and Affiliation</strong></div>
<div style="text-align: justify;">
	CG Education wants to contribute in all streams of education with the aim to be acknowledged as an institution with complete educational solution. Apart from managing schools and colleges, CG Education is involved in the vocational sector as well. With this objective, it has joined hands with renowned educational institutions of the world. Its international affiliations and accreditations include CBSE Board, ‘A’ Level Cambridge University besides the joint venture with Manipal K-12. CG Education’s association with other educational institutions is intended to derive quality from their years of experience in mainstream education. It is also in the process of obtaining accreditation and affiliation with ISO, IB, ETS, ESOL and other renowned educational institutions and agencies.</div>
<p style="text-align: justify;">
	CG Education’s ultimate vision and mission is to impart world class holistic education and produce educated citizens equipped to meet international standards.</p>',
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			'description' => '“We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our....',
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			'breaking_news' => false,
			'main_news' => false,
			'in_scroller' => false,
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	),
	(int) 11 => array(
		'Article' => array(
			'id' => '263',
			'article_category_id' => '39',
			'title' => 'Leon Motors:Recreating Mitsubishi Magic',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Ashish Shrestha.jpg" style="width: 246px; height: 176px;" vspace="2" />Ashish Shrestha</b></div>
<div style="text-align: justify;">
	Executive Chairman</div>
<div style="text-align: justify;">
	Leon Motors Private Limited</div>
<div style="text-align: justify;">
	“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors Private Limited is the authorised sub-distributor in Nepal for Mitsubishi Motors Corporation, Japan and Mitsubishi Fuso Group, Japan. The company started importing Mitsubishi vehicles in 2008 and has sold over 150 units so far. 2010 was its most productive year in which it sold 70 units. The vehicles sold by the company fall on different price points ranging between Rs 4 million and Rs 12 million.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors is the brainchild of its dynamic Executive Chairman Ashish Shrestha. Coming from a family that has traditionally dealt in gold for generations, Shrestha holds an MBA degree from American InterContinental University in United Kingdom. After returning to Nepal in 2006, he wanted to establish a business that suited his personality and justified his management acumen. And thus, Leon Motors came into being in 2007. It is currently focused on reviving the brand image of Mitsubishi Motors. The brand lost its charm and took a beating in the Nepali market due to non-availability of new models from 1998 till 2006. Shrestha says, “A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.” He believes that 236 per cent duty on importing vehicles is astronomically high and plagues Nepali automobile market to a large extent. The company plans to revive Mitsubishi Fuso trucks and buses in 2011 to achieve its targeted growth of 10 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Shrestha rues the unhealthy competition that exists in the automobile market. According to him, a number of automobile companies in Nepal under-invoice their transactions which helps them to dodge the tax and reduce the retail price or increase their profit. He strongly believes that this unethical practice needs to be stopped as it creates unfair competition in the market. To make his point strong, Shrestha proudly shows a certification from TRACE Inc, a US based internationally recognised organisation promoting transparency and anti-bribery compliance in international business transactions.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The company practices an ‘open door policy’ where the employees have direct access to Shrestha for any matter they need to discuss, be it a suggestion or a complaint. An outsider might as well feel that it’s a family run business. That’s the level of camaraderie which exists between the employees at Leon Motors. As part of its CSR (Corporate Social Responsibility) initiative, the company supports an NGO, Society Developer Nepal with its endeavour in providing education for underprivileged children.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Auto Works is the sole authorised after-sales and service centre for Mitsubishi Motors Corporation and Mitsubishi Fuso Group. Besides this servicing arm of Leon Motors Private Limited, there are a number of group companies <i>(see box)</i>.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This group of businesses employs more than 50 people on a permanent basis and considers itself blessed to have a dedicated workforce, many of whom have been involved in their jobs for years now. Shrestha believes that the market is circled with inflated prices, for example, unreal values of real estate holdings. He adds that this coupled with political instability are the major reasons behind people refraining from making investments in the country. On an optimistic note, however, the group plans to enter hospitality business by establishing boutique hotels. It is currently scouting for properties in Kathmandu and Pokhara and seeks to contribute towards Nepal’s tourism prospects. On a personal note, Shrestha has the burning desire in him to bring more hydropower projects to Nepal. He hopes to succeed in convincing investors to do so as it promises to put the country back on track to attain sustainable development. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sister concerns of Leon Motors Pvt Ltd</div>
<div style="text-align: justify;">
	<b>1.&nbsp;Leon Global Private Limited (Trading) </b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; A successful trading house, it has represented an impressive list of international organisations on turnkey projects in Nepal. The company promotes development related projects in the tourism and civil aviation sector, establishment of industries, construction of hydropower projects, supply of communication equipments etc to Nepalese Army, Nepal Telecom and Civil Aviation Authority of Nepal and supply of construction equipments to the Ministry of Physical Planning &amp; Works among others.&nbsp;It is extensively involved in liaison work and promotional activities and provides complete local support during pre and post tendering periods.<br />
	 </div>
<div style="text-align: justify;">
	<b>2. Leon Hager International Private Limited (Distribution)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; It is into distribution business representing various international beverage companies around the world. It currently imports and distributes alcoholic and non alcoholic brands such as ‘Nite’, a ready-to-drink (RTD) product from Thai Spirit Industry Co Ltd, Thailand; ‘Ignite’, a vodka based RTD product from Ignite Corp Pty Ltd, Australia; ‘Jugular’ and ‘Rock’ energy drinks from Jugular Global Pacific Ltd, Australia; ‘Victoria Bitter’ – Australia’s highest selling beer – popularly known as VB from Foster’s Group and rich and robust cooking wines from Australia and France among other European countries.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<b>3. Green City Development Private Limited (Township Development)</b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; This company was established in 2007 along with the leading business houses to develop first-of-a-kind township within the Kathmandu Valley. It plans to build a township covering approximately 387 acres of land with all modern amenities one can think of. Currently, the company is busy purchasing land at the site of the planned project. While it hopes to complete its land acquisition deals by this year end, the project plan and design is being prepared by a Singapore-based firm.<br />
	 </div>
<div style="text-align: justify;">
	<b>4. Ivory International Private Limited (Construction)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Involved in construction business, it has tied up with a leading Chinese construction company, China Railway Engineering Group Co Ltd. This joint venture has been constructing various projects that include commercial buildings, hospitals, hotels, apartment buildings, super malls, roads, bridges, hydropower plants and many more.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	<b>Strengths </b></div>
<div style="text-align: justify;">
	*Strong management team</div>
<div style="text-align: justify;">
	*Prime location (Shantinagar, New Baneshwor)</div>
<div style="text-align: justify;">
	*Famous brand name</div>
<div style="text-align: justify;">
	* Innovative ideas</div>
<div style="text-align: justify;">
	<b>Weaknesses</b></div>
<div style="text-align: justify;">
	* Branding hiatus between 1998-2006</div>
<div style="text-align: justify;">
	* Lack of a state-of-the-art showroom</div>
<div style="text-align: justify;">
	<b>Opportunities</b></div>
<div style="text-align: justify;">
	* Impending expansion</div>
<div style="text-align: justify;">
	* Sports models</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; (small hatchback cars by 2011 end)</div>
<div style="text-align: justify;">
	<b>Threats</b></div>
<div style="text-align: justify;">
	*Too many players in the market</div>
<div style="text-align: justify;">
	* Unhealthy competition</div>
<div style="text-align: justify;">
	* Competitors’ prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Mitsubishi Products in Nepal</div>
<table border="1" cellpadding="1" cellspacing="1">
	<tbody>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Mitsubishi Pajero</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Pajero Sport</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Outlander</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Active Smart X-SUV (ASX)</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					L200 Sportero</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					L300</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Lancer Ex</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Rosa</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Heavy Duty Trucks &amp; Buses&nbsp;</div>
			</td>
		</tr>
	</tbody>
</table>
<p style="text-align: justify;">
	 </p>',
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			'description' => '“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”',
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	(int) 12 => array(
		'Article' => array(
			'id' => '261',
			'article_category_id' => '38',
			'title' => 'Japan’s Earthquake:A Global Wake Up Call',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<span><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Jagadish Ghosh.jpg" style="width: 106px; height: 134px;" vspace="2" />Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.</span></div>
<div style="text-align: justify;">
	<i>By Dr Jagadish Ghosh</i></div>
<div style="text-align: justify;">
	<b>&nbsp;</b></div>
<div style="text-align: justify;">
	'After three years, even a disaster can be good for something’ goes a Japanese proverb. But in the midst of this appalling devastation, it might be obscene to suggest that a disaster of this magnitude could possibly be turned into good for something. Evidently, time and again, not only the human spirit but also the laws of economics have proved amazingly resilient in the face of the most terrible of adversities. The widespread destruction has been taken as a challenge and an opportunity to rewrite the triumphant history of growth and development with renewed spirit and zeal. The destruction spurs reconstruction and acts as a stimulus for economic enterprise.<br />
	 </div>
<div style="text-align: justify;">
	A ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan’s east coast on 11 March 2011 sweeping away boats, cars, homes and people as widespread fires burned out of control. The magnitude 8.9 offshore quake places the earthquake as the fifth largest in the world since 1900. It is also the largest in Japan since modern instrumental recordings began 130 years ago. The two disasters were followed by the damage at nuclear reactors threatening harmful radiation. Japanese Prime minister Naoto Kan has described the catastrophic combination of earthquakes, tsunami and nuclear meltdown as the biggest crisis the country has had to face since the end of World War II.<br />
	 </div>
<div style="text-align: justify;">
	The quake caused a 400-km long and 160-km wide rupture in the earth’s crust as one tectonic plate dove under another off the coast of northern Japan. This led to an upheaval in the sea above it, sending a 30 foot wall of water racing up to 10 km inland in Japan and reaching California across the Pacific Ocean 10 hours later. Tsunami warnings blanketed the entire Pacific as far away as South America, Canada, Alaska and the entire US West Coast. The quake was followed by more than 20 aftershocks for hours, most of them of more than magnitude 6.0. As many as six reactors at the Daiichi nuclear power plant in Fukushima are facing crisis at one level or the other verging of N-disaster. The death toll was likely to continue climbing over 10,000 given the scale of disaster. But without minimising the tragedy in any way, the damage in terms of human lives has been remarkably contained relative to what might have been. For that, all credit must go to successive Japanese administrations and civil society. Situated on the ‘Ring of Fire’ – an arc of seismic activity around the Pacific Basin – Japan has been hit time and again by devastating earthquakes, from the one in Tokyo in 1923 to Kobe in 1995. But the Japanese have drawn their lessons from these. So they have the world’s most sophisticated earthquake early warning systems and an extensive tsunami warning sensor network. They have building codes that keep such exigencies in mind. Similarly, they have thorough disaster management plans at every administrative level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Insured Losses<br />
	</strong></div>
<div style="text-align: justify;">
	The earthquake in Japan could lead to insured losses of nearly $35 billion, according to risk modelling company AIR Worldwide, making it one of the most expensive catastrophes in history. It is nearly as much as the entire worldwide catastrophe loss to the global insurance industry in 2010 and could be the triggering event that forces higher prices in the insurance market after years of decline. This temblor will go down as the costliest earthquake in modern history in terms of insured losses, surpassing the roughly $15 billion in losses of the 1994 Northridge earthquake in California.<br />
	 </div>
<div style="text-align: justify;">
	<strong>2010 – The Year of Earthquakes</strong></div>
<div style="text-align: justify;">
	The most devastating earthquake of the year with more than 220,000 deaths struck Haiti, a country that was in no way prepared for such an event. Chile and New Zealand, on the other hand, were very well prepared. As a result, the challenges presented for reconstruction and the insurance underwriting aspects must be assessed differently for different countries.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Scientific Analysis</strong></div>
<div style="text-align: justify;">
	On 12 January 2010, Haiti suffered the most devastating seismic catastrophe since the destruction of Tangshan in China in 1976. The quake, with a magnitude of 7.0, did not come as a great surprise for seismologists. The danger had been clearly stated in a scientific publication dated 2008. The epicentre of the quake which ravaged the capital Port-au-Prince and the surrounding area was located near the boundary between the North American and Caribbean plates. The Enriquillo-Plantain-Garden Fault, which was originally considered to form the quake’s epicentre, runs in an east-west direction here. The situation was further aggravated by the fact that the rupture in the earth’s crust propagated towards the capital from its hypocentre west of Port-au-Prince.<br />
	 </div>
<div style="text-align: justify;">
	The associated interference of seismic waves magnified the vibrations. Intensive geological and geophysical investigations after the quake have revealed a highly complex rupture process. It appears that a previously concealed blind thrust fault was also involved and interacted with the Enriquillo-Plantain-Garden Fault. This is of significance for the future earth quake potential in the Port-au-Prince area. It may be assumed that the stresses accumulated in the Enriquillo-Plantain-Garden Fault since the earthquakes of 1751 and 1770 were not fully released on 12 January. Moreover, the investigations have also shown that strong shaking was not restricted only to areas with soft, unconsolidated sediments. Due to the topography, it also occurred on a hillside in the Petionville district, south of the city centre.<br />
	 </div>
<div style="page-break-after: always;">
	<span style="display: none;">&nbsp;</span></div>
<div style="text-align: justify;">
	The Chilean earthquake six weeks later did not strike unexpectedly either. The strongest earthquake ever recorded by instruments worldwide with a magnitude of 9.5 had already occurred in the Valdivia/Puerto Montt region, on the boundary between the Nazca and South American plates, in 1960. To the north of this region, a magnitude 8.0 quake off the coast of Valparaiso caused damage all the way to Santiago in 1985. The area between these two rupture zones, however, had remained relatively quiet since 1835. This ‘seismic gap’ was filled by the Maule quake on 27 February, with a magnitude of 8.8.<br />
	 </div>
<div style="text-align: justify;">
	A third earthquake, which struck Qinghai province in Central China on 13 April, paled in comparison to these two major catastrophes. Its magnitude was similar to that of the Haitian quake and claimed roughly 2,700 lives. The earthquake which struck New Zealand’s South Island on 3 September attracted greater publicity. This was not due to its magnitude of 7.0, similar to that of the quakes in China and Haiti. What made this quake different was that, unlike the Haiti and Chile cases, an earthquake had not been expected here, 40 kilometres west of Christchurch. Experts had focused more on the Alpine Fault to the northwest which marks the boundary between the Indo-Australian plate in the west and the Pacific plate in the east. The Darfield earthquake (named after the town closest to the epicentre), however, occurred along a previously unknown fault system under the sediments of the Canterbury Plains. Unlike Port-au-Prince, the rupture proceeded away from the city in this case but the energy emitted was unusually high for a quake of this magnitude.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why Haitian earthquake proved most devastating</strong></div>
<div style="text-align: justify;">
	Buildings of every kind – from representative buildings, such as the government palace and the Hotel Montana, to mud huts – were damaged more or less indiscriminately by the earthquake in Haiti. The corporate headquarters and production facilities of foreign companies remained structurally intact. Yet the few insured losses stemmed primarily from this sector. There are several reasons why the Haitian earthquake proved to be the most devastating ever in recent times, as expressed by the overall loss in relation to gross domestic product. Among others, they include the lack of building regulations, poor building material and a shortage of qualified labour as well as the absence of an institutional framework ensuring that construction projects are completed in an orderly fashion.<br />
	 </div>
<div style="text-align: justify;">
	The Maule quake in Chile was the first earthquake of high magnitude and correspondingly long duration (over 120 seconds) to test modern high-rise buildings. The high overall loss of US$30 billion was not caused by instability. Both the quality of Chile’s earthquake building code and its implementation are very good on a global scale. Only five of the 12,300 buildings erected since the last major earthquake in 1985 collapsed. Another 50 or so had to be demolished on account of massive structural damage. The magnitude of the overall loss is due above all, to the damage to non-structural elements in addition to the small number of major losses. Among other things, these include non-supporting walls, false ceilings and façade elements. Evidently, the building code must be updated in order to avoid or reduce the extent of such damage to property. In some cases, infrastructure also proved unexpectedly unstable as in the case of the motorway linking the international airport and the city of Santiago.<br />
	 </div>
<div style="text-align: justify;">
	In Chile, the load-bearing structure of mid-rise buildings (up to 20 floors) is primarily made up of shear walls parallel to the axis of the building. Compared with framed structures, such buildings are fairly rigid when exposed to seismic stresses. Newer buildings, however, tend to have thinner walls. The necessary transverse reinforcements also proved inadequate in some cases. Most of the few cases of major damage are attributable to such shortcomings. Low buildings with up to four floors are frequently built with confined masonry. In this case, the individual brick wall elements are connected by cast pillars of reinforced concrete. This type of construction has also proved to be very good.<br />
	 </div>
<div style="text-align: justify;">
	Since buildings with shear walls or confined masonry are more widespread in Chile than in other countries, the experience gathered there cannot simply be applied to other regions. Framed constructions prevail in the American Pacific Northwest Region (Oregon, Washington), for example. As for the earthquake mechanism, Chile provided a blueprint for a future quake at the Cascadia subduction zone where the Juan de Fuca plate is subducting under the North American continent from the west. Portland, Seattle and Vancouver are all about the same distance from the epicentre of a future earthquake as Santiago was from the February quake.<br />
	 </div>
<div style="text-align: justify;">
	In Christchurch, New Zealand, many residential buildings were damaged above all by collapsing chimneys. They frequently crashed through the roofs of homes, most of which were lightweight constructions. Many historical buildings of unreinforced masonry in the city centre also suffered significant damage. As in Chile, non-structural damage played a major part here, too. Unusually widespread soil liquefaction was one particular characteristic of the New Zealand quake. Near-surface sediment layers on the Canterbury Plains are particularly prone to this phenomenon, which causes extensive damage that is also difficult to repair, as the substrate settles to varying degrees during the liquefaction process, causing buildings to tilt.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Lessons for Nepal</strong></div>
<div style="text-align: justify;">
	Going by the past records, Nepal has been experiencing major quakes every 70-75 years. According to seismologists, Nepal ranks 11th among the 30 most quake prone countries in the world. In Nepal, the tectonic motion – the movement of plates in the Indian subcontinent towards Tibet – that caused the Himalayas to rise have also been causing buildings to collapse and cities get razed since the 13th century. And it is likely that Nepal would be faced with a similar situation in the near future, with Western and Central Nepal including the Kathmandu Valley the most prone to damage.<br />
	 </div>
<div style="text-align: justify;">
	The 1934 Quake, that devastated Bihar, measured 8 on the Richter scale, killing nearly 11,000 people and 20 per cent of the buildings in the valley. The National Seismological Centre of Kathmandu draws an apocalyptic version of the disaster: that it would kill more than 40,000 people and injure another 100-200,000 if it happens today. It would also destroy 60-70 per cent of the buildings and leave 60-70,000 people homeless. There is no such term as earthquake-proof as no building can be entirely safe from earthquakes. The actual term used is earthquake-resistant which means that the damage to life and property caused following an earthquake will be minimised.<br />
	 </div>
<div style="text-align: justify;">
	Establishment of the Disaster Preparedness Plan and Disaster Relief Plan makes a huge difference in earthquake-prone regions, when the catastrophes do occur as we have experienced in the two Latin American countries: Haiti and Chile. By comparing these countries to Nepal and taking a closer look at Nepal’s situation, it is evident that Nepal is in dire need of a strong mitigation plan.&nbsp;In Kathmandu Valley which is a former lake-bed, 2.5 million people live in poorly constructed buildings.&nbsp;Kathmandu has only one airport and three roads connecting it to the outside world. In the event of an earthquake, these roads are most likely to be damaged rendering them unfit for transportation. Nepal has a National Seismological Network comprising 21 short period telemetric seismic stations that started with the first seismometer set up at the top of the Phulchowki Hill, 14 km southeast of Kathmandu, in 1978. The Nepali Diaspora needs to come together and build a procedural mechanism to protect the country by setting up a Disaster Preparedness Plan, and a Disaster Relief Plan. The National Society for Earthquake Technology (NSET) - Nepal, established as a non-governmental and non-profit organisation in 1994, has been actively pursuing the earthquake risk and mitigation planning and earthquake awareness projects.<br />
	 </div>
<div style="text-align: justify;">
	Protracted political wrangling in Nepal is preventing a key piece of disaster preparedness legislation from reaching parliament. Though endorsed by the cabinet in October 2009, the National Strategy for Disaster Risk Management (NSDRM) has yet to be made into law. The passing of this bill is critical. Without this, the country’s disaster preparedness efforts cannot move forward.<br />
	 </div>
<div style="text-align: justify;">
	Development of better building codes, strict enforcement of the existing one, creation of disaster management plans and response bodies from the local level to the central must be ensured. Similarly, streamlining of relevant administrative machinery with funding, clearly demarcated jurisdiction and insurance awareness are measures that the government must take seriously. Unless these measures are taken, the cost of country’s lack of preparedness may turn out to be devastating. The right lesson to be drawn from events unfolding – a combination of righteous knowledge and righteous actions helps us for sustaining survival.</div>
<div style="text-align: justify;">
	<i>(Dr Ghosh is the CEO of National Insurance Company Ltd. This article is based on material provided from various sources including </i>Munich Re<i>)</i></div>',
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			'description' => 'Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.',
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	(int) 13 => array(
		'Article' => array(
			'id' => '260',
			'article_category_id' => '38',
			'title' => 'HR Practices & Line Managers',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	The Line Managers in organisations play an important role in the development of its employees’ professional careers and encouraging their positive attitude. The organisations have recognised the advantages of the Line Managers’ involvement in learning and development process of its employees. Yet, most organisations have not worked towards educating human resource (HR) practices to them. It is becoming increasingly important to acknowledge that the Line Managers possess the potential to help change organisational environments for the better.<strong><br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Educating HR practices to Line Managers</strong></div>
<div style="text-align: justify;">
	The Line Managers should be educated on HR policies and HR functions such as performance appraisals, training identification etc. They should have the authority to track HR activities and report the same to the Human Resource Department (HRD).&nbsp;Correspondingly, the role of the HRD should be to make the Line Managers competent by providing communication training so as to help them communicate better with their subordinates. So, close interaction between the HRD and the Line Manager and giving them the authority is vital.<br />
	 </div>
<div style="text-align: justify;">
	Further, the Line Managers should be briefed on conducting appraisals effectively. Performance appraisals must be conducted to help employees maximise their respective potential for mutual benefit.&nbsp;For this purpose, it’s imperative that the Line Managers receive behavioural and communication training.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Management Review Meetings</strong></div>
<div style="text-align: justify;">
	The organisations must give due importance to management review meetings for the Line Managers. They are an important part of educating the Line Managers as they get to hold discussions with the management boards. This process helps taking timely and appropriate actions required for organisational development.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Job Description for the Line Managers</strong></div>
<div style="text-align: justify;">
	Developing guidance is another important aspect which helps the Line Managers perform better. The HRD must make them realise the importance of the organisational team. The relations between the HRD, Line Managers and other employees must complement each other. The inclusion of HR responsibilities in the Line Managers’ job description and coordination with the HRD for the employees’ performance enhancement would help formulate effective HR related activities. A complaint mechanism also needs to be developed as it can work as the reflection for change requirement.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Counselling and Training</strong></div>
<div style="text-align: justify;">
	The Line Managers have to work closely with the employee so they must understand their human needs. For instance, an employee may be experiencing grief, tension or a personal problem. It may influence his end performance and weaken his retention prospect. In this scenario, the Line Manager’s counselling can influence the employee positively. A Line Manager’s positivity can rub on to the team and enhance its overall capability.<br />
	 </div>
<div style="text-align: justify;">
	The ability to inspire is not the easiest of qualities to develop. The Line Managers must be provided trainings, periodically, on people management and enhancing competencies of their team members. Such trainings can help them learn to be more competent to achieve common objectives.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Line Managers’ Leadership Role</strong></div>
<div style="text-align: justify;">
	Leadership plays an important role for a team to accomplish a common task. The Line Managers should lead the group of people and work towards enhancing their capabilities without getting insecure. The HR personnel cannot reach each employee most of the times. So, the Line Managers should be given adequate authority to make decisions, to a certain extent. When the Line Managers are given authority and responsibility, there is a tremendous possibility of increased productive output.<br />
	 </div>
<div style="text-align: justify;">
	The HRD should have a system which identifies the employees’ expectations from the organisations. It can then design the desired format and address it to the Line Manager.&nbsp;As a result, the Line Manager takes pride in the positive changes happening to his team members. The Line Managers play a vital role in ensuring that employees are mentored, motivated and feeling competent. The HRD can consider itself successful if employees are productive and contribute towards overall organisational growth. The employees’ successful careers within the organisation are a healthy sign of things to come. <br />
	 </div>
<div style="text-align: justify;">
	<i>(The write-up is based on an ‘HR Kurakani’ discussion on “Educating HR to the Line Managers”, on 29 December, 2010 conducted by Real Solutions Pvt Ltd. The participants at the discussion included Ayush Shah, ICTC Group; Robin Shrestha, Caritas Nepal; Sarika Amatya, Freelancer; Sharda Rana, Sipradi Trading Pvt Ltd; Shraddha Joshi, Standard Chartered Bank Nepal and Sujata Rijal, Echo Advertising Agency. Shailendra Raj Giri, the Managing Director of Real Solutions acted as the moderator for the discussion.)</i></div>',
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			'id' => '259',
			'article_category_id' => '31',
			'title' => '‘Fiat Punto And Linea Are Two Great Cars To Start Business With, In Nepal’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/rajeev.jpg" style="width: 181px; height: 265px;" vspace="2" />Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview with <i>New Business Age</i>, Kapoor talked about Fiat’s market prospects in Nepal.&nbsp;Excerpts:</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>You are launching two models of Fiat cars here. What made you choose these two specific models?</strong></div>
<div style="text-align: justify;">
	These are excellent models and unique in terms of styling, safety and low pollution. We feel that Punto gives the right size and drivability options to small families. On the other hand, Linea is a sedan that is luxurious and has a huge boot space for carrying a lot of bags. It is a very stable car and practically won every award in India. Therefore, they are two very good vehicles to start business with, in Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is your observation of the market here? Is there any target sales of these two models?</strong></div>
<div style="text-align: justify;">
	I think we should be able to get around five percent of the market share with these two cars. Then depending on how the models perform here, we can plan an official strategy on introducing other models. We hope that the affordability for buying cars in this country grows. Because it will help us sell more units and give shape to a long-term plan here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are Fiat’s passenger cars doing in the Indian market?</strong></div>
<div style="text-align: justify;">
	Fiat is doing very well in India. We sold about 23,000 units last year. The Indian market is growing at around 13 to 14 per cent every year. We also want to grow correspondingly with the Indian market this year. We are already working on a small car to be launched in 2012 end or 2013 beginning. So a lot is happening in India. The market there is becoming very competitive. However, introducing Fiat models in Nepal is a different ballgame altogether because we are not restricted to bring models only from India.&nbsp;Depending on the need, we can introduce models directly from Fiat in Italy as well if the price is right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the competition with other brands in the Nepali market?</strong></div>
<div style="text-align: justify;">
	Hyundai is dominantly the market leader in Nepal followed by Toyota and Maruti. There are a host of other brands too. Tata Motors, one of our joint venture partners in India, is also a major player here. The competition is definitely going to be there. And it’s always good to have competition as it makes us agile and focused on keeping the quality and the price parity right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the challenges you foresee for the market here?</strong></div>
<div style="text-align: justify;">
	The most glaring challenge for us is that we are a late entrant.&nbsp;Others have been selling their cars for many years now and are established players. Therefore, we need to carve a niche here. This is why we have introduced these two cars that are absolutely different in touch, feel, look and safety. We need to immediately move forward. That is why instead of only launching the car, we have first worked on strengthening the after sales aspect of it.&nbsp;We have already set up a spare parts and service centre with all the tools required. It is our effort to make sure that customers get immediate after sales service. It’s important because for us, the customers come first. So, we are launching the car after setting everything else in place. The customers can buy our cars without worrying too much about after sales service and availability of spare parts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is the market response for Fiat cars in the South Asian market compared to American and European markets?</strong></div>
<div style="text-align: justify;">
	Fiat has many established brands such as Alfa Romeo, Lancia, Maserati and Ferrari. Fiat is very strong in European markets, Brazil and even Turkey. Fiat is now venturing into China and Russia. Indian operation is already running steadily. It is also entering the US market now. A lot is happening in the automotive world. Due to the slowdown in the European, American and Japanese markets, the focus now is on countries like Brazil, Russia, India and China. So, Fiat is also eyeing these ‘action markets’.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you have any specific plans for the Nepali market?</strong></div>
<div style="text-align: justify;">
	We are reasonably focused on the Nepali market. We will be engaging ourselves in supporting our dealer here, Batas Brothers Motors, in all possible ways. We will make sure that besides the availability of spare parts and after sales service, we will make the latest models available here. We will make sure that when we plan a product, we will accordingly plan a strategy for Nepal too. I see a great future for Fiat in Nepal. This country is going to grow. As the infrastructure grows, there will be a requirement for more cars. And we want to be here and be a part of it. I can assure you that Nepal will always get the top line products here. </div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview......',
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			'id' => '274',
			'article_category_id' => '34',
			'title' => 'Financial Sector Reform Very Slow',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" height="123" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/fncci1.jpg" vspace="2" width="300" />Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID. Among the main objectives of the programme were to improve the financial standings of the two major state owned banks, Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL). The programme also looked at enhancing the institutional and supervisory capacities of the central bank.<br />
	<br />
	<div>
		Both the banks had foreigners as Chief Executives as well as part of the management teams while NRB too had foreign consultants in various positions. Speaking at a discussion programme organised by Nepal Economic Association to discuss ‘Financial Sector Reform Programme: Lessons Learnt and The Way Forward’ Dr Khatiwada observed, “Reform does not mean employing consultants, it is rather an exercise in building institutional capacities.”<br />
		 </div>
	<div>
		&nbsp;The Chief Executive Officer of Lumbini Bank, Shovan Dev Pant made a paper presentation highlighting the private sector perspective. Pant appreciated the private sector’s contribution towards the development of Nepal’s financial sector. Speaking on the occasion, Finance Secretary Rameshwor Khanal refused to accept that the financial sector reform has derailed. “However, it is progressing at a very slow pace,” he said. Citing the example of several major banks collapsing at the start of the global recession, Khanal remarked that banking has an intense domino effect when compared to other sectors.<br />
		 </div>
	Among the other speakers at the programme, former NRB Governor Bijaya Nath Bhattarai opined that the loan defaulters are the major reason for impeding reforms. Dipendra Bahadur Kshetri, also a former NRB Governor, argued that home-grown experts are competent enough to manage Nepali banks and suggested that the reform programme must be carried forward under their leadership.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID.',
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			'id' => '273',
			'article_category_id' => '34',
			'title' => 'Multinationals Rule The Roost AtFNCCI Excellence Awards 2010',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/biz news.jpg" style="width: 458px; height: 173px;" vspace="2" />Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Similarly, Unilever Nepal won the Service Excellence Award while Surya Nepal received the People’s Excellence Award. Prime Minister Jhala Nath Khanal gave away the awards to the winners amidst a special function organised by FNCCI recently.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI).',
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			'id' => '272',
			'article_category_id' => '40',
			'title' => 'FISCAL FACE OF NEPAL'S FEDERALISM',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<i><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/achyut  wagle.jpg" style="width: 114px; height: 147px;" vspace="2" />By Achyut Wagle</i></p>
<div style="text-align: justify;">
	Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda. The preamble of the Interim Constitution of Nepal 2007 has baptized the country as the Federal Democratic Republic Nepal. The Article 138 of the same Constitution has provided basis for restructuring the state.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Both, the constitutional and circumstantial yokes now guide Nepal, for better or worse, to perhaps irreversible journey to federalism. But, matter of factly, that is all in theory. Practically, there is a wide political space to be covered between the present unitary state to a judiciously delineated, stable yet functionally acceptable-to-all federal structure of future Nepal. Yet again, the federal Nepal is impossible to imagine without bringing the fiscal frame of federalism into forefront of the state restructuring discourse, which now seems to have obliqued by hyperboles on either side of the political debate.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Despite an euphoria of a sort to resolutely adopt a federal system, the objectives envisaged by the Interim Constitution in this particular regard appear rather slanted. The very concept incorporated in the Article 138 does not accept federalism by-and-large as an economic phenomenon. It proposed to ‘end the disparities’ of various forms, but hardly prescribes modality for prosperity and optimal use and scientific redistribution of resources. The worst proposition in the constitution is: it has authorised the government, not the Constituent Assembly (CA) to constitute the State Restructuring Commission, which is supposed to give impartial technical inputs.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	It is apparent that the federal structure of the nation cannot be finalised without technical report from the Commission, and thus, organising constitution writing process would not <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img.jpg" style="width: 367px; height: 182px;" vspace="2" />complete without the Commission and its inputs. Apart from this, the constitutional provision regarding the Commission gives more ominous than the virtuous signal. The authority given to the government to form this Commission provides an edge to the party in power to make it comfortable to itself and therefore, chances of its report being politically biased remain higher. Why was not the responsibility of constituting such a commission vested to the all powerful CA is a question unanswered so far.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Nevertheless, Nepal has no alternative to writing a new constitution, sooner or later. That new constitutional framework must embrace the federal set of polity and structures. Of all the structures, fiscal federalism will be both – defining and delineating basis of the sub-national administrative units, and also the means to ensuring justifiable (re)distribution of resources, prosperity and welfare. For all these reasons, the fiscal federalism is and should be at the centre, in all discourses related to the federal restructuring of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Essence of Federalism</strong></div>
<div style="text-align: justify;">
	Federalism is unique and in a way paradoxical concept. First, it seeks to consolidate the national unity while creating newer and larger number of sub-national units; ostensibly by divisions. Second, its objective is to recognise the social, linguistic and/or cultural identity without diluting the overall national identity. And, the third, it strives to bring the government nearer to the people that has a better sense of autonomy in deciding their own fate, but without severing its ties and dependence to the farther government – the one at the centre.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For many, federalism is merely an administrative re-mapping of the political geography of the nation. Creation of sub-national structures, that may be called state, province, prefecture or anything of the kind, seems to the prime objective of Nepal’s ongoing debate on federalism. But, how these new structures evolve and exercise the state power – mainly to meet the economic needs of the citizenry – would determine whether any nation is essentially federal or not. Nepal cannot be exception to this fundamental theoretical premise.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The functions, duties and rights of the federal unit are defined by the extent of power a unit can exercise. Its authority depends on the adoption of universally accepted models to extract power from among the – delegation, decentralisation or devolution, or combination of all of these. And, at the heart of all of these lies – the democracy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	There are very large nation-states world over with varying number of sub-regional administrative units. But, in absence of democratic dispensation, right from the grassroots, these units can only exercise very limited state authority delegated or marginally decentralised by the centre. Only power devolved by democratic exercise can only create a federal state, true to its sense.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Fiscal Federalism at the Centre</strong></div>
<div style="text-align: justify;">
	The concept of fiscal federalism, and for all practical purposes, the entire frame of federalism, is generally summed-up in three major</div>
<div style="text-align: justify;">
	<br />
	components – namely the tax-point transfers, equalisation grants and convincingly justifiable distribution of resources mainly the natural resources among the sub-national units. There are other peripheral, operational or fringe issues too. But in effect, the main three would largely incorporate them all. There are also several models of both ‘fiscal’ and ‘general’ federalism. But, they too do not necessarily go beyond these three fundamentals of federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Also, there are views against the perspective of limiting the ‘entire federalism’ to the ‘fiscal alone’ proposition. It is <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover img1.jpg" style="width: 406px; height: 461px;" vspace="2" />more apparent in Nepal’s discourse on federalism. Even the top-hats of major political parties who would be deciding the ultimate frame of Federal Nepal also tend to believe that without specific mention of issues like political inclusion, rights-based access to state and recognition of racial and ethical identities, the very purpose of federalism, at least for them, could be defeated. The level of understanding of our CA members on such technical and essentially academic issues is better not to raise here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In fact, unlike the popular beliefs, the issues of inclusion and identity are rather purely economic issues. For example, the inclusion is not sought in any abstract issues, it is rather meant to ensure inclusion in employment, benefits and other economic opportunities. Even the preservation of identity either is an economic activity in itself, or it has a cost to develop and preserve the different facets that give an identity to people and communities – like language, scriptures, rituals, customs, traditions and culture.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	These realities make it imperative that Nepal’s discourse on federalism needs an immediate and meaningful re-orientation, so as keeping the fiscal federalism at the centre of all exercises aimed at state restructuring. And, highly extensive technical and factual details and their analyses would require deciding on the size and the borders of new sub-national states. Nepal does not seem to have even initiated the process of those financial and other statistical number crunching, so far. Therefore, the claims that constitution could be written within a month ‘if’ the parties agrees are unrealistic platitudes. Expert believe that it would take at least six months of rigorous effort for a highly competent professional team to finalise the issues related to fiscal federalism – i.e. tax, distribution of natural resources and, of course, demography and geography.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In the hindsight, this is also an indication that it is impossible to complete the constitution writing by the stipulated deadline of 27 March 2011. Also, political campaigning to create new states on the basis of caste, community or even some extreme demands like ‘One Terai, One Province’ do not present potentiality for financially viable provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Technical Considerations</strong></div>
<div style="text-align: justify;">
	Financially justifiable and economically functional sub-national delineation is going to be perhaps the most challenging aspect to give Nepal a federal shape. All three major aspects – tax point transfers, equalisation grant and distribution of natural resources among the provinces – involve larger number of murkier issues than the easier ones.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Apart from these, several other components of fiscal relations between the central and sub-national governments, financial management and its processes within the state must also be decided to effectively devolve power to the people at the grassroots. Such issues may relate, but not limited to planning, economic diplomacy, money market and specialised institutions for both fiscal and financial architecture. Given Nepal’s poor governance and slanted nature of understanding about fiscal federalism even at the top-rung of political leadership, the country seems to be making ommitive than spontaneous jump to fiscal federal structure. These are some of the reasons why these issues deserve more <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img2.jpg" style="width: 342px; height: 158px;" vspace="2" />meaningful discussion, before the country could decide on the actual frame of federalism, essentially the fiscal federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Tax Point Transfers</strong></div>
<div style="text-align: justify;">
	One of the key components of federalism is the decision on the jurisdiction of major tax collection points, i.e. which sub-national government will administer or operate a particular tax point, the types of taxes a province would collect and how the collected revenue would be distributed between the centre and the state, and, sometimes among the states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In case of Nepal, the decision on the jurisdiction of tax points could face double pronged problem. First, only six customs points collect over 90 per cent of the customs revenue <i>(Table 1)</i>. And, the amount of collection at only the points that lie in two zones – Bagmati and Narayani of the Central Region, account for well above sixty per cent. The customs revenue generally accounts for 25.3 per cent of the total revenue.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Similarly, the revenue contribution of four districts is above 80 per cent and this reaches to 94 per cent if added another four districts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This situation does not only present high tax concentration in the Kathmandu Valley and the central region but also poses a serious challenge to divide the provinces so as each of them can have reasonably attractive tax collection points within their territory. It also indicates to the reality that despite adoption of federal structure, the financial dependence of the provinces could yet remain with Kathmandu. And, even worse, this economic factor cannot be drastically altered soon by a mere political decision.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In addition to deciding on the tax point jurisdiction, decision on the kind of taxes that provinces can impose and the taxes that would directly go to central accounts is also going to be a difficult one. Generally, property and service taxes are levied by the local bodies, sales and value added taxes go to the provincial government and customs and income taxes go to the central government accounts. This assumption appears suitable in the case of Nepal too, as our vertical administration is accordingly stratified in three tiers.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Equalisation Grants</strong></div>
<div style="text-align: justify;">
	Despite tall asks of autonomous and semi-autonomous provinces on different bases, the fiscal and financial fundamentals do not support the possibility of creating such states. The basis of autonomy is the abundance of physical and financial resources available within any given political unit. As evident in the tax collection patterns, the revenue resource does not support such an ‘autonomous state’ except the one created at the centre, incorporating Kathmandu.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Until the state-to-be-created in the federal set-up are capable of mobilising their own resources, the equalisation grant, the money given by the centre, will be the most dependable source to finance the development and public delivery of goods in the provinces. Even on this count, our debate on federalism seems unduly titled to political considerations alone. In the most ideal cases of revenue and grant sources of funds, dependence to centre remains pretty high. For example, the provinces of Switzerland are entitled to keep 50 per cent of the revenue collected and Canadian ones can hold up 47 per cent of it. These are the highest rates of centre-province revenue sharing the world over. In this light, the ‘autonomous’ state advocated in Nepal appears pure farce.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	But, in our case, the ‘sustainability’ or ‘survival’ side of the new states has never been debated thoroughly as the issue deserved. There are also demands of creating separate provinces like ‘Karnali’. One could easily imagine the level of would-be financial dependence of such states to the centre. Such scenario implicitly infer that centre must once again remain strong as it will have to continuously dole out money to so called autonomous provinces, and, it in turn, has to be strong in effect to gather enough amount of resources to be able to meet the needs of all these new ‘baby’ states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Natural Resources</strong></div>
<div style="text-align: justify;">
	The distribution of natural resources among the new provinces is another difficult and unavoidable task on effecting federalism. There are several examples of serious disputes between the provinces regarding the rights to use such resources. The Kaveri and Narmada river disputes in India are classic examples to it.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In Nepal, water, forest, mines and minerals and land (mainly cultivable) are considered major natural resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For us, one advantage of this resource vis-a-vis federal imperatives is that, it is fairly evenly distributed given that we agree to justifiably allocate them to generally acceptable size and number of states; say five to nine.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Recently, some campaigns misinterpreting the international instruments like ILO Article 169 have compounded the problem. But, lately the people involved in the indigenous rights movements themselves are becoming somehow disillusioned to deliberate misleading campaigns of yesteryears. However, natural resources will still remain a major basis of re-delineation and the process will surely be difficult.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Other Issues</strong></div>
<div style="text-align: justify;">
	There are several other issues which have to come to the forefront in the discourse on federalism. They include, whether a province should have authority to carry its own economic diplomacy to accept or endow financial assistance from and to international community; whether it can have its own finance bill; or would it have own supervisory and regulatory authorities independent of central oversight or would they just function as extended line agencies, etc. Equally complex is the issue of large infrastructure projects, their management, ownership and return – if any.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Unfortunately, Nepal as the country as a whole, and CA in particular as the only responsible constitutional organ to debate all these provisions to include in the new constitution, have remained far short of initiating meaningful deliberations. Whatsoever, Nepal in executing the federal structure must ensure unfringeable private property rights universally in all the states, freedom to movement of products and services as well as people, unhindered trade and business transactions between the states and uniform (underently different) tax structure, among others. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Article 138 of the Interim Constitution</div>
<div style="text-align: justify;">
	138. <b>Progressive restructuring of the State: </b></div>
<div style="text-align: justify;">
	(1) <span>&nbsp;&nbsp; There shall be made progressive restructuring of the State with inclusive, democratic federal system of governance, by doing away with the centralized and unitary structure of the State so as to end discriminations based on class, caste, language, gender, culture, religion and region.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(1a)&nbsp;Recognizing the desire of the indigenous peoples and of the people of backward and other area including Madhesi people towards autonomous provinces Nepal shall be a federal democratic republican state. Provinces shall be autonomous and vested with full authority. The boundaries, number, names and structures, as well as full details of the lists, of autonomous provinces and the center and allocation of means, resources and powers shall be determined by the Constituent Assembly, while maintaining the sovereignty, unity and integrity of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(2) &nbsp;There shall be constituted a high level commission to make suggestions on the restructuring of the State as referred to in Clauses (1) and (1a)&nbsp;The composition, function, duty, power and condition of service of such commission shall be as determined by the Government of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(3) <span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The final settlement on the matters relating to the restructuring of the State and the form of federal system of governance shall be as determined by the Constituent Assembly.</span></div>',
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			'description' => 'Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda.',
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			'id' => '271',
			'article_category_id' => '40',
			'title' => 'Bases For Fiscal Federalism',
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			'content' => '<div style="text-align: justify;">
	The following article represents Dr Devendra Raj Panday’s research-based paper presented at a symposium titled “Fiscal Federalism in Nepal” in August 2009 in Kathmandu. The extract is printed here with his consent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The studies on fiscal and financial federalism concentrate on how financial and monetary institutions’ functions might be arranged and a mechanism for coherent policy making and monitoring established for the state to produce expected outputs. It involves the assigning of spending, taxing and borrowing powers between the centre and the other tiers of government and the focus of responsibility and accountability in fiscal management. In many ways, it is an act of political decision and bargaining – in the course of finalising the constitution and making yearly decisions especially on taxation, revenue sharing and allocation of grants by the centre for various purposes. In all this, efficiency and equity, often in conflict with each other, become issues of major concern. In order to do the needful, the national economy has to run efficiently, produce growth and provide stability that is necessary for broader development. At the same time, the aggregate growth must not create or sustain imbalances, vertically and horizontally. It means that further continuation of centre within the periphery syndromes in governance is not acceptable from both economic and political standpoints. The discrepancies in economic and social status of various regional or provincial economies must be narrowed down with the ‘marginal benefits’ of growth going disproportionately to the disadvantaged and economically and socially excluded people across the country. There are several ways in which fiscal efficiency balanced well with equity considerations can be pursued.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	First, allowing ‘independent fiscal regime’ for the provinces should not dilute the common market character of the federation. Simultaneously, it should also be kept in mind that the free flow of goods and services and investment across the provinces can result in favour of better-equipped regions that may already be relatively better off than others. In theory, there should be economic convergence of different regions under free trade with the mobility of factors as well as goods and services. But we know from Nepal’s experience as a player in the international economy as to how difficult it is for a least developed country (or a region within a country) to compete with better endowed, resourceful and experienced economies. Less developed provinces in the federation deserve the same treatment politically, economically and morally as historically, Nepal as a least developed nation has demanded internationally, including in SAARC mechanisms.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Second, there has to be an understanding and a political consensus on the degree of competition and the spirit of cooperation to be pursued among the constituent units of the federation. The neo-liberal economic approaches sometimes display contradictory positions in this respect. On the one hand, there is the market preservation argument which expects the federation to work in harmony and have the states produce and trade goods without any barriers that would endanger the national market’s efficient working. On the other, there is a view that there should be constitutional guarantees against regulating inter-state flow of goods and services, to perhaps avoid the kind of situation in India where there is no harmony in some taxes levied in the states and on their policies concerning inter-state movement of goods and services. Meanwhile, the liberal ideology also illustrates the idea of ‘competitive governments’ and argues that the states must compete with one another in providing incentives to attract mobile capital and other factors into their territory to punish the laggards. The preference for competitive federalism where the states may compete among themselves to maximise their own welfare at the cost of other provinces may reflect the ‘beggar thy neighbour’ strategy of yesteryears. This is a critical point since, like in the overall design of economic liberalisation, only the relatively prosperous states would benefit from competitive economic and fiscal policies. In post-1990 India where the states are encouraged to compete with each other for attracting investments into their territory, some states have done well, but at the cost of growing inter-state disparities and regional imbalances. Nepal can ill afford a similar practice. It would also run counter to the social objective of federalism which is to reduce disparities and imbalances, not to increase them. Once again, purposeful pragmatism calls for an approach that would optimise people’s welfare at the provincial and local levels and encourage entrepreneurship and investment all around without the states jeopardising each other’s interests and the overall interest of the national economy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Third, in the practical task of expenditure and revenue assignment, efficiency consideration is implicit in the widely held opinion that before considering taxation, assignment of expenditures among different tiers of government should be taken care of. The idea in this ‘money to follow work’ principle is that taxation and borrowing powers of the states and assumedly, the centre’s should not be independent of specific obligations they undertake for discharging public functions and the volume of expenditures required for that purpose. The idea is to ensure that all states are empowered to provide comparable public services regardless of their revenue capacities. Beyond this, the expenditure assignment is expected to be guided by economic considerations whereby the central as well as provincial and local governments provide services whose benefits accrue to the residents within its jurisdiction and where the costs of the provisions incurred can be internalised within that jurisdiction. To put it simply, the responsibility for the provision – where the benefits from a given service are distributed nation-wide such as the country’s defence, the Supreme Court or the national highway system – lies with the centre. If the benefit incidence of a given service is limited to primary and secondary education or water supply and sanitation, the provision is best readied by provincial and local governments. The opportunity to save on transaction costs and the possibility of harnessing the economy of scale in fiscal operations are associated elements of the process.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fourth, in a developing country where both the expectations and the requirements of the people are high, assigning expenditures for the centre and the constituent states does not only mean slicing the existing budget into central and provincial items of expenditure and dividing tax revenue accordingly. It also means taking into account the responsibilities to deliver services that the people could not have earlier. It also means undertaking various development works for generating social goods that can be provided or ensured to finance them. The challenge will arise from policy matters and in the pursuit of related priorities. For agriculture, education and health among others, the centre may wish to promote certain norms and targets considered desirable from the national viewpoint. The states in charge of these assignments can have different ideas especially if the same political party or the coalition of parties is not in charge at the centre and specific states. The centre will have other concerns including those that are part of its international commitments. Such commitments can be about trade and environment as they can be about national and international human rights standards concerning the status of women, children, indigenous people etc. And there are commitments about Millennium Development Goals (MDGs) with further complications arising from the possibility that many of the related functions will come under the purview of provincial governments. Consequently, expenditure assignment also becomes responsibility and accountability assignment against which the availability of matching revenue needs to be guaranteed. The centre has an obligation to address these issues as it negotiates the tax sharing arrangements and, particularly, the conditional and unconditional grants’ transfers from the centre to the provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fifth, there are four areas of concern that should guide the process on taxation. One, every jurisdiction needs adequate tax revenue to finance the assigned and necessary expenditures. To make up for the shortfall in one jurisdiction, the better endowed among others should have the incentive to engage in revenue sharing. Two, efficiency consideration will be as important in the assignment of taxing power as in spending, more so due to its direct impact on the working of the common market. The incentives and disincentives in the tax structure on a given jurisdiction, especially for the mobile factors and the consumers of public services are critical. Taxation assignment requires appropriate study of tax bases, possible overlapping of incidence, the spill-over effects and the population that stands to benefit from the spending facilitated by such taxes. Three, the distribution of taxing authority among the different tiers of government has a significant bearing on equity. The residence based taxes on income and property may be appropriate for the provincial and local governments, but any tax with significant redistributive power, such as progressive income tax becomes suitable only for the national government to enforce national priorities on equity and broader development. Four, administrative efficiency including transaction cost considerations will also guide the assignment of taxing power. On this basis, some taxes become suitable even for sub-provincial or local governments for eventual sharing vertically where local conditions and administrative set up can help administer it better.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sixth, apart from the question of specific taxes to be assigned to the centre and the provinces, a decision about the collecting agency is also important. Some taxes available for meeting public expenditures may be collected and used by only one jurisdiction. One such example could be the property tax levied and collected by local governments. Such tax base can also be shared between the local and provincial governments. Some taxes may be collected in one jurisdiction and used by all. For example, income tax can be collected by the centre and shared with others. In all these cases, the tax base, its incidence and the administrative cost of collection will be important considerations. From a political perspective, the perceived or pursued autonomy of the provinces vis-a-vis the centre will play its part. There is a potential conflict in the way one asserts ‘states power’ and the compromises needed in the interest of efficiency as well as equity in the interest of national bonding.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Seventh, as in Nepal’s case of federalism by ‘devolution’ and not ‘aggregation’, the central government retains its basic strength and power which applies to fiscal arrangements too. The centre must have absolute power to collect taxes from the domains of individual provinces and use the funds collected to meet expenditures it deems important across the country. In almost all the important federal countries, the share of the central government in total public revenue (collected by the centre, the provinces and the local governments) is above 50 per cent. In Nepal, the economic reality – the likely wide variations in the economic status and revenue bases of different regions and the social imperative of redistribution – will undoubtedly vest the centre with considerable authority and responsibility in this respect.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Finally, besides redistribution, it is critical that the central government be adequately empowered to undertake stabilisation functions, on the one hand, and monitor the economic and distribution effects of inter-jurisdiction competition, on the other. It is prudent and practical to let the centre have exclusive authority over stabilisation function and use its power of the purse in a way where the provincial governments have an incentive to follow the national priorities even as they are bound to come into conflict with priorities established by them in their provincial interests.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<i>(Dr Panday retired from government service as Secretary of Finance and became the Finance Minister in the first government formed after the restoration of democracy in 1991.)</i></div>',
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			'article_category_id' => '40',
			'title' => '‘We Need A Strong Central Government With Fiscal Redistribution Power’',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Ram Sharan Mahat.jpg" style="width: 192px; height: 217px;" vspace="2" />Dr Ram Sharan Mahat</b></div>
<div style="text-align: justify;">
	Former Finance Minister</div>
<div style="text-align: justify;">
	The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How would mobilisation of resources take place under the federal structure?</strong></div>
<div style="text-align: justify;">
	Mobilisation of resources is imperative to run the government irrespective of whether there is a federal structure or not. Under the federal structure, there will be governments both at the central and provincial levels. Therefore, resources will be mobilised at both ends. Apart from the revenue sources under their respective jurisdictions listed in the constitution, there will be a concurrent list of revenue sources imposed at both levels. In federal countries, the centre as well as the provinces impose taxes and duties such as income tax and excise duty which raises the burden on the taxpayers. Duties are normally collected by the centre at a single point for administrative convenience but shared at both levels. In addition to the central tax, the provinces piggyback to a certain extent, however, remaining within limits defined by the respective framework legislation. For example, if the central income tax is 25 per cent, the province may add another 5 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The source of revenue in Nepal at present are centralised in a few districts. Under such situation, how can fiscal balance be maintained when Nepal becomes federal?</strong></div>
<div style="text-align: justify;">
	This is definitely a big challenge. The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run. People think that once they have a separate province, they will have all the autonomy and freedom. But if the province has no resource of its own and depends on the central allocation even for day-to-day administration, the autonomy has no meaning. Therefore, one has to be very careful while carving out the provinces. The decision should also be based on long term viability and economic sustainability of the regions, in addition to other considerations. Unfortunately, at present the most vocal demand relates to provinces based on ethnicities.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of regional disparity due to unequal distribution of resources and sources of revenue?</strong></div>
<div style="text-align: justify;">
	The common fallacy among the ardent federalists in Nepal is that regional disparity will be narrowed and poverty banished once there is a federal structure. This is wrong. Resources and development potential are unequally distributed and so are the revenue sources. Competition among provinces with differing resource endowments could accentuate regional disparities instead of narrowing down unless there is intervention from the centre. For this, the centre must be strong with redistributive power. In the USA, there are serious regional disparities. West Virginia’s per capita income is less than half of Connecticut’s. In India, Haryana’s per capita income compared to UP and Bihar is three to five times higher. Please note that India is not the perfect example of a federal structure. India, at best, can be regarded as a quasi federation with a strong centre. So, this situation in India is despite central intervention.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should federal Nepal’s fiscal policy focus on to ensure appropriate and equal distribution of resources among the provinces?</strong></div>
<div style="text-align: justify;">
	There is no alternative to a strong central government with fiscal redistribution power to ensure equity and economic justice. All provinces should have uniform access to basic services like education, health, electricity, roads and other socio-economic services. For this to happen, poorer provinces will need central support through a mechanism called Equalization Fund. A fiscal mechanism to ensure transfer of resources from rich to poor provinces is necessary. It is precisely for this and other reasons that revenue from major sources like customs, income tax, and partially VAT and excise must go to the centre. If you look at Nepal’s case at present, these sources practically yield no revenue. If they are brought under provincial jurisdiction, most federal units will have no income at all.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t there been a meaningful debate on state restructuring and the form of federal system?</strong></div>
<p style="text-align: justify;">
	It is not that there are no debates taking place. But generally speaking, the focus has largely been on ethnic lines rather than on long term sustainability and from development perspective. Most people have a vague idea about federalism and what it will deliver. State restructuring is not just about the country’s division into federal units. It is more than that – such as ensuring people’s empowerment at the basic level. Democracy is after all the empowerment of individuals, beyond communities and societies. It could be ensured with strong decentralisation but there has hardly been any debate on that.</p>',
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			'description' => 'he provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces.',
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		'Article' => array(
			'id' => '269',
			'article_category_id' => '40',
			'title' => '‘We Must Have Small Number Of States For Financial Feasibility’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bijaya Nath Bhattarai.jpg" style="width: 153px; height: 173px;" vspace="2" />Bijaya Nath Bhattarai</b></div>
<div style="text-align: justify;">
	Former Governor, Nepal Rastra Bank</div>
<div style="text-align: justify;">
	The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the monetary aspect of federal Nepal?</strong></div>
<div style="text-align: justify;">
	Nepal Rastra Bank (NRB) is the authority for all monetary issues in Nepal. NRB has its branches and sub branches spread all over the country. It not only works as a fiscal agent but also facilitates commercial banks through operating currency chests. It regulates the money supply, flow of liquidity and supervises and regulates banks and financial institutions. In the federal structure too, the currency in use will be the same and there will be a solitary central bank which will be responsible for providing all central banking functions to every state in the country. There won’t be separate currencies for individual states. But all monetary issues should be controlled by a central regulator i.e. Nepal Rastra Bank.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>In a federal structure, the state revenue, expenditure and debts will have to be shared between central and local governments. How practically feasible will this be for Nepal?</strong></div>
<div style="text-align: justify;">
	As far as I know, the countries with federal structure have different forms of taxation. Some are levied by the central government while some others are at the states and municipal levels. There are three types of taxation. The municipal taxes would be the income of the particular municipality. Similarly, state taxes would be the revenue of the states. The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley. Then come the Terai hubs namely Bhairahawa, Biratnagar, Birgunj and Nepalgunj followed by towns like Pokhara and Hetauda. The economic activities in other areas are minimal. Therefore, resource mobilisation and sharing will be difficult proposition for federal Nepal. On the question of debt management, there needs to be an agreement on issuance of debt, use of debt and final repayment of debt. Most of the country’s debt issuance and repayment is at the central government level.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The rising recurrent cost is already eating up the country’s revenue generation capacity. With governments at the provincial levels, the overall administrative and recurrent public expenditure is likely to shoot up with no commensurate growth in revenue. Wouldn’t this be an alarming situation?</strong></div>
<div style="text-align: justify;">
	Resources remaining after fulfilling the recurrent expenditure are used in development activities. This is supplemented by the resources and means obtained from foreign aid and loans for development activities. The resources thus mobilised would be further divided in the federal system. Then there would be chances for even less resources and means left for development projects. The revenue grows along with the economic development of the country. If the country under federal system moves ahead and develops economically, the national income will grow. We can take Switzerland as an example where the per capita income is around US$ 34,000. But our country’s situation is such that federal structure can actually lead to resource crunch. The far western region, especially Karnali, is least developed. There are other under developed regions too where the conflict had escalated due to unequal distribution of income and resources. In such areas, the resources injected have to be comparatively higher. This would leave very little resources at the centre’s disposal. It would be ideal to have a small number of states and small state structures. Only then will we be able to mobilise resources effectively. At present, I see a faint possibility of introducing new forms of taxation for increasing resources. During the past decade or so, there have been very few new investments. Even now, the investment environment is gloomy for domestic as well as foreign investors. Foreign aid and internal resources mobilised by the state have not been effectively utilised. As a result, there is a liquidity crisis in the financial sector. The government has not been able to address budgetary issues well. There is fiscal imprudence which is reflected by large non-budgetary expense at the central level. It will be necessary to maintain strict fiscal discipline in a federal system. The non-budgetary expense has to be lowered to a minimum. If we can do that and utilise resources effectively for development, the situation may improve over the years as the economy will then grow. However, the current resource distribution pattern could invite complications.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we decrease current expenses so that more resources can be allocated in development activities?</strong></div>
<div style="text-align: justify;">
	We have very limited resources. So, when we want to divide them among the centre and the states, there could be complications. While making a transition to the federal structure, we should make sure that the structure envisioned by the constitution is small and dynamic. For example, there are more than 600 representatives in our existing Constituent Assembly. This number is massive given the size of our country. Compare this figure with our neighbouring country India which has 552 members in its lower house of parliament. It is said that our federal parliament will follow a bicameral system, for greater representation of every region. The number of representatives should be brought down significantly from the present one to ensure low governance costs. Also the size of the provincial government must be small and effective. If this is not ensured, very little resources would be left for development activities after dividing them among central and regional governments.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There has been no real debate on the economics of Nepal’s federal structure. Given this, how can we be definite about the direction we are heading?</strong></div>
<div style="text-align: justify;">
	I agree that there must be a serious debate on this issue. The statesmen and the CA too have not discussed fiscal federalism seriously. Major issues such as the availability of resources and means and the model of federal structure must be discussed now. I personally feel that without serious debates, going for federalism might backfire on the country in the long run. Nepal has limited resources. Therefore, the demarcation of states based on ethnicity could prove to be a dangerous proposition. It will definitely promote ethnic conflict among our own people. And we definitely don’t want Nepal to follow the example of Yugoslavia. The states must be divided based on economic reality.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What reforms do you think are required once we go federal?</strong></div>
<div style="text-align: justify;">
	Well, there are a lot of things that need to be reformed. Our GDP and tax ratio are lower compared to many countries. We can look at increasing tax compliance. In the recent past, media has reported tax evasion by big business houses. All citizens must feel that paying taxes is their duty and it should not be evaded. Greater tax generation will enable the state to mobilise adequate resources for development and social causes. Nepal has started providing social security allowances for elderly people. In the coming days, the state can offer free medicines and health services to the economically deprived people. For that, a sense of responsibility in people must develop to ensure tax compliance. If the government can take the role of a facilitator and focus its investment in infrastructure, Nepal can experience a prosperous economic development. The problems that we face today are that of infrastructure, labour relations and power. As per reports, around 200 small industries have closed shop owing to power shortage. Similarly, many industries have experienced decline in output due to labour unrest. The political parties must unite for national and development issues irrespective of their ideological differences.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being one of the poorest countries in the world where there is little revenue left for development after incurring current expenditures, can we afford a federal form of government?</strong></div>
<p style="text-align: justify;">
	If we see economically, it is very difficult due to the resource constraints. As and when we enter the federal structure, it will be necessary to differentiate federal and state taxes. Let’s take the example of the USA where the sales taxes are collected by the states. Similarly, the municipal and income taxes are collected, respectively, by the municipalities and the federal government. Our main sources of revenue are VAT, customs duties and income tax. The land tax, rental tax and other smaller taxes are collected by the municipalities. I think the problem in Nepal arises due to centralisation. The rights must be decentralised. If small structure and decentralisation of rights can be ensured, there is no need to create new states in the name of federalism. There are districts where there have been no economic and development activities. We have seen in the past also that the situation of conflict was invited by economic inequality. This inequality is due to the imbalance in economic opportunities for different regions and the failure of implementing economic development plans. The mid western and far western regions are the most backward regions of the country. Despite huge potential, Karnali region remains grossly underdeveloped. If the planners in the past had successfully taken the decentralising path, the people wouldn’t have been left dissatisfied. This happened due to huge economic disparity between the various regions. An economically decentralised country holds more promise than a&nbsp; federal structure.</p>',
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	(int) 6 => array(
		'Article' => array(
			'id' => '268',
			'article_category_id' => '40',
			'title' => '‘Development In One Region Should Complement Development In Another’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Pitamber Sharma.jpg" style="width: 163px; height: 182px;" vspace="2" />Dr Pitamber Sharma</b></div>
<div style="text-align: justify;">
	Geographer and Regional Planner</div>
<div style="text-align: justify;">
	There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The interim constitution says that the states, once created, must be autonomous. To ensure such autonomy also in the economic field, the states must have ample resources. How do you see the feasibility of such economic autonomy of the proposed states?</strong></div>
<div style="text-align: justify;">
	Being self-reliant will depend on the number of states and the criteria on which they will be created. In Nepal, autonomy is interpreted only in the political sense. It is often forgotten that political autonomy remains circumscribed in the lack of economic autonomy. If a state or province has to rely on the centre for all its development needs, how can it exercise autonomy in political or economic decision-making? All states may not have all the resources. However, care should be taken that each state is carved, as much as possible, in a way that it has at least some basic resources to complement its development efforts. There are 14 states proposed by the Constituent Assembly’s state restructuring committee. Many of these proposed states are simply not viable economically or politically. I believe that in Nepal we still have enough scope to design states as planning units. The foresight we show today will make it easier to deal with the problems of tomorrow.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the appropriate geographical delineation for distribution of natural resources among the new states?</strong></div>
<div style="text-align: justify;">
	Nepal is a country with enormous geographical and topographical diversity. This diversity in many ways has determined the type and distribution of natural resources. The Terai plain as well as the Inner Terai are rich in agricultural resources. This area also has a unique wildlife. Similarly, the hills and mountains are rich in biodiversity resources, hydro power, nature- and culture-based tourism resources etc. The element that links and complements the geographical diversity between the hills and the plains is the hydrological system – the major river basins of Nepal. There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources. However, we do not live in an ideal world. While natural resource endowment is important, equally important are the historic aspirations of the diverse communities that inhabit the different regions. These aspirations also need to be addressed in the formation of states. Nepal’s move from a unitary state to a federal one is dictated in many ways by these aspirations.<span>&nbsp;&nbsp; <br />
	<br />
	</span></div>
<div style="text-align: justify;">
	In a country like Nepal, the crux of the issue of federalisation is that the development in one geographical and resource region has to complement the development of another region. That is the basis on which the resources need to be considered in designing federal states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some political parties are strongly raising the demand for states based on ethnicities. How challenging will it be to manage and distribute the resources along these lines instead of geography- and resource-based states?</strong></div>
<div style="text-align: justify;">
	The political discourse on federalisation in Nepal has been dominated primarily by the issue of ethnicity. Not much attention has been paid to the attributes of an ethnic state, or even what comprises an ethnic state. Some people are scared of the word ethnicity altogether. The reality is that ethnicity makes a significant difference in the lives of people.&nbsp;Nepal has 100 designated ethnic groups according to the 2001 census. And there are 92 languages spoken in the country. Major ethnic/caste groups in Nepal have their territories of traditional habitation. The groups have settled continuously, are relatively concentrated, and have a significant and dominant, if not majority presence in particular areas. This is true for all large and small aadibasi and janajati groups and the Chhetris. However, the dalits do not have their own distinguished geographical territory or a separate identity by virtue of language.&nbsp;This is in spite of the fact that they comprise the third largest ethnic/caste group and the most marginalised population in Nepal.<br />
	 </div>
<div style="text-align: justify;">
	If all major ethnic groups in Nepal were to have their own states, it would be an enormous challenge to manage and distribute natural resources. Ethnic boundaries rarely coincide with resource boundaries. Even macro watershed would be divided among different ethnic domains. All hydropower resources would be in the domain of hill/mountain ethnic groups, with none in the Terai. The capacity of ethnic states to deal with the issues of mitigation and adaptation to climate change would be extremely limited. It is because this would require a coordinated watershed level response.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think that the redistribution of resources may ignite resource conflict after the formation of new federal states?</strong></div>
<div style="text-align: justify;">
	As I have mentioned earlier, much would depend on the criteria used in the designation of states, and of course the number of states created. The experience of other countries show that conflicts over control, regulation, use, benefit and maintenance of resources, particularly water, are among the common conflicts resulting from federalisation. Constitutional provisions are therefore made for arbitration and resolution of such conflicts. (Highlight.) The redistribution of resources is ensured mainly through inter-governmental transfers. However, to assure that the central government has enough resources to offset imbalances between the states, some clarity is required with respect to the share of local/state revenue going to the central treasury.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, you think the 14 states proposed by the CA’s State Restructuring Committee is not practical?</strong></div>
<div style="text-align: justify;">
	The idea of 14 states proposed in the draft report of the Constituent Assembly’s State Restructuring Committee, in my view, is neither rational nor appropriate. For a country of Nepal’s size, 14 states will be too many.&nbsp;If ethnicity is the only criteria considered for the designation of states, I see no justification for at least four of the proposed states.&nbsp;Jadan has a population of 50,000 while Bhotes comprise only 1.2 per cent of Nepal’s population. Sherpas total only 90,000 people and a mere 21 percent of Nepal’s total Sherpa population live in the proposed state. Additionally, Sunkoshi and Narayani have as mixed a population as any other ethnic state. One of the major problems with the report is that it does not lay down any principles for states’ formation. For example, when does an ethnic group merit the status of a state as opposed to an autonomous region within a state?<span>&nbsp;&nbsp; The report does not provide answers to these kinds of questions.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Running and maintaining the state affairs is a costly proposition. How would the states help in mobilising resources for the nation while meeting their own recurring costs?</strong></div>
<div style="text-align: justify;">
	At present, only nine among the 75 districts are in a position to generate revenues that go beyond meeting their recurrent expenditures. In other words, if all the proposed states of Nepal are to be in a position of meeting their recurrent expenditures and generate a surplus, it is basically from the revenue from these nine districts that will have to be somehow apportioned among the states. As I said earlier, inter-governmental transfers will have to play the key role in maintaining the financial viability of the states. Inter-governmental transfers should ensure that (a) all expenditure assignments of the states can be met through these grants and (b) that it should also provide the basis for basic long-term investments required for mobilising resources. In Nepal’s case, for example, the states falling under the current mid and far-western regions will need massive investments from the centre for at least 10 to 15 years, by which time they could be self-sustaining. Investments by the centre on key infrastructures in the state will remain crucial. One of the problems that the state governments in poorer states will have to face is the flight of capital as capital flies out from low-yielding states to high-yielding states. A situation can easily arise where the poor states become poorer while the rich ones become richer. This will emerge as a big challenge in the management of federalism. The success of the federalism enterprise may as well lie in the extent to which they are enabled to mobilise resources.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What may the reason that there is no meaningful debate taking place on state restructuring and the form of federal system?</strong></div>
<div style="text-align: justify;">
	The political parties are ignoring the most critical and operational issues of federalism. It was Maoists who raised the issue of the federal republic and turned it into a national agenda, and they did it right. The rationale for the federal republic was to break, once and for all, the shackles of a feudal, overtly centralised, monarchic, predatory state. This was a historic achievement. For the first time in nearly two-and-a-half centuries, it set the stage for redefining and reimagining Nepal. But the Maoist perception went astray because of taking ethnicity as the sole basis for federalisation. As a result, the question of resources, development and meaningful devolution of power remained ignored. The two other major political parties – the UML and the Nepali Congress – are still taking time to fully own the idea of a federal Nepal.&nbsp;It is evident from their reactive approach to the whole issue, so much so that their official positions are not yet clear. The Madhes based political parties too made the federal agenda their main political plank. But they only took it as far as it challenged the colonial flavour of the policies of the hill-centred Nepali state vis-a-vis the Madhes. The ‘one Madhes, one state’ slogan was raised as a vehicle for economically circumscribing the hills and making it a hostage of the Madhes, however defined. The ethnic dimension is critical and important but no less important is the issue of dealing with poverty, exclusion, and in a fundamental sense, the mode and meaning of development. The two issues are no doubt linked but one cannot be a substitute for the other.<br />
	 </div>
<div style="text-align: justify;">
	Thus the debate has centred on issues of identity and emotion rather than the more substantive issues of strategy and resources for development. I believe that once the dust settles and the states come into being, development will once again emerge as the agenda around which politics will revolve.<span>&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should be the main objective of federalism in Nepal’s context?</strong></div>
<div style="text-align: justify;">
	The objective of federalism in Nepal should be the creation of a prosperous country which will benefit all, irrespective of ethnicity, caste or class. The rational for federalism in Nepal has to rest on three premises. The first is the recognition of the ethnic, linguistic, cultural and regional identity and aspirations of the diverse population groups that inhabit Nepal. For over two centuries, the Nepali speaking, upper caste hill dwellers following the Hindu faith namely Bahun and Chhetri enjoyed the privileged patronage of the Nepali state.&nbsp;Shared ownership of the state requires that progressive ethnic, cultural and regional identities are given due recognition. The second is to facilitate rapid, equitable and inclusive development so that livelihoods of all, and particularly of the vulnerable, marginalised and disadvantaged groups, can be rapidly improved. This requires that adequate attention is paid to natural and human resources that can provide the basis for equitable and inclusive development. The third is to decentralise and devolve power to the lowest possible level so that the roots of a truly participatory and accountable democracy are strengthened.</div>
<p style="text-align: justify;">
	Two concepts, I believe, can help us move towards a federalisation that takes identity, inclusive development and devolution as the point of departure.&nbsp;The first is the concept of ethnic/caste groups that have suffered from historic discrimination and have a dominant presence in geographically adjacent and contiguous areas. The second is the concept of special autonomous areas. Following the first concept, federal units can be formed around a few major ethnic/caste/language group habitats that have historically remained in adjacent or contiguous areas, and have developed a sense of ethnic affinity over time. Such federal units can incorporate areas with existing or potentially sustainable natural resource as well as economic base. Following the second concept, special autonomous areas can be designated within federal units with particular ethnic/caste dominance.</p>',
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			'description' => 'There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources.....',
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	(int) 7 => array(
		'Article' => array(
			'id' => '267',
			'article_category_id' => '40',
			'title' => '‘Political Parties Must Honour The Constitutional Provision And Form State Restructuring Committee',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Prakash Chandra Lohani.jpg" style="width: 162px; height: 180px;" vspace="2" />Dr Prakash Chandra Lohani</b></div>
<div style="text-align: justify;">
	Former Foreign and Finance Minister and Co-Chairman of Rastriya Janashakti Party</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The state restructuring committee has not been formed yet. What are the reasons behind it?</strong></div>
<div style="text-align: justify;">
	It is clearly specified in the interim constitution that we should have a state restructuring committee. So, it is the responsibility of the government as well as of the political parties to ensure that the state restructuring committee is formed. The government as well as the major political parties have not fulfilled this responsibility. In fact, the state restructuring committee should have been formed while the Constituent Assembly was in its first session. The fact that this has not been done as yet is a reminder of our negligence towards the constitutional provision. I think when Pushpa Kamal Dahal was the prime minister, he tried to form it. He nominated Dr Ganesh Gurung to head it but the parties concerned were not able to agree with the names of other members. So, the body formed with Dr Gurung as its head did not take the full shape. It became a one-man defunct body. After Dahal left, Madhav Kumar Nepal took over the reins. At that time also, smaller parties like ours have been constantly telling the bigger parties to meet this constitutional provision.<br />
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it. When madhav Nepal was the Prime Minister, I don’t know if he ever tried to push this process forward. Most of the time, his government and the Maoists were at loggerheads with each other. There was no real initiative to draft the constitution. They spent their energy in the struggle for power. That is the reason why the state restructuring commission has not been formed yet. In fact, it was not an agenda of priority for the Maoists, Nepali Congress and the UML.<br />
	 </div>
<div style="text-align: justify;">
	They simply ignored this issue. Now, after the year-long extension of the Constituent Asembly, normally one would expect them to try and form this committee. However, they have ignored this again and we are now left with only two-and-a-half months from the deadline for promulgating the constitution. And still there is no seriousness about satisfying this constitutional provision. This is a sad story, to say the least. Now, the Maoists are saying that it doesn’t make any sense to form the state restructuring commission because the thematic committee working on state restructuring has already come out with its report. But what we have been saying is that this is a constitutional provision. If this provision has to be ignored, then people must prepare a proposal, make a constitutional amendment, take it to the parliament and remove this article from the constitution. As long as this article is there, we have to make sure that we honour it. I am sure this is an issue that will come up in our subcommittee meeting soon.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, it would not be possible to go ahead with the state restructuring without the commission’s report?</strong></div>
<div style="text-align: justify;">
	The state restructuring commission has to submit its recommendation before we make a final decision on state formation in this country and on the number and size of the provinces and many other issues related to federalism. We cannot ignore this constitutional provision. The responsibilities of the committee are to advice and provide suggestions.<br />
	 </div>
<div style="text-align: justify;">
	The constituent assembly has a right to either reject or accept them. Therefore, we must give them the opportunities as specified in the constitution. I think if we go about deciding the number of states without the commission’s recommendation that would be ignoring the provision of the constitution. It would neither be proper or correct nor acceptable.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why has there been no meaningful debate held so far for state restructuring?</strong></div>
<div style="text-align: justify;">
	It’s because different political parties have different propositions. Their formal proposition is different from what they say in informal interactions. This is also the part of the problem. I think if we have a state restructuring committee, it would help solve some of these contradictions. There has not been serious debate among the political parties primarily because the three major political parties have not given attention to this issue. They are involved in power struggle all the time and busy speculating on who would be the next prime minister. In a way, it is their sense of irresponsibility and negligence towards the commitment made to the people when the constituent assembly elections were held.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Which model of fiscal federalism would be most appropriate for Nepal?</strong></div>
<div style="text-align: justify;">
	It is the question of devolution of authority. One of the more important aspects of this is the financial authority. Till now, Nepal has been a centralised state. Most of the resources are collected by the central government. Now, we want to make sure that we devolve fiscal authority to states and also to the village development committees (VDC) so that they can raise resources on their own. I personally think that if the central government raises 60 per cent resources, remaining 40 per cent would be raised by the local government bodies, states and the VDCs.&nbsp;We have to work along the line of fixing such a ratio. I think 60:40 ratio would be quite logical.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of improper distribution of revenue in federal Nepal as the source of revenue would not be uniform in all the states?</strong></div>
<div style="text-align: justify;">
	I think we also need a financially strong central government. This is because, inevitably, some provinces are going to be financially weak. They may have the resources but these are largely unexploited. For example, in the hilly areas, hydro resources are there but it will take time to exploit them.In the mean time, we will have to find a way to compensate them for the lack of resources. That needs transfers from the central government.</div>
<div style="text-align: justify;">
	It will work out depending on population, human development index and so many other relevant variables. We have to give a sense of equity and justice to people in all the provinces of this country.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The idea of ethnicity based federal structure has courted big controversy. How does ethinicity-based federal structure fare in terms of fiscal federalism?</strong></div>
<div style="text-align: justify;">
	There is a big controversy on this issue. No doubt about that. Different political parties have recommended number of provinces varying from seven to 14. One of the remarkable things is that no particular ethnic group is in the majority in their proposed respective states. Take the case of Limbuwan, for example. In Limbuwan, you have a total of 30 to 35 per cent Rais and Limbus if you combine both the communities. The rest 60 to 70 per cent are non-Limbus. Therefore, to go ahead with the idea of ethnic states, in a way, might alienate the other majority population and may create ground for conflict.<br />
	 </div>
<div style="text-align: justify;">
	The important thing is representation in the provincial and national parliament in line with the ethnic distribution. We have to assure and be clear on that point. Once you achieve that, I don’t think we should stress too much about this ethnic issue. People want representation in the power structure. And that representation must reflect the underlying distribution of the ethnic population. Once there is the electoral system, it makes sure that the ethnic representation is there in line with their ethnic distribution of population in the country. I think it would solve a lot of problems. Once you move in this direction, emphasis on ethnicity alone is going to wield less importance.</div>',
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	(int) 8 => array(
		'Article' => array(
			'id' => '266',
			'article_category_id' => '38',
			'title' => 'The Importance Of Enterprise  Performance Management',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<i><img alt="anil" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/1303899771.jpg" style="width: 105px; height: 156px;" vspace="5" /><br />
	<br />
	<strong>By Anil Neupane<br />
	</strong><br />
	</i></div>
<div style="text-align: justify;">
	Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities necessary to reach those objectives. It is often referred to, with the usage of terms such as Corporate Performance Management (CPM), Financial Performance Management (FPM) and so on. It comprises Strategy Management, Profitability and Cost Management, Business Planning, Financial Consolidation, Spend, Supply Chain and other operational performance areas. EPM aligns the processes, systems, and metrics needed to measure and manage the performance of an organisation.<br />
	<br />
	EPM supports both cost optimisation and growth initiatives. It is a suitable fit for nearly all organisations and should be a priority initiative for CFOs to enable finance function to deliver short and long-term strategic benefits to businesses.<br />
	<br />
	It is considered as a diagnostic tool to monitor the pulse of an organisation by using a set of processes, frameworks, and systems for activities such as planning, measuring, communicating, and monitoring business results. Enterprises typically link these activities to corporate strategies and objectives and might drive them down to many individuals within the organisation to encourage accountability and control. Forrester defines business performance solutions as a category of purpose-built software applications that support these activities. The major BPS functional elements include:<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Strategy and performance measurement address goals, objectives, and accountability<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	A strategy management application supports formal strategy management philosophies (eg, the Balanced Scorecard) but might be adapted to a business’ specific needs. Applications often display the strategy definition in visual strategy maps. Scorecards measure progress against the goals and objectives set forth in the strategy framework. Performance dashboards display more detailed information and allow drilling down to root-cause detail. Dashboards typically include a variety of key performance indicators (KPIs) that might include strategic scorecards as well as relevant comparisons against plans, budgets, forecasts, prior performance, and industry benchmark data.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Planning, budgeting, and forecasting solutions support multiple forward-looking processes</strong></div>
<div style="text-align: justify;">
	Although used almost universally as a control on spending, budgeting often falls short in supporting performance initiatives often as a result of some rigorous and inflexible process and not necessarily due to a software shortcoming <i>per se</i>. Fortunately, in addition to budgeting, the planning solutions support a variety of scenario-based planning activities as well as forecasting processes that add value beyond which is provided by <img align="left" alt="enterprices" border="1" height="259" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/epm.jpg" style="width: 477px; height: 259px;margin:10px;padding:10px;" vspace="10" width="477" />traditional budgeting processes.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Cost and profitability management provides detailed analysis to improve margins.</strong></div>
<div style="text-align: justify;">
	This complex modelling activity helps organisations analyse development, production, and operating costs against revenues by product, customers, and lines of business. Cost and profitability management applications often use activity-based costing as the methodology to develop sophisticated cost and profitability analytical models.</div>
<div style="text-align: justify;">
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Financial reporting and consolidation produce financial statements.</strong> Financial reporting and consolidation applications produce reports focused on delivering financial statements based on accounting results. Statutory consolidations support regulatory compliance and generally accepted accounting principles (GAAP) requirements. These applications also support internal reporting of financial information.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why are companies after it globally?</strong></div>
<div style="text-align: justify;">
	Despite the economic downturn and a global decline in overall IT spending of approximately 3 per cent, spending on CPM Suites remained positive (growing at 3.6 per cent in 2009). Through the last 24 months of economic uncertainty, EPM has helped to manage cost optimisation efforts, but through 2010, many more EPM initiatives were justified on the basis of supporting growth strategies. Furthermore, many of the stalled or sidelined EPM initiatives that did not advance in 2009, were reinstated during 2010.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	With economic downturn during the last few years, companies around the world are more focused on cutting costs and increasing performances. Therefore, EPM has been their major focus to achieve this objective and to have a better understanding of the drivers of corporate profitability.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	Although awareness of the EPM concept has become more widespread, according to an estimate, 40 per cent of large enterprises and as much as 75 per cent of midsize businesses are using spreadsheets or legacy applications to meet their core management processes for BP&amp;F, financial consolidations and financial reporting.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>SAP EPM Suite<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	SAP is a global leader in EPM products. SAP recognises the importance of supporting these functions for an enterprise by establishing a new cross-functional unit, focusing on business performance optimisation. This unit brings together integrated technology and product portfolio with the people, ecosystem partners, and best practices specifically designed to help organisations drive business performance, manage risks and optimise the financial value chain. SAP Business Objects and EPM&nbsp;solutions bring together a set of applications that combine strategic goal-setting linked to effective budgeting and reporting, with additional abilities to analyse profitability. Similarly, SAP Business Planning and Consolidation (SAP BPC) is another tool that is dominating the global EPM suite market.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The major strength of SAP is its dominance in ERP market and its support base around the globe. Lately, SAP has an implementation partner in Nepal as well.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM and Business Intelligence</strong></div>
<div style="text-align: justify;">
	It is sometimes confusing to distinguish between business intelligence (BI) and EPM. The major reason behind this is because different vendors define these terms in different ways. In general context, business intelligence supports EPM tools to achieve results. In terms of strategy, Business Intelligence offers the tools necessary to improve decision-making, but not linked to organisation’s strategy. On the other hand, EPM provides a closed-loop support: linked to strategy through CSFs and KPIs. In terms of purpose, the BI tool helps organisations set and monitor their goals whereas EPM tools help organisations guide their business towards its goals. The scope of BI may be limited to one or more departments or functional areas whereas the scope of EPM is for the entire enterprise.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	As shown in the figure above, EPM forms the higher level of pyramid whereas BI sustains the EPM processes as a supporting tool.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM in terms of Nepal<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	As in the case of companies around the world, most companies in Nepal still use spreadsheets or legacy system for financial planning, budgeting and consolidation. Due to this, the predictions are often time consuming, inflexible and inaccurate. Unlike few years back when there were very little EPM tool options in Nepal, now the country already has a SAP implementation partner. Therefore, companies now have opportunities to implement best EPM tools, like SAP EPM or SAP Business Planning and Consolidation. This shall greatly help business companies distinguish themselves from their competitors.<br />
	<br />
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong><i>(Neupane is a SAP global certified consultant currently working in London. He can be reached at neupane_anil@hotmail.com)</i></strong></div>
<div style="text-align: justify;">
	<strong><br />
	<br />
	</strong></div>',
			'published' => true,
			'created' => '2011-04-27',
			'modified' => '2013-05-24',
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			'description' => 'Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities.....',
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	(int) 9 => array(
		'Article' => array(
			'id' => '265',
			'article_category_id' => '39',
			'title' => 'Healthcare Technologies: Promoting Personal Wellbeing',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Vineet Kumar Tulshyan.jpg" style="width: 218px; height: 168px;" vspace="2" />Vineet Kumar Tulshyan</b></div>
<div style="text-align: justify;">
	Director</div>
<div style="text-align: justify;">
	Healthcare Technologies Pvt Ltd</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Incorporated in 2001, Healthcare Technologies Pvt Ltd has come a long way since. With an annual turnover of Rs 80 million, it has targeted a growth of 15-20 per cent for 2011. Beginning with importing medical equipments in 2001, the company set up a Personal Healthcare Division in 2008. “Given the immense potential for its market in Nepal, we hope that the industry size grows by 1000 per cent,” says Vineet Kumar Tulshyan, the Director of the company. He adds that this tremendous growth can be realised by spreading awareness about personal healthcare. While the expected market is worth a whopping Rs 500 crores, Tulshyan says the current sales of personal healthcare products in Nepal are mere Rs 2-3 crores.<br />
	 </div>
<div style="text-align: justify;">
	Run by a group of young and experienced professionals with core interests in the healthcare sector, the company focuses its efforts in specialised areas. The primary objective of Healthcare Technologies is to deliver qualitative medical products and services to the health professionals in Nepal. It has been active in the healthcare sector in different forms and areas. The company imports and distributes medical and surgical equipments, surgical goods, personal healthcare items, laboratory products etc. Its medical equipments are received well in the private sector entities while it is the market leader in personal healthcare products. “Our Microlife range of products enjoy 50 per cent market share,” informs Tulshyan.<br />
	 </div>
<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/corporate focus1.jpg" style="width: 266px; height: 166px;" vspace="2" />Healthcare Technologies caters its products to government institutes and organisations, pharmaceuticals companies, hospitals, medical colleges, nursing homes, INGOs and NGOs among others. It has a nationwide distribution network which carries out the work in the most professional manner possible. With its distribution channel in place all over Nepal, it has registered a rapid growth in the last three years.&nbsp;The company had a group turnover (Medical Division) of approx US$ 1.7 million in the last financial year, a growth of nearly 80 per cent. Besides the Kathmandu Valley, the company distributes its products through its dealer network in Butwal, Bhairahawa, Pokhara and Birgunj in central Nepal. Similarly, it has dealers in Nepalgunj in western Nepal and Janakpur, Biratnagar and Dharan in eastern Nepal. The company also indulges in direct marketing to hospitals and nursing homes.<br />
	 </div>
<div style="text-align: justify;">
	A total of 15 people are employed with the company under the medical division. Tulshyan says, “I have inculcated a culture in my colleagues that if the company grows, it benefits the employees too.” Healthcare Technologies was recognised by the Nepal Radiological Society in 2009 for its contributions. As part of its corporate social responsibility initiative, it has donated equipments such as Blood Pressure Machines and Thermometers to NGOs and charity hospitals. The company’s mission is to promote personal healthcare system in Nepal. Tulshyan reiterated that spreading awareness is crucial. “In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions, in time,” says he.<br />
	 </div>
<div style="text-align: justify;">
	Tulshyan owes his company’s success to being honest with products and customers. Irrespective of temptations, he does not recommend sub-standard products, he explains. As part of the company’s future endeavours, he plans to manufacture surgical products and start exports in five years time if the government rules and regulations favour the business environment. He says that government support is absolutely important for the sector to flourish.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Healthcare Technologies and its sister concerns</strong></div>
<div style="text-align: justify;">
	1)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Healthcare Technologies Pvt Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>DeVilbiss Healthcare –</b> Portable Oxygen Concentrator and Respiratory Items (5 litre Compact Oxygen Concentrator, IGO Portable Oxygen Concentrator, IFill Personal Oxygen Station, CPAP &amp; Bilevel CPAP)</span></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Microlife AG (Switzerland) –</b> Hypertension and Fever Management Products (Digital Blood Pressure Machine, Aneroid Blood Pressure Machine &amp; Stethoscope, Digital Thermometer)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Bayer HealthCare – </b>Diabetic Care Division</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>AMPall (Korea) – </b>Syringe and Infusion Pumps (Syringe Pump SP-8800, Infusion Pump IP-7700)</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>Mitsubishi Electric – </b>Video Thermal Printer and Paper</span></div>
<div style="text-align: justify;">
	2)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sun Medical Concern:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Technologies (Medical Equipments)</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Diagnostics (Contrast Media)</div>
<div style="text-align: justify;">
	3) Sun Exim:Manufacturer, Importer and Exporter of Medical Recording Paper</div>
<div style="text-align: justify;">
	4)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical Associates Services Pte Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Hitachi Air Compressor</b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Thermax Ltd </b>(India)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; TAS Medical Gas System </b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Grundfos </b>(Denmark)</div>
<div style="text-align: justify;">
	5)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Care Plus:</span>Branded Personal Healthcare Product showroom in the heart of Kathmandu City</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	Strengths</div>
<div style="text-align: justify;">
	Ø Quality of Products</div>
<div style="text-align: justify;">
	Ø Immediate After Sales Service</div>
<div style="text-align: justify;">
	Ø Engineer available on Hotline</div>
<div style="text-align: justify;">
	Ø Competitive Prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Weaknesses</div>
<div style="text-align: justify;">
	Ø Belief in honesty (Tulshyan says he doesn’t bribe to get business)</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Opportunities</div>
<div style="text-align: justify;">
	Ø Spreading awareness</div>
<div style="text-align: justify;">
	Ø Small health centres outside Kathmandu Valley</div>
<div style="text-align: justify;">
	Ø Largely unexploited market</div>
<div style="text-align: justify;">
	Ø Free BP check up camps in cities and small towns</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Threats</div>
<div style="text-align: justify;">
	Ø Low quality products</div>
<div style="text-align: justify;">
	Ø Unhealthy competition</div>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2011-04-27',
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			'keywords' => '',
			'description' => '“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”',
			'sortorder' => '191',
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	(int) 10 => array(
		'Article' => array(
			'id' => '264',
			'article_category_id' => '39',
			'title' => 'CG Education:Taking Education Beyond Classroom',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bhushan Gurung.jpg" style="width: 197px; height: 141px;" vspace="2" />Bhushan Gurung</b></div>
<div style="text-align: justify;">
	GM</div>
<div style="text-align: justify;">
	CG Education</div>
<div style="text-align: justify;">
	“We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Encouraged by its spectacular growth in recent times, CG Education aims to have 10,000 students by 2015 under its umbrella. It encompasses schools from pre-school to mainstream schooling under both CBSE and HSEB boards. Ranging from kindergarten to post-graduate level, it plans to expand its reach and create facilities at all major cities in the country. Bhushan Gurung, the GM of CG Education asserts, “We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The organisational vision is to be an integral part of the educational revolution and deliver quality to its students. “Our contribution will not only synergise the vibrant educational sector of the nation but will also activate others to follow suit,” adds Gurung. It was part of the strategic plan of Chaudhary Group, the parent company, to balance its investment portfolio between manufacturing and service sectors. CG Education is one venture that strengthens the group’s foray in the service sector where it sees a tremendous growth potential. More importantly, the society at large – students, government and the nation – will benefit from this gigantic effort.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	CG Education’s investment in its present portfolio of schools, colleges and institutes is over Rs 100 crores. This is spread over its flagship ‘The Chandbagh School’ with likely additions in Pokhara , Butwal and the ‘DPS School’ in Birgunj. The latest entrant under its flagship is ‘The Chandbagh Pre School’, a Montessori system based school for children up to six years of age. It envisages acquiring about 25 schools and institutions and bring them under the CG Education fold. The organisation also plans to work on a public-private partnership with Nepal Government on operating many government educational institutions. It hopes that this will result in a total enhancement of quality of these institutions in terms of faculty, infrastructure and management.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Chaudhary Group believes that high quality affordable education is the key to Nepal’s development. Based on the experience gained from running The Chandbagh School successfully in Kathmandu and with a desire to replicate and move to the next level, it entered into a joint venture with Manipal K-12 Education. The venture offers management services to existing and new schools under the brand name CG-Manipal Schools. It also offers <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cg edu.jpg" style="width: 349px; height: 164px;" vspace="2" />ICT-based School learning solutions and tutorials. “The CG-Manipal Schools is a logical extension of the Manipal Group’s strength in education and CG’s new initiatives in the field of education,” says Gurung. The schools are designed to use the right combination of technology and pedagogy for an effective learning process.&nbsp;Manipal K-12 is part of Pearson Education, the largest educational resource providing organisation in the world. In recent times, CG-Manipal has acquired the highly successful Campion Institutions namely Campion School-Lagankhel, Campion Academy-Lagankhel, Campion Kathmandu Higher Secondary School-Gahanapokhari and Campion College-Kupandole.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><i>Digi</i> Classrooms</strong></div>
<div style="text-align: justify;">
	Involved in various educational activities in Nepal since 1996, CG Education has now initiated efforts to establish <i>Digi</i> Classrooms in the educational institutions of the country. It is a cognitive learning approach and is a widely accepted theory on the learning process. “CG Education is now taking an initiative to establish <i>Digi</i> Classrooms in the educational institutions of Nepal,” Gurung proudly states. CG Education wanted to introduce a new approach where students can understand better and retain new information and hence, the effort. <i>Digi</i> Class’s multimedia contents include audiovisual aids, demonstrations, simulations, rhymes, games, activity sheets, eBooks, 3D interactivity, and patterns which help teachers teach the students in a better way and make them understand better. The content support for digital classes is from Manipal K-12. The curriculum is as per the needs and requirements of boards such as CBSE and SLC/HSEB. The product is available in a hassle-free way under Single Window Service.<br />
	 </div>
<div style="text-align: justify;">
	The schools associated with CGEducation have already implemented ICT-enabled classes.<br />
	 </div>
<div style="text-align: justify;">
	<strong>CG Polytechnic</strong></div>
<div style="text-align: justify;">
	With the intention to develop skilled human resource for Nepali Industries and for better employment opportunities, CG Polytechnic aspires to be the backbone of country’s skill inventory. The Chaudhary Group of industries and Manmohan Memorial Polytechnic (MMP) have jointly launched a technical training programme at CG’s industrial village - CUG in Nawalparasi from September 2009 offering technical courses on mechanical and industrial faculties. The training includes both theory and practical classes in various technical subjects which is tailor made to meet industrial requirement.&nbsp;The main objective of the training is to bring significant improvement in human skill matrix of the organisation.<br />
	 </div>
<div style="text-align: justify;">
	&nbsp;CG Polytechnic is building its capacity to diversify into food technology, accountancy and many other sectors on the need assessment. To be more customer-oriented, it reaches different relevant stakeholders for need analysis as well as maintaining quality of education. In the very near future, CG Polytechnic will become a landmark where technical skills get honed to the highest level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Accreditation and Affiliation</strong></div>
<div style="text-align: justify;">
	CG Education wants to contribute in all streams of education with the aim to be acknowledged as an institution with complete educational solution. Apart from managing schools and colleges, CG Education is involved in the vocational sector as well. With this objective, it has joined hands with renowned educational institutions of the world. Its international affiliations and accreditations include CBSE Board, ‘A’ Level Cambridge University besides the joint venture with Manipal K-12. CG Education’s association with other educational institutions is intended to derive quality from their years of experience in mainstream education. It is also in the process of obtaining accreditation and affiliation with ISO, IB, ETS, ESOL and other renowned educational institutions and agencies.</div>
<p style="text-align: justify;">
	CG Education’s ultimate vision and mission is to impart world class holistic education and produce educated citizens equipped to meet international standards.</p>',
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	(int) 11 => array(
		'Article' => array(
			'id' => '263',
			'article_category_id' => '39',
			'title' => 'Leon Motors:Recreating Mitsubishi Magic',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Ashish Shrestha.jpg" style="width: 246px; height: 176px;" vspace="2" />Ashish Shrestha</b></div>
<div style="text-align: justify;">
	Executive Chairman</div>
<div style="text-align: justify;">
	Leon Motors Private Limited</div>
<div style="text-align: justify;">
	“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors Private Limited is the authorised sub-distributor in Nepal for Mitsubishi Motors Corporation, Japan and Mitsubishi Fuso Group, Japan. The company started importing Mitsubishi vehicles in 2008 and has sold over 150 units so far. 2010 was its most productive year in which it sold 70 units. The vehicles sold by the company fall on different price points ranging between Rs 4 million and Rs 12 million.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors is the brainchild of its dynamic Executive Chairman Ashish Shrestha. Coming from a family that has traditionally dealt in gold for generations, Shrestha holds an MBA degree from American InterContinental University in United Kingdom. After returning to Nepal in 2006, he wanted to establish a business that suited his personality and justified his management acumen. And thus, Leon Motors came into being in 2007. It is currently focused on reviving the brand image of Mitsubishi Motors. The brand lost its charm and took a beating in the Nepali market due to non-availability of new models from 1998 till 2006. Shrestha says, “A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.” He believes that 236 per cent duty on importing vehicles is astronomically high and plagues Nepali automobile market to a large extent. The company plans to revive Mitsubishi Fuso trucks and buses in 2011 to achieve its targeted growth of 10 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Shrestha rues the unhealthy competition that exists in the automobile market. According to him, a number of automobile companies in Nepal under-invoice their transactions which helps them to dodge the tax and reduce the retail price or increase their profit. He strongly believes that this unethical practice needs to be stopped as it creates unfair competition in the market. To make his point strong, Shrestha proudly shows a certification from TRACE Inc, a US based internationally recognised organisation promoting transparency and anti-bribery compliance in international business transactions.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The company practices an ‘open door policy’ where the employees have direct access to Shrestha for any matter they need to discuss, be it a suggestion or a complaint. An outsider might as well feel that it’s a family run business. That’s the level of camaraderie which exists between the employees at Leon Motors. As part of its CSR (Corporate Social Responsibility) initiative, the company supports an NGO, Society Developer Nepal with its endeavour in providing education for underprivileged children.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Auto Works is the sole authorised after-sales and service centre for Mitsubishi Motors Corporation and Mitsubishi Fuso Group. Besides this servicing arm of Leon Motors Private Limited, there are a number of group companies <i>(see box)</i>.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This group of businesses employs more than 50 people on a permanent basis and considers itself blessed to have a dedicated workforce, many of whom have been involved in their jobs for years now. Shrestha believes that the market is circled with inflated prices, for example, unreal values of real estate holdings. He adds that this coupled with political instability are the major reasons behind people refraining from making investments in the country. On an optimistic note, however, the group plans to enter hospitality business by establishing boutique hotels. It is currently scouting for properties in Kathmandu and Pokhara and seeks to contribute towards Nepal’s tourism prospects. On a personal note, Shrestha has the burning desire in him to bring more hydropower projects to Nepal. He hopes to succeed in convincing investors to do so as it promises to put the country back on track to attain sustainable development. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sister concerns of Leon Motors Pvt Ltd</div>
<div style="text-align: justify;">
	<b>1.&nbsp;Leon Global Private Limited (Trading) </b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; A successful trading house, it has represented an impressive list of international organisations on turnkey projects in Nepal. The company promotes development related projects in the tourism and civil aviation sector, establishment of industries, construction of hydropower projects, supply of communication equipments etc to Nepalese Army, Nepal Telecom and Civil Aviation Authority of Nepal and supply of construction equipments to the Ministry of Physical Planning &amp; Works among others.&nbsp;It is extensively involved in liaison work and promotional activities and provides complete local support during pre and post tendering periods.<br />
	 </div>
<div style="text-align: justify;">
	<b>2. Leon Hager International Private Limited (Distribution)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; It is into distribution business representing various international beverage companies around the world. It currently imports and distributes alcoholic and non alcoholic brands such as ‘Nite’, a ready-to-drink (RTD) product from Thai Spirit Industry Co Ltd, Thailand; ‘Ignite’, a vodka based RTD product from Ignite Corp Pty Ltd, Australia; ‘Jugular’ and ‘Rock’ energy drinks from Jugular Global Pacific Ltd, Australia; ‘Victoria Bitter’ – Australia’s highest selling beer – popularly known as VB from Foster’s Group and rich and robust cooking wines from Australia and France among other European countries.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<b>3. Green City Development Private Limited (Township Development)</b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; This company was established in 2007 along with the leading business houses to develop first-of-a-kind township within the Kathmandu Valley. It plans to build a township covering approximately 387 acres of land with all modern amenities one can think of. Currently, the company is busy purchasing land at the site of the planned project. While it hopes to complete its land acquisition deals by this year end, the project plan and design is being prepared by a Singapore-based firm.<br />
	 </div>
<div style="text-align: justify;">
	<b>4. Ivory International Private Limited (Construction)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Involved in construction business, it has tied up with a leading Chinese construction company, China Railway Engineering Group Co Ltd. This joint venture has been constructing various projects that include commercial buildings, hospitals, hotels, apartment buildings, super malls, roads, bridges, hydropower plants and many more.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	<b>Strengths </b></div>
<div style="text-align: justify;">
	*Strong management team</div>
<div style="text-align: justify;">
	*Prime location (Shantinagar, New Baneshwor)</div>
<div style="text-align: justify;">
	*Famous brand name</div>
<div style="text-align: justify;">
	* Innovative ideas</div>
<div style="text-align: justify;">
	<b>Weaknesses</b></div>
<div style="text-align: justify;">
	* Branding hiatus between 1998-2006</div>
<div style="text-align: justify;">
	* Lack of a state-of-the-art showroom</div>
<div style="text-align: justify;">
	<b>Opportunities</b></div>
<div style="text-align: justify;">
	* Impending expansion</div>
<div style="text-align: justify;">
	* Sports models</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; (small hatchback cars by 2011 end)</div>
<div style="text-align: justify;">
	<b>Threats</b></div>
<div style="text-align: justify;">
	*Too many players in the market</div>
<div style="text-align: justify;">
	* Unhealthy competition</div>
<div style="text-align: justify;">
	* Competitors’ prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Mitsubishi Products in Nepal</div>
<table border="1" cellpadding="1" cellspacing="1">
	<tbody>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Mitsubishi Pajero</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Pajero Sport</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Outlander</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Active Smart X-SUV (ASX)</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					L200 Sportero</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					L300</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Lancer Ex</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Rosa</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Heavy Duty Trucks &amp; Buses&nbsp;</div>
			</td>
		</tr>
	</tbody>
</table>
<p style="text-align: justify;">
	 </p>',
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			'description' => '“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”',
			'sortorder' => '189',
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	(int) 12 => array(
		'Article' => array(
			'id' => '261',
			'article_category_id' => '38',
			'title' => 'Japan’s Earthquake:A Global Wake Up Call',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<span><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Jagadish Ghosh.jpg" style="width: 106px; height: 134px;" vspace="2" />Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.</span></div>
<div style="text-align: justify;">
	<i>By Dr Jagadish Ghosh</i></div>
<div style="text-align: justify;">
	<b>&nbsp;</b></div>
<div style="text-align: justify;">
	'After three years, even a disaster can be good for something’ goes a Japanese proverb. But in the midst of this appalling devastation, it might be obscene to suggest that a disaster of this magnitude could possibly be turned into good for something. Evidently, time and again, not only the human spirit but also the laws of economics have proved amazingly resilient in the face of the most terrible of adversities. The widespread destruction has been taken as a challenge and an opportunity to rewrite the triumphant history of growth and development with renewed spirit and zeal. The destruction spurs reconstruction and acts as a stimulus for economic enterprise.<br />
	 </div>
<div style="text-align: justify;">
	A ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan’s east coast on 11 March 2011 sweeping away boats, cars, homes and people as widespread fires burned out of control. The magnitude 8.9 offshore quake places the earthquake as the fifth largest in the world since 1900. It is also the largest in Japan since modern instrumental recordings began 130 years ago. The two disasters were followed by the damage at nuclear reactors threatening harmful radiation. Japanese Prime minister Naoto Kan has described the catastrophic combination of earthquakes, tsunami and nuclear meltdown as the biggest crisis the country has had to face since the end of World War II.<br />
	 </div>
<div style="text-align: justify;">
	The quake caused a 400-km long and 160-km wide rupture in the earth’s crust as one tectonic plate dove under another off the coast of northern Japan. This led to an upheaval in the sea above it, sending a 30 foot wall of water racing up to 10 km inland in Japan and reaching California across the Pacific Ocean 10 hours later. Tsunami warnings blanketed the entire Pacific as far away as South America, Canada, Alaska and the entire US West Coast. The quake was followed by more than 20 aftershocks for hours, most of them of more than magnitude 6.0. As many as six reactors at the Daiichi nuclear power plant in Fukushima are facing crisis at one level or the other verging of N-disaster. The death toll was likely to continue climbing over 10,000 given the scale of disaster. But without minimising the tragedy in any way, the damage in terms of human lives has been remarkably contained relative to what might have been. For that, all credit must go to successive Japanese administrations and civil society. Situated on the ‘Ring of Fire’ – an arc of seismic activity around the Pacific Basin – Japan has been hit time and again by devastating earthquakes, from the one in Tokyo in 1923 to Kobe in 1995. But the Japanese have drawn their lessons from these. So they have the world’s most sophisticated earthquake early warning systems and an extensive tsunami warning sensor network. They have building codes that keep such exigencies in mind. Similarly, they have thorough disaster management plans at every administrative level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Insured Losses<br />
	</strong></div>
<div style="text-align: justify;">
	The earthquake in Japan could lead to insured losses of nearly $35 billion, according to risk modelling company AIR Worldwide, making it one of the most expensive catastrophes in history. It is nearly as much as the entire worldwide catastrophe loss to the global insurance industry in 2010 and could be the triggering event that forces higher prices in the insurance market after years of decline. This temblor will go down as the costliest earthquake in modern history in terms of insured losses, surpassing the roughly $15 billion in losses of the 1994 Northridge earthquake in California.<br />
	 </div>
<div style="text-align: justify;">
	<strong>2010 – The Year of Earthquakes</strong></div>
<div style="text-align: justify;">
	The most devastating earthquake of the year with more than 220,000 deaths struck Haiti, a country that was in no way prepared for such an event. Chile and New Zealand, on the other hand, were very well prepared. As a result, the challenges presented for reconstruction and the insurance underwriting aspects must be assessed differently for different countries.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Scientific Analysis</strong></div>
<div style="text-align: justify;">
	On 12 January 2010, Haiti suffered the most devastating seismic catastrophe since the destruction of Tangshan in China in 1976. The quake, with a magnitude of 7.0, did not come as a great surprise for seismologists. The danger had been clearly stated in a scientific publication dated 2008. The epicentre of the quake which ravaged the capital Port-au-Prince and the surrounding area was located near the boundary between the North American and Caribbean plates. The Enriquillo-Plantain-Garden Fault, which was originally considered to form the quake’s epicentre, runs in an east-west direction here. The situation was further aggravated by the fact that the rupture in the earth’s crust propagated towards the capital from its hypocentre west of Port-au-Prince.<br />
	 </div>
<div style="text-align: justify;">
	The associated interference of seismic waves magnified the vibrations. Intensive geological and geophysical investigations after the quake have revealed a highly complex rupture process. It appears that a previously concealed blind thrust fault was also involved and interacted with the Enriquillo-Plantain-Garden Fault. This is of significance for the future earth quake potential in the Port-au-Prince area. It may be assumed that the stresses accumulated in the Enriquillo-Plantain-Garden Fault since the earthquakes of 1751 and 1770 were not fully released on 12 January. Moreover, the investigations have also shown that strong shaking was not restricted only to areas with soft, unconsolidated sediments. Due to the topography, it also occurred on a hillside in the Petionville district, south of the city centre.<br />
	 </div>
<div style="page-break-after: always;">
	<span style="display: none;">&nbsp;</span></div>
<div style="text-align: justify;">
	The Chilean earthquake six weeks later did not strike unexpectedly either. The strongest earthquake ever recorded by instruments worldwide with a magnitude of 9.5 had already occurred in the Valdivia/Puerto Montt region, on the boundary between the Nazca and South American plates, in 1960. To the north of this region, a magnitude 8.0 quake off the coast of Valparaiso caused damage all the way to Santiago in 1985. The area between these two rupture zones, however, had remained relatively quiet since 1835. This ‘seismic gap’ was filled by the Maule quake on 27 February, with a magnitude of 8.8.<br />
	 </div>
<div style="text-align: justify;">
	A third earthquake, which struck Qinghai province in Central China on 13 April, paled in comparison to these two major catastrophes. Its magnitude was similar to that of the Haitian quake and claimed roughly 2,700 lives. The earthquake which struck New Zealand’s South Island on 3 September attracted greater publicity. This was not due to its magnitude of 7.0, similar to that of the quakes in China and Haiti. What made this quake different was that, unlike the Haiti and Chile cases, an earthquake had not been expected here, 40 kilometres west of Christchurch. Experts had focused more on the Alpine Fault to the northwest which marks the boundary between the Indo-Australian plate in the west and the Pacific plate in the east. The Darfield earthquake (named after the town closest to the epicentre), however, occurred along a previously unknown fault system under the sediments of the Canterbury Plains. Unlike Port-au-Prince, the rupture proceeded away from the city in this case but the energy emitted was unusually high for a quake of this magnitude.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why Haitian earthquake proved most devastating</strong></div>
<div style="text-align: justify;">
	Buildings of every kind – from representative buildings, such as the government palace and the Hotel Montana, to mud huts – were damaged more or less indiscriminately by the earthquake in Haiti. The corporate headquarters and production facilities of foreign companies remained structurally intact. Yet the few insured losses stemmed primarily from this sector. There are several reasons why the Haitian earthquake proved to be the most devastating ever in recent times, as expressed by the overall loss in relation to gross domestic product. Among others, they include the lack of building regulations, poor building material and a shortage of qualified labour as well as the absence of an institutional framework ensuring that construction projects are completed in an orderly fashion.<br />
	 </div>
<div style="text-align: justify;">
	The Maule quake in Chile was the first earthquake of high magnitude and correspondingly long duration (over 120 seconds) to test modern high-rise buildings. The high overall loss of US$30 billion was not caused by instability. Both the quality of Chile’s earthquake building code and its implementation are very good on a global scale. Only five of the 12,300 buildings erected since the last major earthquake in 1985 collapsed. Another 50 or so had to be demolished on account of massive structural damage. The magnitude of the overall loss is due above all, to the damage to non-structural elements in addition to the small number of major losses. Among other things, these include non-supporting walls, false ceilings and façade elements. Evidently, the building code must be updated in order to avoid or reduce the extent of such damage to property. In some cases, infrastructure also proved unexpectedly unstable as in the case of the motorway linking the international airport and the city of Santiago.<br />
	 </div>
<div style="text-align: justify;">
	In Chile, the load-bearing structure of mid-rise buildings (up to 20 floors) is primarily made up of shear walls parallel to the axis of the building. Compared with framed structures, such buildings are fairly rigid when exposed to seismic stresses. Newer buildings, however, tend to have thinner walls. The necessary transverse reinforcements also proved inadequate in some cases. Most of the few cases of major damage are attributable to such shortcomings. Low buildings with up to four floors are frequently built with confined masonry. In this case, the individual brick wall elements are connected by cast pillars of reinforced concrete. This type of construction has also proved to be very good.<br />
	 </div>
<div style="text-align: justify;">
	Since buildings with shear walls or confined masonry are more widespread in Chile than in other countries, the experience gathered there cannot simply be applied to other regions. Framed constructions prevail in the American Pacific Northwest Region (Oregon, Washington), for example. As for the earthquake mechanism, Chile provided a blueprint for a future quake at the Cascadia subduction zone where the Juan de Fuca plate is subducting under the North American continent from the west. Portland, Seattle and Vancouver are all about the same distance from the epicentre of a future earthquake as Santiago was from the February quake.<br />
	 </div>
<div style="text-align: justify;">
	In Christchurch, New Zealand, many residential buildings were damaged above all by collapsing chimneys. They frequently crashed through the roofs of homes, most of which were lightweight constructions. Many historical buildings of unreinforced masonry in the city centre also suffered significant damage. As in Chile, non-structural damage played a major part here, too. Unusually widespread soil liquefaction was one particular characteristic of the New Zealand quake. Near-surface sediment layers on the Canterbury Plains are particularly prone to this phenomenon, which causes extensive damage that is also difficult to repair, as the substrate settles to varying degrees during the liquefaction process, causing buildings to tilt.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Lessons for Nepal</strong></div>
<div style="text-align: justify;">
	Going by the past records, Nepal has been experiencing major quakes every 70-75 years. According to seismologists, Nepal ranks 11th among the 30 most quake prone countries in the world. In Nepal, the tectonic motion – the movement of plates in the Indian subcontinent towards Tibet – that caused the Himalayas to rise have also been causing buildings to collapse and cities get razed since the 13th century. And it is likely that Nepal would be faced with a similar situation in the near future, with Western and Central Nepal including the Kathmandu Valley the most prone to damage.<br />
	 </div>
<div style="text-align: justify;">
	The 1934 Quake, that devastated Bihar, measured 8 on the Richter scale, killing nearly 11,000 people and 20 per cent of the buildings in the valley. The National Seismological Centre of Kathmandu draws an apocalyptic version of the disaster: that it would kill more than 40,000 people and injure another 100-200,000 if it happens today. It would also destroy 60-70 per cent of the buildings and leave 60-70,000 people homeless. There is no such term as earthquake-proof as no building can be entirely safe from earthquakes. The actual term used is earthquake-resistant which means that the damage to life and property caused following an earthquake will be minimised.<br />
	 </div>
<div style="text-align: justify;">
	Establishment of the Disaster Preparedness Plan and Disaster Relief Plan makes a huge difference in earthquake-prone regions, when the catastrophes do occur as we have experienced in the two Latin American countries: Haiti and Chile. By comparing these countries to Nepal and taking a closer look at Nepal’s situation, it is evident that Nepal is in dire need of a strong mitigation plan.&nbsp;In Kathmandu Valley which is a former lake-bed, 2.5 million people live in poorly constructed buildings.&nbsp;Kathmandu has only one airport and three roads connecting it to the outside world. In the event of an earthquake, these roads are most likely to be damaged rendering them unfit for transportation. Nepal has a National Seismological Network comprising 21 short period telemetric seismic stations that started with the first seismometer set up at the top of the Phulchowki Hill, 14 km southeast of Kathmandu, in 1978. The Nepali Diaspora needs to come together and build a procedural mechanism to protect the country by setting up a Disaster Preparedness Plan, and a Disaster Relief Plan. The National Society for Earthquake Technology (NSET) - Nepal, established as a non-governmental and non-profit organisation in 1994, has been actively pursuing the earthquake risk and mitigation planning and earthquake awareness projects.<br />
	 </div>
<div style="text-align: justify;">
	Protracted political wrangling in Nepal is preventing a key piece of disaster preparedness legislation from reaching parliament. Though endorsed by the cabinet in October 2009, the National Strategy for Disaster Risk Management (NSDRM) has yet to be made into law. The passing of this bill is critical. Without this, the country’s disaster preparedness efforts cannot move forward.<br />
	 </div>
<div style="text-align: justify;">
	Development of better building codes, strict enforcement of the existing one, creation of disaster management plans and response bodies from the local level to the central must be ensured. Similarly, streamlining of relevant administrative machinery with funding, clearly demarcated jurisdiction and insurance awareness are measures that the government must take seriously. Unless these measures are taken, the cost of country’s lack of preparedness may turn out to be devastating. The right lesson to be drawn from events unfolding – a combination of righteous knowledge and righteous actions helps us for sustaining survival.</div>
<div style="text-align: justify;">
	<i>(Dr Ghosh is the CEO of National Insurance Company Ltd. This article is based on material provided from various sources including </i>Munich Re<i>)</i></div>',
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			'description' => 'Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.',
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	(int) 13 => array(
		'Article' => array(
			'id' => '260',
			'article_category_id' => '38',
			'title' => 'HR Practices & Line Managers',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	The Line Managers in organisations play an important role in the development of its employees’ professional careers and encouraging their positive attitude. The organisations have recognised the advantages of the Line Managers’ involvement in learning and development process of its employees. Yet, most organisations have not worked towards educating human resource (HR) practices to them. It is becoming increasingly important to acknowledge that the Line Managers possess the potential to help change organisational environments for the better.<strong><br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Educating HR practices to Line Managers</strong></div>
<div style="text-align: justify;">
	The Line Managers should be educated on HR policies and HR functions such as performance appraisals, training identification etc. They should have the authority to track HR activities and report the same to the Human Resource Department (HRD).&nbsp;Correspondingly, the role of the HRD should be to make the Line Managers competent by providing communication training so as to help them communicate better with their subordinates. So, close interaction between the HRD and the Line Manager and giving them the authority is vital.<br />
	 </div>
<div style="text-align: justify;">
	Further, the Line Managers should be briefed on conducting appraisals effectively. Performance appraisals must be conducted to help employees maximise their respective potential for mutual benefit.&nbsp;For this purpose, it’s imperative that the Line Managers receive behavioural and communication training.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Management Review Meetings</strong></div>
<div style="text-align: justify;">
	The organisations must give due importance to management review meetings for the Line Managers. They are an important part of educating the Line Managers as they get to hold discussions with the management boards. This process helps taking timely and appropriate actions required for organisational development.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Job Description for the Line Managers</strong></div>
<div style="text-align: justify;">
	Developing guidance is another important aspect which helps the Line Managers perform better. The HRD must make them realise the importance of the organisational team. The relations between the HRD, Line Managers and other employees must complement each other. The inclusion of HR responsibilities in the Line Managers’ job description and coordination with the HRD for the employees’ performance enhancement would help formulate effective HR related activities. A complaint mechanism also needs to be developed as it can work as the reflection for change requirement.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Counselling and Training</strong></div>
<div style="text-align: justify;">
	The Line Managers have to work closely with the employee so they must understand their human needs. For instance, an employee may be experiencing grief, tension or a personal problem. It may influence his end performance and weaken his retention prospect. In this scenario, the Line Manager’s counselling can influence the employee positively. A Line Manager’s positivity can rub on to the team and enhance its overall capability.<br />
	 </div>
<div style="text-align: justify;">
	The ability to inspire is not the easiest of qualities to develop. The Line Managers must be provided trainings, periodically, on people management and enhancing competencies of their team members. Such trainings can help them learn to be more competent to achieve common objectives.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Line Managers’ Leadership Role</strong></div>
<div style="text-align: justify;">
	Leadership plays an important role for a team to accomplish a common task. The Line Managers should lead the group of people and work towards enhancing their capabilities without getting insecure. The HR personnel cannot reach each employee most of the times. So, the Line Managers should be given adequate authority to make decisions, to a certain extent. When the Line Managers are given authority and responsibility, there is a tremendous possibility of increased productive output.<br />
	 </div>
<div style="text-align: justify;">
	The HRD should have a system which identifies the employees’ expectations from the organisations. It can then design the desired format and address it to the Line Manager.&nbsp;As a result, the Line Manager takes pride in the positive changes happening to his team members. The Line Managers play a vital role in ensuring that employees are mentored, motivated and feeling competent. The HRD can consider itself successful if employees are productive and contribute towards overall organisational growth. The employees’ successful careers within the organisation are a healthy sign of things to come. <br />
	 </div>
<div style="text-align: justify;">
	<i>(The write-up is based on an ‘HR Kurakani’ discussion on “Educating HR to the Line Managers”, on 29 December, 2010 conducted by Real Solutions Pvt Ltd. The participants at the discussion included Ayush Shah, ICTC Group; Robin Shrestha, Caritas Nepal; Sarika Amatya, Freelancer; Sharda Rana, Sipradi Trading Pvt Ltd; Shraddha Joshi, Standard Chartered Bank Nepal and Sujata Rijal, Echo Advertising Agency. Shailendra Raj Giri, the Managing Director of Real Solutions acted as the moderator for the discussion.)</i></div>',
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			'id' => '259',
			'article_category_id' => '31',
			'title' => '‘Fiat Punto And Linea Are Two Great Cars To Start Business With, In Nepal’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/rajeev.jpg" style="width: 181px; height: 265px;" vspace="2" />Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview with <i>New Business Age</i>, Kapoor talked about Fiat’s market prospects in Nepal.&nbsp;Excerpts:</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>You are launching two models of Fiat cars here. What made you choose these two specific models?</strong></div>
<div style="text-align: justify;">
	These are excellent models and unique in terms of styling, safety and low pollution. We feel that Punto gives the right size and drivability options to small families. On the other hand, Linea is a sedan that is luxurious and has a huge boot space for carrying a lot of bags. It is a very stable car and practically won every award in India. Therefore, they are two very good vehicles to start business with, in Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is your observation of the market here? Is there any target sales of these two models?</strong></div>
<div style="text-align: justify;">
	I think we should be able to get around five percent of the market share with these two cars. Then depending on how the models perform here, we can plan an official strategy on introducing other models. We hope that the affordability for buying cars in this country grows. Because it will help us sell more units and give shape to a long-term plan here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are Fiat’s passenger cars doing in the Indian market?</strong></div>
<div style="text-align: justify;">
	Fiat is doing very well in India. We sold about 23,000 units last year. The Indian market is growing at around 13 to 14 per cent every year. We also want to grow correspondingly with the Indian market this year. We are already working on a small car to be launched in 2012 end or 2013 beginning. So a lot is happening in India. The market there is becoming very competitive. However, introducing Fiat models in Nepal is a different ballgame altogether because we are not restricted to bring models only from India.&nbsp;Depending on the need, we can introduce models directly from Fiat in Italy as well if the price is right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the competition with other brands in the Nepali market?</strong></div>
<div style="text-align: justify;">
	Hyundai is dominantly the market leader in Nepal followed by Toyota and Maruti. There are a host of other brands too. Tata Motors, one of our joint venture partners in India, is also a major player here. The competition is definitely going to be there. And it’s always good to have competition as it makes us agile and focused on keeping the quality and the price parity right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the challenges you foresee for the market here?</strong></div>
<div style="text-align: justify;">
	The most glaring challenge for us is that we are a late entrant.&nbsp;Others have been selling their cars for many years now and are established players. Therefore, we need to carve a niche here. This is why we have introduced these two cars that are absolutely different in touch, feel, look and safety. We need to immediately move forward. That is why instead of only launching the car, we have first worked on strengthening the after sales aspect of it.&nbsp;We have already set up a spare parts and service centre with all the tools required. It is our effort to make sure that customers get immediate after sales service. It’s important because for us, the customers come first. So, we are launching the car after setting everything else in place. The customers can buy our cars without worrying too much about after sales service and availability of spare parts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is the market response for Fiat cars in the South Asian market compared to American and European markets?</strong></div>
<div style="text-align: justify;">
	Fiat has many established brands such as Alfa Romeo, Lancia, Maserati and Ferrari. Fiat is very strong in European markets, Brazil and even Turkey. Fiat is now venturing into China and Russia. Indian operation is already running steadily. It is also entering the US market now. A lot is happening in the automotive world. Due to the slowdown in the European, American and Japanese markets, the focus now is on countries like Brazil, Russia, India and China. So, Fiat is also eyeing these ‘action markets’.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you have any specific plans for the Nepali market?</strong></div>
<div style="text-align: justify;">
	We are reasonably focused on the Nepali market. We will be engaging ourselves in supporting our dealer here, Batas Brothers Motors, in all possible ways. We will make sure that besides the availability of spare parts and after sales service, we will make the latest models available here. We will make sure that when we plan a product, we will accordingly plan a strategy for Nepal too. I see a great future for Fiat in Nepal. This country is going to grow. As the infrastructure grows, there will be a requirement for more cars. And we want to be here and be a part of it. I can assure you that Nepal will always get the top line products here. </div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview......',
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			'id' => '274',
			'article_category_id' => '34',
			'title' => 'Financial Sector Reform Very Slow',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" height="123" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/fncci1.jpg" vspace="2" width="300" />Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID. Among the main objectives of the programme were to improve the financial standings of the two major state owned banks, Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL). The programme also looked at enhancing the institutional and supervisory capacities of the central bank.<br />
	<br />
	<div>
		Both the banks had foreigners as Chief Executives as well as part of the management teams while NRB too had foreign consultants in various positions. Speaking at a discussion programme organised by Nepal Economic Association to discuss ‘Financial Sector Reform Programme: Lessons Learnt and The Way Forward’ Dr Khatiwada observed, “Reform does not mean employing consultants, it is rather an exercise in building institutional capacities.”<br />
		 </div>
	<div>
		&nbsp;The Chief Executive Officer of Lumbini Bank, Shovan Dev Pant made a paper presentation highlighting the private sector perspective. Pant appreciated the private sector’s contribution towards the development of Nepal’s financial sector. Speaking on the occasion, Finance Secretary Rameshwor Khanal refused to accept that the financial sector reform has derailed. “However, it is progressing at a very slow pace,” he said. Citing the example of several major banks collapsing at the start of the global recession, Khanal remarked that banking has an intense domino effect when compared to other sectors.<br />
		 </div>
	Among the other speakers at the programme, former NRB Governor Bijaya Nath Bhattarai opined that the loan defaulters are the major reason for impeding reforms. Dipendra Bahadur Kshetri, also a former NRB Governor, argued that home-grown experts are competent enough to manage Nepali banks and suggested that the reform programme must be carried forward under their leadership.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID.',
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		'Article' => array(
			'id' => '273',
			'article_category_id' => '34',
			'title' => 'Multinationals Rule The Roost AtFNCCI Excellence Awards 2010',
			'sub_title' => '',
			'summary' => null,
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	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/biz news.jpg" style="width: 458px; height: 173px;" vspace="2" />Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Similarly, Unilever Nepal won the Service Excellence Award while Surya Nepal received the People’s Excellence Award. Prime Minister Jhala Nath Khanal gave away the awards to the winners amidst a special function organised by FNCCI recently.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'id' => '272',
			'article_category_id' => '40',
			'title' => 'FISCAL FACE OF NEPAL'S FEDERALISM',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<i><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/achyut  wagle.jpg" style="width: 114px; height: 147px;" vspace="2" />By Achyut Wagle</i></p>
<div style="text-align: justify;">
	Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda. The preamble of the Interim Constitution of Nepal 2007 has baptized the country as the Federal Democratic Republic Nepal. The Article 138 of the same Constitution has provided basis for restructuring the state.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Both, the constitutional and circumstantial yokes now guide Nepal, for better or worse, to perhaps irreversible journey to federalism. But, matter of factly, that is all in theory. Practically, there is a wide political space to be covered between the present unitary state to a judiciously delineated, stable yet functionally acceptable-to-all federal structure of future Nepal. Yet again, the federal Nepal is impossible to imagine without bringing the fiscal frame of federalism into forefront of the state restructuring discourse, which now seems to have obliqued by hyperboles on either side of the political debate.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Despite an euphoria of a sort to resolutely adopt a federal system, the objectives envisaged by the Interim Constitution in this particular regard appear rather slanted. The very concept incorporated in the Article 138 does not accept federalism by-and-large as an economic phenomenon. It proposed to ‘end the disparities’ of various forms, but hardly prescribes modality for prosperity and optimal use and scientific redistribution of resources. The worst proposition in the constitution is: it has authorised the government, not the Constituent Assembly (CA) to constitute the State Restructuring Commission, which is supposed to give impartial technical inputs.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	It is apparent that the federal structure of the nation cannot be finalised without technical report from the Commission, and thus, organising constitution writing process would not <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img.jpg" style="width: 367px; height: 182px;" vspace="2" />complete without the Commission and its inputs. Apart from this, the constitutional provision regarding the Commission gives more ominous than the virtuous signal. The authority given to the government to form this Commission provides an edge to the party in power to make it comfortable to itself and therefore, chances of its report being politically biased remain higher. Why was not the responsibility of constituting such a commission vested to the all powerful CA is a question unanswered so far.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Nevertheless, Nepal has no alternative to writing a new constitution, sooner or later. That new constitutional framework must embrace the federal set of polity and structures. Of all the structures, fiscal federalism will be both – defining and delineating basis of the sub-national administrative units, and also the means to ensuring justifiable (re)distribution of resources, prosperity and welfare. For all these reasons, the fiscal federalism is and should be at the centre, in all discourses related to the federal restructuring of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Essence of Federalism</strong></div>
<div style="text-align: justify;">
	Federalism is unique and in a way paradoxical concept. First, it seeks to consolidate the national unity while creating newer and larger number of sub-national units; ostensibly by divisions. Second, its objective is to recognise the social, linguistic and/or cultural identity without diluting the overall national identity. And, the third, it strives to bring the government nearer to the people that has a better sense of autonomy in deciding their own fate, but without severing its ties and dependence to the farther government – the one at the centre.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For many, federalism is merely an administrative re-mapping of the political geography of the nation. Creation of sub-national structures, that may be called state, province, prefecture or anything of the kind, seems to the prime objective of Nepal’s ongoing debate on federalism. But, how these new structures evolve and exercise the state power – mainly to meet the economic needs of the citizenry – would determine whether any nation is essentially federal or not. Nepal cannot be exception to this fundamental theoretical premise.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The functions, duties and rights of the federal unit are defined by the extent of power a unit can exercise. Its authority depends on the adoption of universally accepted models to extract power from among the – delegation, decentralisation or devolution, or combination of all of these. And, at the heart of all of these lies – the democracy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	There are very large nation-states world over with varying number of sub-regional administrative units. But, in absence of democratic dispensation, right from the grassroots, these units can only exercise very limited state authority delegated or marginally decentralised by the centre. Only power devolved by democratic exercise can only create a federal state, true to its sense.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Fiscal Federalism at the Centre</strong></div>
<div style="text-align: justify;">
	The concept of fiscal federalism, and for all practical purposes, the entire frame of federalism, is generally summed-up in three major</div>
<div style="text-align: justify;">
	<br />
	components – namely the tax-point transfers, equalisation grants and convincingly justifiable distribution of resources mainly the natural resources among the sub-national units. There are other peripheral, operational or fringe issues too. But in effect, the main three would largely incorporate them all. There are also several models of both ‘fiscal’ and ‘general’ federalism. But, they too do not necessarily go beyond these three fundamentals of federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Also, there are views against the perspective of limiting the ‘entire federalism’ to the ‘fiscal alone’ proposition. It is <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover img1.jpg" style="width: 406px; height: 461px;" vspace="2" />more apparent in Nepal’s discourse on federalism. Even the top-hats of major political parties who would be deciding the ultimate frame of Federal Nepal also tend to believe that without specific mention of issues like political inclusion, rights-based access to state and recognition of racial and ethical identities, the very purpose of federalism, at least for them, could be defeated. The level of understanding of our CA members on such technical and essentially academic issues is better not to raise here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In fact, unlike the popular beliefs, the issues of inclusion and identity are rather purely economic issues. For example, the inclusion is not sought in any abstract issues, it is rather meant to ensure inclusion in employment, benefits and other economic opportunities. Even the preservation of identity either is an economic activity in itself, or it has a cost to develop and preserve the different facets that give an identity to people and communities – like language, scriptures, rituals, customs, traditions and culture.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	These realities make it imperative that Nepal’s discourse on federalism needs an immediate and meaningful re-orientation, so as keeping the fiscal federalism at the centre of all exercises aimed at state restructuring. And, highly extensive technical and factual details and their analyses would require deciding on the size and the borders of new sub-national states. Nepal does not seem to have even initiated the process of those financial and other statistical number crunching, so far. Therefore, the claims that constitution could be written within a month ‘if’ the parties agrees are unrealistic platitudes. Expert believe that it would take at least six months of rigorous effort for a highly competent professional team to finalise the issues related to fiscal federalism – i.e. tax, distribution of natural resources and, of course, demography and geography.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In the hindsight, this is also an indication that it is impossible to complete the constitution writing by the stipulated deadline of 27 March 2011. Also, political campaigning to create new states on the basis of caste, community or even some extreme demands like ‘One Terai, One Province’ do not present potentiality for financially viable provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Technical Considerations</strong></div>
<div style="text-align: justify;">
	Financially justifiable and economically functional sub-national delineation is going to be perhaps the most challenging aspect to give Nepal a federal shape. All three major aspects – tax point transfers, equalisation grant and distribution of natural resources among the provinces – involve larger number of murkier issues than the easier ones.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Apart from these, several other components of fiscal relations between the central and sub-national governments, financial management and its processes within the state must also be decided to effectively devolve power to the people at the grassroots. Such issues may relate, but not limited to planning, economic diplomacy, money market and specialised institutions for both fiscal and financial architecture. Given Nepal’s poor governance and slanted nature of understanding about fiscal federalism even at the top-rung of political leadership, the country seems to be making ommitive than spontaneous jump to fiscal federal structure. These are some of the reasons why these issues deserve more <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img2.jpg" style="width: 342px; height: 158px;" vspace="2" />meaningful discussion, before the country could decide on the actual frame of federalism, essentially the fiscal federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Tax Point Transfers</strong></div>
<div style="text-align: justify;">
	One of the key components of federalism is the decision on the jurisdiction of major tax collection points, i.e. which sub-national government will administer or operate a particular tax point, the types of taxes a province would collect and how the collected revenue would be distributed between the centre and the state, and, sometimes among the states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In case of Nepal, the decision on the jurisdiction of tax points could face double pronged problem. First, only six customs points collect over 90 per cent of the customs revenue <i>(Table 1)</i>. And, the amount of collection at only the points that lie in two zones – Bagmati and Narayani of the Central Region, account for well above sixty per cent. The customs revenue generally accounts for 25.3 per cent of the total revenue.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Similarly, the revenue contribution of four districts is above 80 per cent and this reaches to 94 per cent if added another four districts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This situation does not only present high tax concentration in the Kathmandu Valley and the central region but also poses a serious challenge to divide the provinces so as each of them can have reasonably attractive tax collection points within their territory. It also indicates to the reality that despite adoption of federal structure, the financial dependence of the provinces could yet remain with Kathmandu. And, even worse, this economic factor cannot be drastically altered soon by a mere political decision.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In addition to deciding on the tax point jurisdiction, decision on the kind of taxes that provinces can impose and the taxes that would directly go to central accounts is also going to be a difficult one. Generally, property and service taxes are levied by the local bodies, sales and value added taxes go to the provincial government and customs and income taxes go to the central government accounts. This assumption appears suitable in the case of Nepal too, as our vertical administration is accordingly stratified in three tiers.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Equalisation Grants</strong></div>
<div style="text-align: justify;">
	Despite tall asks of autonomous and semi-autonomous provinces on different bases, the fiscal and financial fundamentals do not support the possibility of creating such states. The basis of autonomy is the abundance of physical and financial resources available within any given political unit. As evident in the tax collection patterns, the revenue resource does not support such an ‘autonomous state’ except the one created at the centre, incorporating Kathmandu.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Until the state-to-be-created in the federal set-up are capable of mobilising their own resources, the equalisation grant, the money given by the centre, will be the most dependable source to finance the development and public delivery of goods in the provinces. Even on this count, our debate on federalism seems unduly titled to political considerations alone. In the most ideal cases of revenue and grant sources of funds, dependence to centre remains pretty high. For example, the provinces of Switzerland are entitled to keep 50 per cent of the revenue collected and Canadian ones can hold up 47 per cent of it. These are the highest rates of centre-province revenue sharing the world over. In this light, the ‘autonomous’ state advocated in Nepal appears pure farce.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	But, in our case, the ‘sustainability’ or ‘survival’ side of the new states has never been debated thoroughly as the issue deserved. There are also demands of creating separate provinces like ‘Karnali’. One could easily imagine the level of would-be financial dependence of such states to the centre. Such scenario implicitly infer that centre must once again remain strong as it will have to continuously dole out money to so called autonomous provinces, and, it in turn, has to be strong in effect to gather enough amount of resources to be able to meet the needs of all these new ‘baby’ states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Natural Resources</strong></div>
<div style="text-align: justify;">
	The distribution of natural resources among the new provinces is another difficult and unavoidable task on effecting federalism. There are several examples of serious disputes between the provinces regarding the rights to use such resources. The Kaveri and Narmada river disputes in India are classic examples to it.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In Nepal, water, forest, mines and minerals and land (mainly cultivable) are considered major natural resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For us, one advantage of this resource vis-a-vis federal imperatives is that, it is fairly evenly distributed given that we agree to justifiably allocate them to generally acceptable size and number of states; say five to nine.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Recently, some campaigns misinterpreting the international instruments like ILO Article 169 have compounded the problem. But, lately the people involved in the indigenous rights movements themselves are becoming somehow disillusioned to deliberate misleading campaigns of yesteryears. However, natural resources will still remain a major basis of re-delineation and the process will surely be difficult.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Other Issues</strong></div>
<div style="text-align: justify;">
	There are several other issues which have to come to the forefront in the discourse on federalism. They include, whether a province should have authority to carry its own economic diplomacy to accept or endow financial assistance from and to international community; whether it can have its own finance bill; or would it have own supervisory and regulatory authorities independent of central oversight or would they just function as extended line agencies, etc. Equally complex is the issue of large infrastructure projects, their management, ownership and return – if any.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Unfortunately, Nepal as the country as a whole, and CA in particular as the only responsible constitutional organ to debate all these provisions to include in the new constitution, have remained far short of initiating meaningful deliberations. Whatsoever, Nepal in executing the federal structure must ensure unfringeable private property rights universally in all the states, freedom to movement of products and services as well as people, unhindered trade and business transactions between the states and uniform (underently different) tax structure, among others. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Article 138 of the Interim Constitution</div>
<div style="text-align: justify;">
	138. <b>Progressive restructuring of the State: </b></div>
<div style="text-align: justify;">
	(1) <span>&nbsp;&nbsp; There shall be made progressive restructuring of the State with inclusive, democratic federal system of governance, by doing away with the centralized and unitary structure of the State so as to end discriminations based on class, caste, language, gender, culture, religion and region.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(1a)&nbsp;Recognizing the desire of the indigenous peoples and of the people of backward and other area including Madhesi people towards autonomous provinces Nepal shall be a federal democratic republican state. Provinces shall be autonomous and vested with full authority. The boundaries, number, names and structures, as well as full details of the lists, of autonomous provinces and the center and allocation of means, resources and powers shall be determined by the Constituent Assembly, while maintaining the sovereignty, unity and integrity of Nepal.</div>
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	 </div>
<div style="text-align: justify;">
	(2) &nbsp;There shall be constituted a high level commission to make suggestions on the restructuring of the State as referred to in Clauses (1) and (1a)&nbsp;The composition, function, duty, power and condition of service of such commission shall be as determined by the Government of Nepal.</div>
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	 </div>
<div style="text-align: justify;">
	(3) <span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The final settlement on the matters relating to the restructuring of the State and the form of federal system of governance shall be as determined by the Constituent Assembly.</span></div>',
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			'description' => 'Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda.',
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			'id' => '271',
			'article_category_id' => '40',
			'title' => 'Bases For Fiscal Federalism',
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			'content' => '<div style="text-align: justify;">
	The following article represents Dr Devendra Raj Panday’s research-based paper presented at a symposium titled “Fiscal Federalism in Nepal” in August 2009 in Kathmandu. The extract is printed here with his consent.</div>
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	 </div>
<div style="text-align: justify;">
	The studies on fiscal and financial federalism concentrate on how financial and monetary institutions’ functions might be arranged and a mechanism for coherent policy making and monitoring established for the state to produce expected outputs. It involves the assigning of spending, taxing and borrowing powers between the centre and the other tiers of government and the focus of responsibility and accountability in fiscal management. In many ways, it is an act of political decision and bargaining – in the course of finalising the constitution and making yearly decisions especially on taxation, revenue sharing and allocation of grants by the centre for various purposes. In all this, efficiency and equity, often in conflict with each other, become issues of major concern. In order to do the needful, the national economy has to run efficiently, produce growth and provide stability that is necessary for broader development. At the same time, the aggregate growth must not create or sustain imbalances, vertically and horizontally. It means that further continuation of centre within the periphery syndromes in governance is not acceptable from both economic and political standpoints. The discrepancies in economic and social status of various regional or provincial economies must be narrowed down with the ‘marginal benefits’ of growth going disproportionately to the disadvantaged and economically and socially excluded people across the country. There are several ways in which fiscal efficiency balanced well with equity considerations can be pursued.</div>
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	 </div>
<div style="text-align: justify;">
	First, allowing ‘independent fiscal regime’ for the provinces should not dilute the common market character of the federation. Simultaneously, it should also be kept in mind that the free flow of goods and services and investment across the provinces can result in favour of better-equipped regions that may already be relatively better off than others. In theory, there should be economic convergence of different regions under free trade with the mobility of factors as well as goods and services. But we know from Nepal’s experience as a player in the international economy as to how difficult it is for a least developed country (or a region within a country) to compete with better endowed, resourceful and experienced economies. Less developed provinces in the federation deserve the same treatment politically, economically and morally as historically, Nepal as a least developed nation has demanded internationally, including in SAARC mechanisms.</div>
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	 </div>
<div style="text-align: justify;">
	Second, there has to be an understanding and a political consensus on the degree of competition and the spirit of cooperation to be pursued among the constituent units of the federation. The neo-liberal economic approaches sometimes display contradictory positions in this respect. On the one hand, there is the market preservation argument which expects the federation to work in harmony and have the states produce and trade goods without any barriers that would endanger the national market’s efficient working. On the other, there is a view that there should be constitutional guarantees against regulating inter-state flow of goods and services, to perhaps avoid the kind of situation in India where there is no harmony in some taxes levied in the states and on their policies concerning inter-state movement of goods and services. Meanwhile, the liberal ideology also illustrates the idea of ‘competitive governments’ and argues that the states must compete with one another in providing incentives to attract mobile capital and other factors into their territory to punish the laggards. The preference for competitive federalism where the states may compete among themselves to maximise their own welfare at the cost of other provinces may reflect the ‘beggar thy neighbour’ strategy of yesteryears. This is a critical point since, like in the overall design of economic liberalisation, only the relatively prosperous states would benefit from competitive economic and fiscal policies. In post-1990 India where the states are encouraged to compete with each other for attracting investments into their territory, some states have done well, but at the cost of growing inter-state disparities and regional imbalances. Nepal can ill afford a similar practice. It would also run counter to the social objective of federalism which is to reduce disparities and imbalances, not to increase them. Once again, purposeful pragmatism calls for an approach that would optimise people’s welfare at the provincial and local levels and encourage entrepreneurship and investment all around without the states jeopardising each other’s interests and the overall interest of the national economy.</div>
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	 </div>
<div style="text-align: justify;">
	Third, in the practical task of expenditure and revenue assignment, efficiency consideration is implicit in the widely held opinion that before considering taxation, assignment of expenditures among different tiers of government should be taken care of. The idea in this ‘money to follow work’ principle is that taxation and borrowing powers of the states and assumedly, the centre’s should not be independent of specific obligations they undertake for discharging public functions and the volume of expenditures required for that purpose. The idea is to ensure that all states are empowered to provide comparable public services regardless of their revenue capacities. Beyond this, the expenditure assignment is expected to be guided by economic considerations whereby the central as well as provincial and local governments provide services whose benefits accrue to the residents within its jurisdiction and where the costs of the provisions incurred can be internalised within that jurisdiction. To put it simply, the responsibility for the provision – where the benefits from a given service are distributed nation-wide such as the country’s defence, the Supreme Court or the national highway system – lies with the centre. If the benefit incidence of a given service is limited to primary and secondary education or water supply and sanitation, the provision is best readied by provincial and local governments. The opportunity to save on transaction costs and the possibility of harnessing the economy of scale in fiscal operations are associated elements of the process.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fourth, in a developing country where both the expectations and the requirements of the people are high, assigning expenditures for the centre and the constituent states does not only mean slicing the existing budget into central and provincial items of expenditure and dividing tax revenue accordingly. It also means taking into account the responsibilities to deliver services that the people could not have earlier. It also means undertaking various development works for generating social goods that can be provided or ensured to finance them. The challenge will arise from policy matters and in the pursuit of related priorities. For agriculture, education and health among others, the centre may wish to promote certain norms and targets considered desirable from the national viewpoint. The states in charge of these assignments can have different ideas especially if the same political party or the coalition of parties is not in charge at the centre and specific states. The centre will have other concerns including those that are part of its international commitments. Such commitments can be about trade and environment as they can be about national and international human rights standards concerning the status of women, children, indigenous people etc. And there are commitments about Millennium Development Goals (MDGs) with further complications arising from the possibility that many of the related functions will come under the purview of provincial governments. Consequently, expenditure assignment also becomes responsibility and accountability assignment against which the availability of matching revenue needs to be guaranteed. The centre has an obligation to address these issues as it negotiates the tax sharing arrangements and, particularly, the conditional and unconditional grants’ transfers from the centre to the provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fifth, there are four areas of concern that should guide the process on taxation. One, every jurisdiction needs adequate tax revenue to finance the assigned and necessary expenditures. To make up for the shortfall in one jurisdiction, the better endowed among others should have the incentive to engage in revenue sharing. Two, efficiency consideration will be as important in the assignment of taxing power as in spending, more so due to its direct impact on the working of the common market. The incentives and disincentives in the tax structure on a given jurisdiction, especially for the mobile factors and the consumers of public services are critical. Taxation assignment requires appropriate study of tax bases, possible overlapping of incidence, the spill-over effects and the population that stands to benefit from the spending facilitated by such taxes. Three, the distribution of taxing authority among the different tiers of government has a significant bearing on equity. The residence based taxes on income and property may be appropriate for the provincial and local governments, but any tax with significant redistributive power, such as progressive income tax becomes suitable only for the national government to enforce national priorities on equity and broader development. Four, administrative efficiency including transaction cost considerations will also guide the assignment of taxing power. On this basis, some taxes become suitable even for sub-provincial or local governments for eventual sharing vertically where local conditions and administrative set up can help administer it better.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sixth, apart from the question of specific taxes to be assigned to the centre and the provinces, a decision about the collecting agency is also important. Some taxes available for meeting public expenditures may be collected and used by only one jurisdiction. One such example could be the property tax levied and collected by local governments. Such tax base can also be shared between the local and provincial governments. Some taxes may be collected in one jurisdiction and used by all. For example, income tax can be collected by the centre and shared with others. In all these cases, the tax base, its incidence and the administrative cost of collection will be important considerations. From a political perspective, the perceived or pursued autonomy of the provinces vis-a-vis the centre will play its part. There is a potential conflict in the way one asserts ‘states power’ and the compromises needed in the interest of efficiency as well as equity in the interest of national bonding.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Seventh, as in Nepal’s case of federalism by ‘devolution’ and not ‘aggregation’, the central government retains its basic strength and power which applies to fiscal arrangements too. The centre must have absolute power to collect taxes from the domains of individual provinces and use the funds collected to meet expenditures it deems important across the country. In almost all the important federal countries, the share of the central government in total public revenue (collected by the centre, the provinces and the local governments) is above 50 per cent. In Nepal, the economic reality – the likely wide variations in the economic status and revenue bases of different regions and the social imperative of redistribution – will undoubtedly vest the centre with considerable authority and responsibility in this respect.</div>
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	 </div>
<div style="text-align: justify;">
	Finally, besides redistribution, it is critical that the central government be adequately empowered to undertake stabilisation functions, on the one hand, and monitor the economic and distribution effects of inter-jurisdiction competition, on the other. It is prudent and practical to let the centre have exclusive authority over stabilisation function and use its power of the purse in a way where the provincial governments have an incentive to follow the national priorities even as they are bound to come into conflict with priorities established by them in their provincial interests.</div>
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	 </div>
<div style="text-align: justify;">
	<i>(Dr Panday retired from government service as Secretary of Finance and became the Finance Minister in the first government formed after the restoration of democracy in 1991.)</i></div>',
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			'article_category_id' => '40',
			'title' => '‘We Need A Strong Central Government With Fiscal Redistribution Power’',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Ram Sharan Mahat.jpg" style="width: 192px; height: 217px;" vspace="2" />Dr Ram Sharan Mahat</b></div>
<div style="text-align: justify;">
	Former Finance Minister</div>
<div style="text-align: justify;">
	The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How would mobilisation of resources take place under the federal structure?</strong></div>
<div style="text-align: justify;">
	Mobilisation of resources is imperative to run the government irrespective of whether there is a federal structure or not. Under the federal structure, there will be governments both at the central and provincial levels. Therefore, resources will be mobilised at both ends. Apart from the revenue sources under their respective jurisdictions listed in the constitution, there will be a concurrent list of revenue sources imposed at both levels. In federal countries, the centre as well as the provinces impose taxes and duties such as income tax and excise duty which raises the burden on the taxpayers. Duties are normally collected by the centre at a single point for administrative convenience but shared at both levels. In addition to the central tax, the provinces piggyback to a certain extent, however, remaining within limits defined by the respective framework legislation. For example, if the central income tax is 25 per cent, the province may add another 5 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The source of revenue in Nepal at present are centralised in a few districts. Under such situation, how can fiscal balance be maintained when Nepal becomes federal?</strong></div>
<div style="text-align: justify;">
	This is definitely a big challenge. The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run. People think that once they have a separate province, they will have all the autonomy and freedom. But if the province has no resource of its own and depends on the central allocation even for day-to-day administration, the autonomy has no meaning. Therefore, one has to be very careful while carving out the provinces. The decision should also be based on long term viability and economic sustainability of the regions, in addition to other considerations. Unfortunately, at present the most vocal demand relates to provinces based on ethnicities.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of regional disparity due to unequal distribution of resources and sources of revenue?</strong></div>
<div style="text-align: justify;">
	The common fallacy among the ardent federalists in Nepal is that regional disparity will be narrowed and poverty banished once there is a federal structure. This is wrong. Resources and development potential are unequally distributed and so are the revenue sources. Competition among provinces with differing resource endowments could accentuate regional disparities instead of narrowing down unless there is intervention from the centre. For this, the centre must be strong with redistributive power. In the USA, there are serious regional disparities. West Virginia’s per capita income is less than half of Connecticut’s. In India, Haryana’s per capita income compared to UP and Bihar is three to five times higher. Please note that India is not the perfect example of a federal structure. India, at best, can be regarded as a quasi federation with a strong centre. So, this situation in India is despite central intervention.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should federal Nepal’s fiscal policy focus on to ensure appropriate and equal distribution of resources among the provinces?</strong></div>
<div style="text-align: justify;">
	There is no alternative to a strong central government with fiscal redistribution power to ensure equity and economic justice. All provinces should have uniform access to basic services like education, health, electricity, roads and other socio-economic services. For this to happen, poorer provinces will need central support through a mechanism called Equalization Fund. A fiscal mechanism to ensure transfer of resources from rich to poor provinces is necessary. It is precisely for this and other reasons that revenue from major sources like customs, income tax, and partially VAT and excise must go to the centre. If you look at Nepal’s case at present, these sources practically yield no revenue. If they are brought under provincial jurisdiction, most federal units will have no income at all.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t there been a meaningful debate on state restructuring and the form of federal system?</strong></div>
<p style="text-align: justify;">
	It is not that there are no debates taking place. But generally speaking, the focus has largely been on ethnic lines rather than on long term sustainability and from development perspective. Most people have a vague idea about federalism and what it will deliver. State restructuring is not just about the country’s division into federal units. It is more than that – such as ensuring people’s empowerment at the basic level. Democracy is after all the empowerment of individuals, beyond communities and societies. It could be ensured with strong decentralisation but there has hardly been any debate on that.</p>',
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			'description' => 'he provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces.',
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			'id' => '269',
			'article_category_id' => '40',
			'title' => '‘We Must Have Small Number Of States For Financial Feasibility’',
			'sub_title' => '',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bijaya Nath Bhattarai.jpg" style="width: 153px; height: 173px;" vspace="2" />Bijaya Nath Bhattarai</b></div>
<div style="text-align: justify;">
	Former Governor, Nepal Rastra Bank</div>
<div style="text-align: justify;">
	The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the monetary aspect of federal Nepal?</strong></div>
<div style="text-align: justify;">
	Nepal Rastra Bank (NRB) is the authority for all monetary issues in Nepal. NRB has its branches and sub branches spread all over the country. It not only works as a fiscal agent but also facilitates commercial banks through operating currency chests. It regulates the money supply, flow of liquidity and supervises and regulates banks and financial institutions. In the federal structure too, the currency in use will be the same and there will be a solitary central bank which will be responsible for providing all central banking functions to every state in the country. There won’t be separate currencies for individual states. But all monetary issues should be controlled by a central regulator i.e. Nepal Rastra Bank.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>In a federal structure, the state revenue, expenditure and debts will have to be shared between central and local governments. How practically feasible will this be for Nepal?</strong></div>
<div style="text-align: justify;">
	As far as I know, the countries with federal structure have different forms of taxation. Some are levied by the central government while some others are at the states and municipal levels. There are three types of taxation. The municipal taxes would be the income of the particular municipality. Similarly, state taxes would be the revenue of the states. The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley. Then come the Terai hubs namely Bhairahawa, Biratnagar, Birgunj and Nepalgunj followed by towns like Pokhara and Hetauda. The economic activities in other areas are minimal. Therefore, resource mobilisation and sharing will be difficult proposition for federal Nepal. On the question of debt management, there needs to be an agreement on issuance of debt, use of debt and final repayment of debt. Most of the country’s debt issuance and repayment is at the central government level.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The rising recurrent cost is already eating up the country’s revenue generation capacity. With governments at the provincial levels, the overall administrative and recurrent public expenditure is likely to shoot up with no commensurate growth in revenue. Wouldn’t this be an alarming situation?</strong></div>
<div style="text-align: justify;">
	Resources remaining after fulfilling the recurrent expenditure are used in development activities. This is supplemented by the resources and means obtained from foreign aid and loans for development activities. The resources thus mobilised would be further divided in the federal system. Then there would be chances for even less resources and means left for development projects. The revenue grows along with the economic development of the country. If the country under federal system moves ahead and develops economically, the national income will grow. We can take Switzerland as an example where the per capita income is around US$ 34,000. But our country’s situation is such that federal structure can actually lead to resource crunch. The far western region, especially Karnali, is least developed. There are other under developed regions too where the conflict had escalated due to unequal distribution of income and resources. In such areas, the resources injected have to be comparatively higher. This would leave very little resources at the centre’s disposal. It would be ideal to have a small number of states and small state structures. Only then will we be able to mobilise resources effectively. At present, I see a faint possibility of introducing new forms of taxation for increasing resources. During the past decade or so, there have been very few new investments. Even now, the investment environment is gloomy for domestic as well as foreign investors. Foreign aid and internal resources mobilised by the state have not been effectively utilised. As a result, there is a liquidity crisis in the financial sector. The government has not been able to address budgetary issues well. There is fiscal imprudence which is reflected by large non-budgetary expense at the central level. It will be necessary to maintain strict fiscal discipline in a federal system. The non-budgetary expense has to be lowered to a minimum. If we can do that and utilise resources effectively for development, the situation may improve over the years as the economy will then grow. However, the current resource distribution pattern could invite complications.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we decrease current expenses so that more resources can be allocated in development activities?</strong></div>
<div style="text-align: justify;">
	We have very limited resources. So, when we want to divide them among the centre and the states, there could be complications. While making a transition to the federal structure, we should make sure that the structure envisioned by the constitution is small and dynamic. For example, there are more than 600 representatives in our existing Constituent Assembly. This number is massive given the size of our country. Compare this figure with our neighbouring country India which has 552 members in its lower house of parliament. It is said that our federal parliament will follow a bicameral system, for greater representation of every region. The number of representatives should be brought down significantly from the present one to ensure low governance costs. Also the size of the provincial government must be small and effective. If this is not ensured, very little resources would be left for development activities after dividing them among central and regional governments.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There has been no real debate on the economics of Nepal’s federal structure. Given this, how can we be definite about the direction we are heading?</strong></div>
<div style="text-align: justify;">
	I agree that there must be a serious debate on this issue. The statesmen and the CA too have not discussed fiscal federalism seriously. Major issues such as the availability of resources and means and the model of federal structure must be discussed now. I personally feel that without serious debates, going for federalism might backfire on the country in the long run. Nepal has limited resources. Therefore, the demarcation of states based on ethnicity could prove to be a dangerous proposition. It will definitely promote ethnic conflict among our own people. And we definitely don’t want Nepal to follow the example of Yugoslavia. The states must be divided based on economic reality.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What reforms do you think are required once we go federal?</strong></div>
<div style="text-align: justify;">
	Well, there are a lot of things that need to be reformed. Our GDP and tax ratio are lower compared to many countries. We can look at increasing tax compliance. In the recent past, media has reported tax evasion by big business houses. All citizens must feel that paying taxes is their duty and it should not be evaded. Greater tax generation will enable the state to mobilise adequate resources for development and social causes. Nepal has started providing social security allowances for elderly people. In the coming days, the state can offer free medicines and health services to the economically deprived people. For that, a sense of responsibility in people must develop to ensure tax compliance. If the government can take the role of a facilitator and focus its investment in infrastructure, Nepal can experience a prosperous economic development. The problems that we face today are that of infrastructure, labour relations and power. As per reports, around 200 small industries have closed shop owing to power shortage. Similarly, many industries have experienced decline in output due to labour unrest. The political parties must unite for national and development issues irrespective of their ideological differences.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being one of the poorest countries in the world where there is little revenue left for development after incurring current expenditures, can we afford a federal form of government?</strong></div>
<p style="text-align: justify;">
	If we see economically, it is very difficult due to the resource constraints. As and when we enter the federal structure, it will be necessary to differentiate federal and state taxes. Let’s take the example of the USA where the sales taxes are collected by the states. Similarly, the municipal and income taxes are collected, respectively, by the municipalities and the federal government. Our main sources of revenue are VAT, customs duties and income tax. The land tax, rental tax and other smaller taxes are collected by the municipalities. I think the problem in Nepal arises due to centralisation. The rights must be decentralised. If small structure and decentralisation of rights can be ensured, there is no need to create new states in the name of federalism. There are districts where there have been no economic and development activities. We have seen in the past also that the situation of conflict was invited by economic inequality. This inequality is due to the imbalance in economic opportunities for different regions and the failure of implementing economic development plans. The mid western and far western regions are the most backward regions of the country. Despite huge potential, Karnali region remains grossly underdeveloped. If the planners in the past had successfully taken the decentralising path, the people wouldn’t have been left dissatisfied. This happened due to huge economic disparity between the various regions. An economically decentralised country holds more promise than a&nbsp; federal structure.</p>',
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		'Article' => array(
			'id' => '268',
			'article_category_id' => '40',
			'title' => '‘Development In One Region Should Complement Development In Another’',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Pitamber Sharma.jpg" style="width: 163px; height: 182px;" vspace="2" />Dr Pitamber Sharma</b></div>
<div style="text-align: justify;">
	Geographer and Regional Planner</div>
<div style="text-align: justify;">
	There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The interim constitution says that the states, once created, must be autonomous. To ensure such autonomy also in the economic field, the states must have ample resources. How do you see the feasibility of such economic autonomy of the proposed states?</strong></div>
<div style="text-align: justify;">
	Being self-reliant will depend on the number of states and the criteria on which they will be created. In Nepal, autonomy is interpreted only in the political sense. It is often forgotten that political autonomy remains circumscribed in the lack of economic autonomy. If a state or province has to rely on the centre for all its development needs, how can it exercise autonomy in political or economic decision-making? All states may not have all the resources. However, care should be taken that each state is carved, as much as possible, in a way that it has at least some basic resources to complement its development efforts. There are 14 states proposed by the Constituent Assembly’s state restructuring committee. Many of these proposed states are simply not viable economically or politically. I believe that in Nepal we still have enough scope to design states as planning units. The foresight we show today will make it easier to deal with the problems of tomorrow.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the appropriate geographical delineation for distribution of natural resources among the new states?</strong></div>
<div style="text-align: justify;">
	Nepal is a country with enormous geographical and topographical diversity. This diversity in many ways has determined the type and distribution of natural resources. The Terai plain as well as the Inner Terai are rich in agricultural resources. This area also has a unique wildlife. Similarly, the hills and mountains are rich in biodiversity resources, hydro power, nature- and culture-based tourism resources etc. The element that links and complements the geographical diversity between the hills and the plains is the hydrological system – the major river basins of Nepal. There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources. However, we do not live in an ideal world. While natural resource endowment is important, equally important are the historic aspirations of the diverse communities that inhabit the different regions. These aspirations also need to be addressed in the formation of states. Nepal’s move from a unitary state to a federal one is dictated in many ways by these aspirations.<span>&nbsp;&nbsp; <br />
	<br />
	</span></div>
<div style="text-align: justify;">
	In a country like Nepal, the crux of the issue of federalisation is that the development in one geographical and resource region has to complement the development of another region. That is the basis on which the resources need to be considered in designing federal states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some political parties are strongly raising the demand for states based on ethnicities. How challenging will it be to manage and distribute the resources along these lines instead of geography- and resource-based states?</strong></div>
<div style="text-align: justify;">
	The political discourse on federalisation in Nepal has been dominated primarily by the issue of ethnicity. Not much attention has been paid to the attributes of an ethnic state, or even what comprises an ethnic state. Some people are scared of the word ethnicity altogether. The reality is that ethnicity makes a significant difference in the lives of people.&nbsp;Nepal has 100 designated ethnic groups according to the 2001 census. And there are 92 languages spoken in the country. Major ethnic/caste groups in Nepal have their territories of traditional habitation. The groups have settled continuously, are relatively concentrated, and have a significant and dominant, if not majority presence in particular areas. This is true for all large and small aadibasi and janajati groups and the Chhetris. However, the dalits do not have their own distinguished geographical territory or a separate identity by virtue of language.&nbsp;This is in spite of the fact that they comprise the third largest ethnic/caste group and the most marginalised population in Nepal.<br />
	 </div>
<div style="text-align: justify;">
	If all major ethnic groups in Nepal were to have their own states, it would be an enormous challenge to manage and distribute natural resources. Ethnic boundaries rarely coincide with resource boundaries. Even macro watershed would be divided among different ethnic domains. All hydropower resources would be in the domain of hill/mountain ethnic groups, with none in the Terai. The capacity of ethnic states to deal with the issues of mitigation and adaptation to climate change would be extremely limited. It is because this would require a coordinated watershed level response.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think that the redistribution of resources may ignite resource conflict after the formation of new federal states?</strong></div>
<div style="text-align: justify;">
	As I have mentioned earlier, much would depend on the criteria used in the designation of states, and of course the number of states created. The experience of other countries show that conflicts over control, regulation, use, benefit and maintenance of resources, particularly water, are among the common conflicts resulting from federalisation. Constitutional provisions are therefore made for arbitration and resolution of such conflicts. (Highlight.) The redistribution of resources is ensured mainly through inter-governmental transfers. However, to assure that the central government has enough resources to offset imbalances between the states, some clarity is required with respect to the share of local/state revenue going to the central treasury.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, you think the 14 states proposed by the CA’s State Restructuring Committee is not practical?</strong></div>
<div style="text-align: justify;">
	The idea of 14 states proposed in the draft report of the Constituent Assembly’s State Restructuring Committee, in my view, is neither rational nor appropriate. For a country of Nepal’s size, 14 states will be too many.&nbsp;If ethnicity is the only criteria considered for the designation of states, I see no justification for at least four of the proposed states.&nbsp;Jadan has a population of 50,000 while Bhotes comprise only 1.2 per cent of Nepal’s population. Sherpas total only 90,000 people and a mere 21 percent of Nepal’s total Sherpa population live in the proposed state. Additionally, Sunkoshi and Narayani have as mixed a population as any other ethnic state. One of the major problems with the report is that it does not lay down any principles for states’ formation. For example, when does an ethnic group merit the status of a state as opposed to an autonomous region within a state?<span>&nbsp;&nbsp; The report does not provide answers to these kinds of questions.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Running and maintaining the state affairs is a costly proposition. How would the states help in mobilising resources for the nation while meeting their own recurring costs?</strong></div>
<div style="text-align: justify;">
	At present, only nine among the 75 districts are in a position to generate revenues that go beyond meeting their recurrent expenditures. In other words, if all the proposed states of Nepal are to be in a position of meeting their recurrent expenditures and generate a surplus, it is basically from the revenue from these nine districts that will have to be somehow apportioned among the states. As I said earlier, inter-governmental transfers will have to play the key role in maintaining the financial viability of the states. Inter-governmental transfers should ensure that (a) all expenditure assignments of the states can be met through these grants and (b) that it should also provide the basis for basic long-term investments required for mobilising resources. In Nepal’s case, for example, the states falling under the current mid and far-western regions will need massive investments from the centre for at least 10 to 15 years, by which time they could be self-sustaining. Investments by the centre on key infrastructures in the state will remain crucial. One of the problems that the state governments in poorer states will have to face is the flight of capital as capital flies out from low-yielding states to high-yielding states. A situation can easily arise where the poor states become poorer while the rich ones become richer. This will emerge as a big challenge in the management of federalism. The success of the federalism enterprise may as well lie in the extent to which they are enabled to mobilise resources.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What may the reason that there is no meaningful debate taking place on state restructuring and the form of federal system?</strong></div>
<div style="text-align: justify;">
	The political parties are ignoring the most critical and operational issues of federalism. It was Maoists who raised the issue of the federal republic and turned it into a national agenda, and they did it right. The rationale for the federal republic was to break, once and for all, the shackles of a feudal, overtly centralised, monarchic, predatory state. This was a historic achievement. For the first time in nearly two-and-a-half centuries, it set the stage for redefining and reimagining Nepal. But the Maoist perception went astray because of taking ethnicity as the sole basis for federalisation. As a result, the question of resources, development and meaningful devolution of power remained ignored. The two other major political parties – the UML and the Nepali Congress – are still taking time to fully own the idea of a federal Nepal.&nbsp;It is evident from their reactive approach to the whole issue, so much so that their official positions are not yet clear. The Madhes based political parties too made the federal agenda their main political plank. But they only took it as far as it challenged the colonial flavour of the policies of the hill-centred Nepali state vis-a-vis the Madhes. The ‘one Madhes, one state’ slogan was raised as a vehicle for economically circumscribing the hills and making it a hostage of the Madhes, however defined. The ethnic dimension is critical and important but no less important is the issue of dealing with poverty, exclusion, and in a fundamental sense, the mode and meaning of development. The two issues are no doubt linked but one cannot be a substitute for the other.<br />
	 </div>
<div style="text-align: justify;">
	Thus the debate has centred on issues of identity and emotion rather than the more substantive issues of strategy and resources for development. I believe that once the dust settles and the states come into being, development will once again emerge as the agenda around which politics will revolve.<span>&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should be the main objective of federalism in Nepal’s context?</strong></div>
<div style="text-align: justify;">
	The objective of federalism in Nepal should be the creation of a prosperous country which will benefit all, irrespective of ethnicity, caste or class. The rational for federalism in Nepal has to rest on three premises. The first is the recognition of the ethnic, linguistic, cultural and regional identity and aspirations of the diverse population groups that inhabit Nepal. For over two centuries, the Nepali speaking, upper caste hill dwellers following the Hindu faith namely Bahun and Chhetri enjoyed the privileged patronage of the Nepali state.&nbsp;Shared ownership of the state requires that progressive ethnic, cultural and regional identities are given due recognition. The second is to facilitate rapid, equitable and inclusive development so that livelihoods of all, and particularly of the vulnerable, marginalised and disadvantaged groups, can be rapidly improved. This requires that adequate attention is paid to natural and human resources that can provide the basis for equitable and inclusive development. The third is to decentralise and devolve power to the lowest possible level so that the roots of a truly participatory and accountable democracy are strengthened.</div>
<p style="text-align: justify;">
	Two concepts, I believe, can help us move towards a federalisation that takes identity, inclusive development and devolution as the point of departure.&nbsp;The first is the concept of ethnic/caste groups that have suffered from historic discrimination and have a dominant presence in geographically adjacent and contiguous areas. The second is the concept of special autonomous areas. Following the first concept, federal units can be formed around a few major ethnic/caste/language group habitats that have historically remained in adjacent or contiguous areas, and have developed a sense of ethnic affinity over time. Such federal units can incorporate areas with existing or potentially sustainable natural resource as well as economic base. Following the second concept, special autonomous areas can be designated within federal units with particular ethnic/caste dominance.</p>',
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	(int) 7 => array(
		'Article' => array(
			'id' => '267',
			'article_category_id' => '40',
			'title' => '‘Political Parties Must Honour The Constitutional Provision And Form State Restructuring Committee',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Prakash Chandra Lohani.jpg" style="width: 162px; height: 180px;" vspace="2" />Dr Prakash Chandra Lohani</b></div>
<div style="text-align: justify;">
	Former Foreign and Finance Minister and Co-Chairman of Rastriya Janashakti Party</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The state restructuring committee has not been formed yet. What are the reasons behind it?</strong></div>
<div style="text-align: justify;">
	It is clearly specified in the interim constitution that we should have a state restructuring committee. So, it is the responsibility of the government as well as of the political parties to ensure that the state restructuring committee is formed. The government as well as the major political parties have not fulfilled this responsibility. In fact, the state restructuring committee should have been formed while the Constituent Assembly was in its first session. The fact that this has not been done as yet is a reminder of our negligence towards the constitutional provision. I think when Pushpa Kamal Dahal was the prime minister, he tried to form it. He nominated Dr Ganesh Gurung to head it but the parties concerned were not able to agree with the names of other members. So, the body formed with Dr Gurung as its head did not take the full shape. It became a one-man defunct body. After Dahal left, Madhav Kumar Nepal took over the reins. At that time also, smaller parties like ours have been constantly telling the bigger parties to meet this constitutional provision.<br />
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it. When madhav Nepal was the Prime Minister, I don’t know if he ever tried to push this process forward. Most of the time, his government and the Maoists were at loggerheads with each other. There was no real initiative to draft the constitution. They spent their energy in the struggle for power. That is the reason why the state restructuring commission has not been formed yet. In fact, it was not an agenda of priority for the Maoists, Nepali Congress and the UML.<br />
	 </div>
<div style="text-align: justify;">
	They simply ignored this issue. Now, after the year-long extension of the Constituent Asembly, normally one would expect them to try and form this committee. However, they have ignored this again and we are now left with only two-and-a-half months from the deadline for promulgating the constitution. And still there is no seriousness about satisfying this constitutional provision. This is a sad story, to say the least. Now, the Maoists are saying that it doesn’t make any sense to form the state restructuring commission because the thematic committee working on state restructuring has already come out with its report. But what we have been saying is that this is a constitutional provision. If this provision has to be ignored, then people must prepare a proposal, make a constitutional amendment, take it to the parliament and remove this article from the constitution. As long as this article is there, we have to make sure that we honour it. I am sure this is an issue that will come up in our subcommittee meeting soon.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, it would not be possible to go ahead with the state restructuring without the commission’s report?</strong></div>
<div style="text-align: justify;">
	The state restructuring commission has to submit its recommendation before we make a final decision on state formation in this country and on the number and size of the provinces and many other issues related to federalism. We cannot ignore this constitutional provision. The responsibilities of the committee are to advice and provide suggestions.<br />
	 </div>
<div style="text-align: justify;">
	The constituent assembly has a right to either reject or accept them. Therefore, we must give them the opportunities as specified in the constitution. I think if we go about deciding the number of states without the commission’s recommendation that would be ignoring the provision of the constitution. It would neither be proper or correct nor acceptable.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why has there been no meaningful debate held so far for state restructuring?</strong></div>
<div style="text-align: justify;">
	It’s because different political parties have different propositions. Their formal proposition is different from what they say in informal interactions. This is also the part of the problem. I think if we have a state restructuring committee, it would help solve some of these contradictions. There has not been serious debate among the political parties primarily because the three major political parties have not given attention to this issue. They are involved in power struggle all the time and busy speculating on who would be the next prime minister. In a way, it is their sense of irresponsibility and negligence towards the commitment made to the people when the constituent assembly elections were held.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Which model of fiscal federalism would be most appropriate for Nepal?</strong></div>
<div style="text-align: justify;">
	It is the question of devolution of authority. One of the more important aspects of this is the financial authority. Till now, Nepal has been a centralised state. Most of the resources are collected by the central government. Now, we want to make sure that we devolve fiscal authority to states and also to the village development committees (VDC) so that they can raise resources on their own. I personally think that if the central government raises 60 per cent resources, remaining 40 per cent would be raised by the local government bodies, states and the VDCs.&nbsp;We have to work along the line of fixing such a ratio. I think 60:40 ratio would be quite logical.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of improper distribution of revenue in federal Nepal as the source of revenue would not be uniform in all the states?</strong></div>
<div style="text-align: justify;">
	I think we also need a financially strong central government. This is because, inevitably, some provinces are going to be financially weak. They may have the resources but these are largely unexploited. For example, in the hilly areas, hydro resources are there but it will take time to exploit them.In the mean time, we will have to find a way to compensate them for the lack of resources. That needs transfers from the central government.</div>
<div style="text-align: justify;">
	It will work out depending on population, human development index and so many other relevant variables. We have to give a sense of equity and justice to people in all the provinces of this country.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The idea of ethnicity based federal structure has courted big controversy. How does ethinicity-based federal structure fare in terms of fiscal federalism?</strong></div>
<div style="text-align: justify;">
	There is a big controversy on this issue. No doubt about that. Different political parties have recommended number of provinces varying from seven to 14. One of the remarkable things is that no particular ethnic group is in the majority in their proposed respective states. Take the case of Limbuwan, for example. In Limbuwan, you have a total of 30 to 35 per cent Rais and Limbus if you combine both the communities. The rest 60 to 70 per cent are non-Limbus. Therefore, to go ahead with the idea of ethnic states, in a way, might alienate the other majority population and may create ground for conflict.<br />
	 </div>
<div style="text-align: justify;">
	The important thing is representation in the provincial and national parliament in line with the ethnic distribution. We have to assure and be clear on that point. Once you achieve that, I don’t think we should stress too much about this ethnic issue. People want representation in the power structure. And that representation must reflect the underlying distribution of the ethnic population. Once there is the electoral system, it makes sure that the ethnic representation is there in line with their ethnic distribution of population in the country. I think it would solve a lot of problems. Once you move in this direction, emphasis on ethnicity alone is going to wield less importance.</div>',
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	(int) 8 => array(
		'Article' => array(
			'id' => '266',
			'article_category_id' => '38',
			'title' => 'The Importance Of Enterprise  Performance Management',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<i><img alt="anil" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/1303899771.jpg" style="width: 105px; height: 156px;" vspace="5" /><br />
	<br />
	<strong>By Anil Neupane<br />
	</strong><br />
	</i></div>
<div style="text-align: justify;">
	Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities necessary to reach those objectives. It is often referred to, with the usage of terms such as Corporate Performance Management (CPM), Financial Performance Management (FPM) and so on. It comprises Strategy Management, Profitability and Cost Management, Business Planning, Financial Consolidation, Spend, Supply Chain and other operational performance areas. EPM aligns the processes, systems, and metrics needed to measure and manage the performance of an organisation.<br />
	<br />
	EPM supports both cost optimisation and growth initiatives. It is a suitable fit for nearly all organisations and should be a priority initiative for CFOs to enable finance function to deliver short and long-term strategic benefits to businesses.<br />
	<br />
	It is considered as a diagnostic tool to monitor the pulse of an organisation by using a set of processes, frameworks, and systems for activities such as planning, measuring, communicating, and monitoring business results. Enterprises typically link these activities to corporate strategies and objectives and might drive them down to many individuals within the organisation to encourage accountability and control. Forrester defines business performance solutions as a category of purpose-built software applications that support these activities. The major BPS functional elements include:<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Strategy and performance measurement address goals, objectives, and accountability<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	A strategy management application supports formal strategy management philosophies (eg, the Balanced Scorecard) but might be adapted to a business’ specific needs. Applications often display the strategy definition in visual strategy maps. Scorecards measure progress against the goals and objectives set forth in the strategy framework. Performance dashboards display more detailed information and allow drilling down to root-cause detail. Dashboards typically include a variety of key performance indicators (KPIs) that might include strategic scorecards as well as relevant comparisons against plans, budgets, forecasts, prior performance, and industry benchmark data.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Planning, budgeting, and forecasting solutions support multiple forward-looking processes</strong></div>
<div style="text-align: justify;">
	Although used almost universally as a control on spending, budgeting often falls short in supporting performance initiatives often as a result of some rigorous and inflexible process and not necessarily due to a software shortcoming <i>per se</i>. Fortunately, in addition to budgeting, the planning solutions support a variety of scenario-based planning activities as well as forecasting processes that add value beyond which is provided by <img align="left" alt="enterprices" border="1" height="259" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/epm.jpg" style="width: 477px; height: 259px;margin:10px;padding:10px;" vspace="10" width="477" />traditional budgeting processes.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Cost and profitability management provides detailed analysis to improve margins.</strong></div>
<div style="text-align: justify;">
	This complex modelling activity helps organisations analyse development, production, and operating costs against revenues by product, customers, and lines of business. Cost and profitability management applications often use activity-based costing as the methodology to develop sophisticated cost and profitability analytical models.</div>
<div style="text-align: justify;">
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Financial reporting and consolidation produce financial statements.</strong> Financial reporting and consolidation applications produce reports focused on delivering financial statements based on accounting results. Statutory consolidations support regulatory compliance and generally accepted accounting principles (GAAP) requirements. These applications also support internal reporting of financial information.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why are companies after it globally?</strong></div>
<div style="text-align: justify;">
	Despite the economic downturn and a global decline in overall IT spending of approximately 3 per cent, spending on CPM Suites remained positive (growing at 3.6 per cent in 2009). Through the last 24 months of economic uncertainty, EPM has helped to manage cost optimisation efforts, but through 2010, many more EPM initiatives were justified on the basis of supporting growth strategies. Furthermore, many of the stalled or sidelined EPM initiatives that did not advance in 2009, were reinstated during 2010.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	With economic downturn during the last few years, companies around the world are more focused on cutting costs and increasing performances. Therefore, EPM has been their major focus to achieve this objective and to have a better understanding of the drivers of corporate profitability.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	Although awareness of the EPM concept has become more widespread, according to an estimate, 40 per cent of large enterprises and as much as 75 per cent of midsize businesses are using spreadsheets or legacy applications to meet their core management processes for BP&amp;F, financial consolidations and financial reporting.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>SAP EPM Suite<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	SAP is a global leader in EPM products. SAP recognises the importance of supporting these functions for an enterprise by establishing a new cross-functional unit, focusing on business performance optimisation. This unit brings together integrated technology and product portfolio with the people, ecosystem partners, and best practices specifically designed to help organisations drive business performance, manage risks and optimise the financial value chain. SAP Business Objects and EPM&nbsp;solutions bring together a set of applications that combine strategic goal-setting linked to effective budgeting and reporting, with additional abilities to analyse profitability. Similarly, SAP Business Planning and Consolidation (SAP BPC) is another tool that is dominating the global EPM suite market.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The major strength of SAP is its dominance in ERP market and its support base around the globe. Lately, SAP has an implementation partner in Nepal as well.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM and Business Intelligence</strong></div>
<div style="text-align: justify;">
	It is sometimes confusing to distinguish between business intelligence (BI) and EPM. The major reason behind this is because different vendors define these terms in different ways. In general context, business intelligence supports EPM tools to achieve results. In terms of strategy, Business Intelligence offers the tools necessary to improve decision-making, but not linked to organisation’s strategy. On the other hand, EPM provides a closed-loop support: linked to strategy through CSFs and KPIs. In terms of purpose, the BI tool helps organisations set and monitor their goals whereas EPM tools help organisations guide their business towards its goals. The scope of BI may be limited to one or more departments or functional areas whereas the scope of EPM is for the entire enterprise.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	As shown in the figure above, EPM forms the higher level of pyramid whereas BI sustains the EPM processes as a supporting tool.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM in terms of Nepal<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	As in the case of companies around the world, most companies in Nepal still use spreadsheets or legacy system for financial planning, budgeting and consolidation. Due to this, the predictions are often time consuming, inflexible and inaccurate. Unlike few years back when there were very little EPM tool options in Nepal, now the country already has a SAP implementation partner. Therefore, companies now have opportunities to implement best EPM tools, like SAP EPM or SAP Business Planning and Consolidation. This shall greatly help business companies distinguish themselves from their competitors.<br />
	<br />
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong><i>(Neupane is a SAP global certified consultant currently working in London. He can be reached at neupane_anil@hotmail.com)</i></strong></div>
<div style="text-align: justify;">
	<strong><br />
	<br />
	</strong></div>',
			'published' => true,
			'created' => '2011-04-27',
			'modified' => '2013-05-24',
			'keywords' => '',
			'description' => 'Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities.....',
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	(int) 9 => array(
		'Article' => array(
			'id' => '265',
			'article_category_id' => '39',
			'title' => 'Healthcare Technologies: Promoting Personal Wellbeing',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Vineet Kumar Tulshyan.jpg" style="width: 218px; height: 168px;" vspace="2" />Vineet Kumar Tulshyan</b></div>
<div style="text-align: justify;">
	Director</div>
<div style="text-align: justify;">
	Healthcare Technologies Pvt Ltd</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Incorporated in 2001, Healthcare Technologies Pvt Ltd has come a long way since. With an annual turnover of Rs 80 million, it has targeted a growth of 15-20 per cent for 2011. Beginning with importing medical equipments in 2001, the company set up a Personal Healthcare Division in 2008. “Given the immense potential for its market in Nepal, we hope that the industry size grows by 1000 per cent,” says Vineet Kumar Tulshyan, the Director of the company. He adds that this tremendous growth can be realised by spreading awareness about personal healthcare. While the expected market is worth a whopping Rs 500 crores, Tulshyan says the current sales of personal healthcare products in Nepal are mere Rs 2-3 crores.<br />
	 </div>
<div style="text-align: justify;">
	Run by a group of young and experienced professionals with core interests in the healthcare sector, the company focuses its efforts in specialised areas. The primary objective of Healthcare Technologies is to deliver qualitative medical products and services to the health professionals in Nepal. It has been active in the healthcare sector in different forms and areas. The company imports and distributes medical and surgical equipments, surgical goods, personal healthcare items, laboratory products etc. Its medical equipments are received well in the private sector entities while it is the market leader in personal healthcare products. “Our Microlife range of products enjoy 50 per cent market share,” informs Tulshyan.<br />
	 </div>
<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/corporate focus1.jpg" style="width: 266px; height: 166px;" vspace="2" />Healthcare Technologies caters its products to government institutes and organisations, pharmaceuticals companies, hospitals, medical colleges, nursing homes, INGOs and NGOs among others. It has a nationwide distribution network which carries out the work in the most professional manner possible. With its distribution channel in place all over Nepal, it has registered a rapid growth in the last three years.&nbsp;The company had a group turnover (Medical Division) of approx US$ 1.7 million in the last financial year, a growth of nearly 80 per cent. Besides the Kathmandu Valley, the company distributes its products through its dealer network in Butwal, Bhairahawa, Pokhara and Birgunj in central Nepal. Similarly, it has dealers in Nepalgunj in western Nepal and Janakpur, Biratnagar and Dharan in eastern Nepal. The company also indulges in direct marketing to hospitals and nursing homes.<br />
	 </div>
<div style="text-align: justify;">
	A total of 15 people are employed with the company under the medical division. Tulshyan says, “I have inculcated a culture in my colleagues that if the company grows, it benefits the employees too.” Healthcare Technologies was recognised by the Nepal Radiological Society in 2009 for its contributions. As part of its corporate social responsibility initiative, it has donated equipments such as Blood Pressure Machines and Thermometers to NGOs and charity hospitals. The company’s mission is to promote personal healthcare system in Nepal. Tulshyan reiterated that spreading awareness is crucial. “In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions, in time,” says he.<br />
	 </div>
<div style="text-align: justify;">
	Tulshyan owes his company’s success to being honest with products and customers. Irrespective of temptations, he does not recommend sub-standard products, he explains. As part of the company’s future endeavours, he plans to manufacture surgical products and start exports in five years time if the government rules and regulations favour the business environment. He says that government support is absolutely important for the sector to flourish.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Healthcare Technologies and its sister concerns</strong></div>
<div style="text-align: justify;">
	1)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Healthcare Technologies Pvt Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>DeVilbiss Healthcare –</b> Portable Oxygen Concentrator and Respiratory Items (5 litre Compact Oxygen Concentrator, IGO Portable Oxygen Concentrator, IFill Personal Oxygen Station, CPAP &amp; Bilevel CPAP)</span></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Microlife AG (Switzerland) –</b> Hypertension and Fever Management Products (Digital Blood Pressure Machine, Aneroid Blood Pressure Machine &amp; Stethoscope, Digital Thermometer)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Bayer HealthCare – </b>Diabetic Care Division</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>AMPall (Korea) – </b>Syringe and Infusion Pumps (Syringe Pump SP-8800, Infusion Pump IP-7700)</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>Mitsubishi Electric – </b>Video Thermal Printer and Paper</span></div>
<div style="text-align: justify;">
	2)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sun Medical Concern:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Technologies (Medical Equipments)</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Diagnostics (Contrast Media)</div>
<div style="text-align: justify;">
	3) Sun Exim:Manufacturer, Importer and Exporter of Medical Recording Paper</div>
<div style="text-align: justify;">
	4)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical Associates Services Pte Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Hitachi Air Compressor</b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Thermax Ltd </b>(India)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; TAS Medical Gas System </b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Grundfos </b>(Denmark)</div>
<div style="text-align: justify;">
	5)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Care Plus:</span>Branded Personal Healthcare Product showroom in the heart of Kathmandu City</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	Strengths</div>
<div style="text-align: justify;">
	Ø Quality of Products</div>
<div style="text-align: justify;">
	Ø Immediate After Sales Service</div>
<div style="text-align: justify;">
	Ø Engineer available on Hotline</div>
<div style="text-align: justify;">
	Ø Competitive Prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Weaknesses</div>
<div style="text-align: justify;">
	Ø Belief in honesty (Tulshyan says he doesn’t bribe to get business)</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Opportunities</div>
<div style="text-align: justify;">
	Ø Spreading awareness</div>
<div style="text-align: justify;">
	Ø Small health centres outside Kathmandu Valley</div>
<div style="text-align: justify;">
	Ø Largely unexploited market</div>
<div style="text-align: justify;">
	Ø Free BP check up camps in cities and small towns</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Threats</div>
<div style="text-align: justify;">
	Ø Low quality products</div>
<div style="text-align: justify;">
	Ø Unhealthy competition</div>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2011-04-27',
			'modified' => '0000-00-00',
			'keywords' => '',
			'description' => '“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”',
			'sortorder' => '191',
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	(int) 10 => array(
		'Article' => array(
			'id' => '264',
			'article_category_id' => '39',
			'title' => 'CG Education:Taking Education Beyond Classroom',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bhushan Gurung.jpg" style="width: 197px; height: 141px;" vspace="2" />Bhushan Gurung</b></div>
<div style="text-align: justify;">
	GM</div>
<div style="text-align: justify;">
	CG Education</div>
<div style="text-align: justify;">
	“We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Encouraged by its spectacular growth in recent times, CG Education aims to have 10,000 students by 2015 under its umbrella. It encompasses schools from pre-school to mainstream schooling under both CBSE and HSEB boards. Ranging from kindergarten to post-graduate level, it plans to expand its reach and create facilities at all major cities in the country. Bhushan Gurung, the GM of CG Education asserts, “We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The organisational vision is to be an integral part of the educational revolution and deliver quality to its students. “Our contribution will not only synergise the vibrant educational sector of the nation but will also activate others to follow suit,” adds Gurung. It was part of the strategic plan of Chaudhary Group, the parent company, to balance its investment portfolio between manufacturing and service sectors. CG Education is one venture that strengthens the group’s foray in the service sector where it sees a tremendous growth potential. More importantly, the society at large – students, government and the nation – will benefit from this gigantic effort.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	CG Education’s investment in its present portfolio of schools, colleges and institutes is over Rs 100 crores. This is spread over its flagship ‘The Chandbagh School’ with likely additions in Pokhara , Butwal and the ‘DPS School’ in Birgunj. The latest entrant under its flagship is ‘The Chandbagh Pre School’, a Montessori system based school for children up to six years of age. It envisages acquiring about 25 schools and institutions and bring them under the CG Education fold. The organisation also plans to work on a public-private partnership with Nepal Government on operating many government educational institutions. It hopes that this will result in a total enhancement of quality of these institutions in terms of faculty, infrastructure and management.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Chaudhary Group believes that high quality affordable education is the key to Nepal’s development. Based on the experience gained from running The Chandbagh School successfully in Kathmandu and with a desire to replicate and move to the next level, it entered into a joint venture with Manipal K-12 Education. The venture offers management services to existing and new schools under the brand name CG-Manipal Schools. It also offers <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cg edu.jpg" style="width: 349px; height: 164px;" vspace="2" />ICT-based School learning solutions and tutorials. “The CG-Manipal Schools is a logical extension of the Manipal Group’s strength in education and CG’s new initiatives in the field of education,” says Gurung. The schools are designed to use the right combination of technology and pedagogy for an effective learning process.&nbsp;Manipal K-12 is part of Pearson Education, the largest educational resource providing organisation in the world. In recent times, CG-Manipal has acquired the highly successful Campion Institutions namely Campion School-Lagankhel, Campion Academy-Lagankhel, Campion Kathmandu Higher Secondary School-Gahanapokhari and Campion College-Kupandole.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><i>Digi</i> Classrooms</strong></div>
<div style="text-align: justify;">
	Involved in various educational activities in Nepal since 1996, CG Education has now initiated efforts to establish <i>Digi</i> Classrooms in the educational institutions of the country. It is a cognitive learning approach and is a widely accepted theory on the learning process. “CG Education is now taking an initiative to establish <i>Digi</i> Classrooms in the educational institutions of Nepal,” Gurung proudly states. CG Education wanted to introduce a new approach where students can understand better and retain new information and hence, the effort. <i>Digi</i> Class’s multimedia contents include audiovisual aids, demonstrations, simulations, rhymes, games, activity sheets, eBooks, 3D interactivity, and patterns which help teachers teach the students in a better way and make them understand better. The content support for digital classes is from Manipal K-12. The curriculum is as per the needs and requirements of boards such as CBSE and SLC/HSEB. The product is available in a hassle-free way under Single Window Service.<br />
	 </div>
<div style="text-align: justify;">
	The schools associated with CGEducation have already implemented ICT-enabled classes.<br />
	 </div>
<div style="text-align: justify;">
	<strong>CG Polytechnic</strong></div>
<div style="text-align: justify;">
	With the intention to develop skilled human resource for Nepali Industries and for better employment opportunities, CG Polytechnic aspires to be the backbone of country’s skill inventory. The Chaudhary Group of industries and Manmohan Memorial Polytechnic (MMP) have jointly launched a technical training programme at CG’s industrial village - CUG in Nawalparasi from September 2009 offering technical courses on mechanical and industrial faculties. The training includes both theory and practical classes in various technical subjects which is tailor made to meet industrial requirement.&nbsp;The main objective of the training is to bring significant improvement in human skill matrix of the organisation.<br />
	 </div>
<div style="text-align: justify;">
	&nbsp;CG Polytechnic is building its capacity to diversify into food technology, accountancy and many other sectors on the need assessment. To be more customer-oriented, it reaches different relevant stakeholders for need analysis as well as maintaining quality of education. In the very near future, CG Polytechnic will become a landmark where technical skills get honed to the highest level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Accreditation and Affiliation</strong></div>
<div style="text-align: justify;">
	CG Education wants to contribute in all streams of education with the aim to be acknowledged as an institution with complete educational solution. Apart from managing schools and colleges, CG Education is involved in the vocational sector as well. With this objective, it has joined hands with renowned educational institutions of the world. Its international affiliations and accreditations include CBSE Board, ‘A’ Level Cambridge University besides the joint venture with Manipal K-12. CG Education’s association with other educational institutions is intended to derive quality from their years of experience in mainstream education. It is also in the process of obtaining accreditation and affiliation with ISO, IB, ETS, ESOL and other renowned educational institutions and agencies.</div>
<p style="text-align: justify;">
	CG Education’s ultimate vision and mission is to impart world class holistic education and produce educated citizens equipped to meet international standards.</p>',
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			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
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	),
	(int) 11 => array(
		'Article' => array(
			'id' => '263',
			'article_category_id' => '39',
			'title' => 'Leon Motors:Recreating Mitsubishi Magic',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Ashish Shrestha.jpg" style="width: 246px; height: 176px;" vspace="2" />Ashish Shrestha</b></div>
<div style="text-align: justify;">
	Executive Chairman</div>
<div style="text-align: justify;">
	Leon Motors Private Limited</div>
<div style="text-align: justify;">
	“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors Private Limited is the authorised sub-distributor in Nepal for Mitsubishi Motors Corporation, Japan and Mitsubishi Fuso Group, Japan. The company started importing Mitsubishi vehicles in 2008 and has sold over 150 units so far. 2010 was its most productive year in which it sold 70 units. The vehicles sold by the company fall on different price points ranging between Rs 4 million and Rs 12 million.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors is the brainchild of its dynamic Executive Chairman Ashish Shrestha. Coming from a family that has traditionally dealt in gold for generations, Shrestha holds an MBA degree from American InterContinental University in United Kingdom. After returning to Nepal in 2006, he wanted to establish a business that suited his personality and justified his management acumen. And thus, Leon Motors came into being in 2007. It is currently focused on reviving the brand image of Mitsubishi Motors. The brand lost its charm and took a beating in the Nepali market due to non-availability of new models from 1998 till 2006. Shrestha says, “A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.” He believes that 236 per cent duty on importing vehicles is astronomically high and plagues Nepali automobile market to a large extent. The company plans to revive Mitsubishi Fuso trucks and buses in 2011 to achieve its targeted growth of 10 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Shrestha rues the unhealthy competition that exists in the automobile market. According to him, a number of automobile companies in Nepal under-invoice their transactions which helps them to dodge the tax and reduce the retail price or increase their profit. He strongly believes that this unethical practice needs to be stopped as it creates unfair competition in the market. To make his point strong, Shrestha proudly shows a certification from TRACE Inc, a US based internationally recognised organisation promoting transparency and anti-bribery compliance in international business transactions.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The company practices an ‘open door policy’ where the employees have direct access to Shrestha for any matter they need to discuss, be it a suggestion or a complaint. An outsider might as well feel that it’s a family run business. That’s the level of camaraderie which exists between the employees at Leon Motors. As part of its CSR (Corporate Social Responsibility) initiative, the company supports an NGO, Society Developer Nepal with its endeavour in providing education for underprivileged children.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Auto Works is the sole authorised after-sales and service centre for Mitsubishi Motors Corporation and Mitsubishi Fuso Group. Besides this servicing arm of Leon Motors Private Limited, there are a number of group companies <i>(see box)</i>.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This group of businesses employs more than 50 people on a permanent basis and considers itself blessed to have a dedicated workforce, many of whom have been involved in their jobs for years now. Shrestha believes that the market is circled with inflated prices, for example, unreal values of real estate holdings. He adds that this coupled with political instability are the major reasons behind people refraining from making investments in the country. On an optimistic note, however, the group plans to enter hospitality business by establishing boutique hotels. It is currently scouting for properties in Kathmandu and Pokhara and seeks to contribute towards Nepal’s tourism prospects. On a personal note, Shrestha has the burning desire in him to bring more hydropower projects to Nepal. He hopes to succeed in convincing investors to do so as it promises to put the country back on track to attain sustainable development. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sister concerns of Leon Motors Pvt Ltd</div>
<div style="text-align: justify;">
	<b>1.&nbsp;Leon Global Private Limited (Trading) </b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; A successful trading house, it has represented an impressive list of international organisations on turnkey projects in Nepal. The company promotes development related projects in the tourism and civil aviation sector, establishment of industries, construction of hydropower projects, supply of communication equipments etc to Nepalese Army, Nepal Telecom and Civil Aviation Authority of Nepal and supply of construction equipments to the Ministry of Physical Planning &amp; Works among others.&nbsp;It is extensively involved in liaison work and promotional activities and provides complete local support during pre and post tendering periods.<br />
	 </div>
<div style="text-align: justify;">
	<b>2. Leon Hager International Private Limited (Distribution)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; It is into distribution business representing various international beverage companies around the world. It currently imports and distributes alcoholic and non alcoholic brands such as ‘Nite’, a ready-to-drink (RTD) product from Thai Spirit Industry Co Ltd, Thailand; ‘Ignite’, a vodka based RTD product from Ignite Corp Pty Ltd, Australia; ‘Jugular’ and ‘Rock’ energy drinks from Jugular Global Pacific Ltd, Australia; ‘Victoria Bitter’ – Australia’s highest selling beer – popularly known as VB from Foster’s Group and rich and robust cooking wines from Australia and France among other European countries.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<b>3. Green City Development Private Limited (Township Development)</b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; This company was established in 2007 along with the leading business houses to develop first-of-a-kind township within the Kathmandu Valley. It plans to build a township covering approximately 387 acres of land with all modern amenities one can think of. Currently, the company is busy purchasing land at the site of the planned project. While it hopes to complete its land acquisition deals by this year end, the project plan and design is being prepared by a Singapore-based firm.<br />
	 </div>
<div style="text-align: justify;">
	<b>4. Ivory International Private Limited (Construction)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Involved in construction business, it has tied up with a leading Chinese construction company, China Railway Engineering Group Co Ltd. This joint venture has been constructing various projects that include commercial buildings, hospitals, hotels, apartment buildings, super malls, roads, bridges, hydropower plants and many more.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	<b>Strengths </b></div>
<div style="text-align: justify;">
	*Strong management team</div>
<div style="text-align: justify;">
	*Prime location (Shantinagar, New Baneshwor)</div>
<div style="text-align: justify;">
	*Famous brand name</div>
<div style="text-align: justify;">
	* Innovative ideas</div>
<div style="text-align: justify;">
	<b>Weaknesses</b></div>
<div style="text-align: justify;">
	* Branding hiatus between 1998-2006</div>
<div style="text-align: justify;">
	* Lack of a state-of-the-art showroom</div>
<div style="text-align: justify;">
	<b>Opportunities</b></div>
<div style="text-align: justify;">
	* Impending expansion</div>
<div style="text-align: justify;">
	* Sports models</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; (small hatchback cars by 2011 end)</div>
<div style="text-align: justify;">
	<b>Threats</b></div>
<div style="text-align: justify;">
	*Too many players in the market</div>
<div style="text-align: justify;">
	* Unhealthy competition</div>
<div style="text-align: justify;">
	* Competitors’ prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Mitsubishi Products in Nepal</div>
<table border="1" cellpadding="1" cellspacing="1">
	<tbody>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Mitsubishi Pajero</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Pajero Sport</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Outlander</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Active Smart X-SUV (ASX)</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					L200 Sportero</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					L300</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Lancer Ex</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Rosa</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Heavy Duty Trucks &amp; Buses&nbsp;</div>
			</td>
		</tr>
	</tbody>
</table>
<p style="text-align: justify;">
	 </p>',
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			'description' => '“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”',
			'sortorder' => '189',
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	(int) 12 => array(
		'Article' => array(
			'id' => '261',
			'article_category_id' => '38',
			'title' => 'Japan’s Earthquake:A Global Wake Up Call',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<span><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Jagadish Ghosh.jpg" style="width: 106px; height: 134px;" vspace="2" />Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.</span></div>
<div style="text-align: justify;">
	<i>By Dr Jagadish Ghosh</i></div>
<div style="text-align: justify;">
	<b>&nbsp;</b></div>
<div style="text-align: justify;">
	'After three years, even a disaster can be good for something’ goes a Japanese proverb. But in the midst of this appalling devastation, it might be obscene to suggest that a disaster of this magnitude could possibly be turned into good for something. Evidently, time and again, not only the human spirit but also the laws of economics have proved amazingly resilient in the face of the most terrible of adversities. The widespread destruction has been taken as a challenge and an opportunity to rewrite the triumphant history of growth and development with renewed spirit and zeal. The destruction spurs reconstruction and acts as a stimulus for economic enterprise.<br />
	 </div>
<div style="text-align: justify;">
	A ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan’s east coast on 11 March 2011 sweeping away boats, cars, homes and people as widespread fires burned out of control. The magnitude 8.9 offshore quake places the earthquake as the fifth largest in the world since 1900. It is also the largest in Japan since modern instrumental recordings began 130 years ago. The two disasters were followed by the damage at nuclear reactors threatening harmful radiation. Japanese Prime minister Naoto Kan has described the catastrophic combination of earthquakes, tsunami and nuclear meltdown as the biggest crisis the country has had to face since the end of World War II.<br />
	 </div>
<div style="text-align: justify;">
	The quake caused a 400-km long and 160-km wide rupture in the earth’s crust as one tectonic plate dove under another off the coast of northern Japan. This led to an upheaval in the sea above it, sending a 30 foot wall of water racing up to 10 km inland in Japan and reaching California across the Pacific Ocean 10 hours later. Tsunami warnings blanketed the entire Pacific as far away as South America, Canada, Alaska and the entire US West Coast. The quake was followed by more than 20 aftershocks for hours, most of them of more than magnitude 6.0. As many as six reactors at the Daiichi nuclear power plant in Fukushima are facing crisis at one level or the other verging of N-disaster. The death toll was likely to continue climbing over 10,000 given the scale of disaster. But without minimising the tragedy in any way, the damage in terms of human lives has been remarkably contained relative to what might have been. For that, all credit must go to successive Japanese administrations and civil society. Situated on the ‘Ring of Fire’ – an arc of seismic activity around the Pacific Basin – Japan has been hit time and again by devastating earthquakes, from the one in Tokyo in 1923 to Kobe in 1995. But the Japanese have drawn their lessons from these. So they have the world’s most sophisticated earthquake early warning systems and an extensive tsunami warning sensor network. They have building codes that keep such exigencies in mind. Similarly, they have thorough disaster management plans at every administrative level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Insured Losses<br />
	</strong></div>
<div style="text-align: justify;">
	The earthquake in Japan could lead to insured losses of nearly $35 billion, according to risk modelling company AIR Worldwide, making it one of the most expensive catastrophes in history. It is nearly as much as the entire worldwide catastrophe loss to the global insurance industry in 2010 and could be the triggering event that forces higher prices in the insurance market after years of decline. This temblor will go down as the costliest earthquake in modern history in terms of insured losses, surpassing the roughly $15 billion in losses of the 1994 Northridge earthquake in California.<br />
	 </div>
<div style="text-align: justify;">
	<strong>2010 – The Year of Earthquakes</strong></div>
<div style="text-align: justify;">
	The most devastating earthquake of the year with more than 220,000 deaths struck Haiti, a country that was in no way prepared for such an event. Chile and New Zealand, on the other hand, were very well prepared. As a result, the challenges presented for reconstruction and the insurance underwriting aspects must be assessed differently for different countries.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Scientific Analysis</strong></div>
<div style="text-align: justify;">
	On 12 January 2010, Haiti suffered the most devastating seismic catastrophe since the destruction of Tangshan in China in 1976. The quake, with a magnitude of 7.0, did not come as a great surprise for seismologists. The danger had been clearly stated in a scientific publication dated 2008. The epicentre of the quake which ravaged the capital Port-au-Prince and the surrounding area was located near the boundary between the North American and Caribbean plates. The Enriquillo-Plantain-Garden Fault, which was originally considered to form the quake’s epicentre, runs in an east-west direction here. The situation was further aggravated by the fact that the rupture in the earth’s crust propagated towards the capital from its hypocentre west of Port-au-Prince.<br />
	 </div>
<div style="text-align: justify;">
	The associated interference of seismic waves magnified the vibrations. Intensive geological and geophysical investigations after the quake have revealed a highly complex rupture process. It appears that a previously concealed blind thrust fault was also involved and interacted with the Enriquillo-Plantain-Garden Fault. This is of significance for the future earth quake potential in the Port-au-Prince area. It may be assumed that the stresses accumulated in the Enriquillo-Plantain-Garden Fault since the earthquakes of 1751 and 1770 were not fully released on 12 January. Moreover, the investigations have also shown that strong shaking was not restricted only to areas with soft, unconsolidated sediments. Due to the topography, it also occurred on a hillside in the Petionville district, south of the city centre.<br />
	 </div>
<div style="page-break-after: always;">
	<span style="display: none;">&nbsp;</span></div>
<div style="text-align: justify;">
	The Chilean earthquake six weeks later did not strike unexpectedly either. The strongest earthquake ever recorded by instruments worldwide with a magnitude of 9.5 had already occurred in the Valdivia/Puerto Montt region, on the boundary between the Nazca and South American plates, in 1960. To the north of this region, a magnitude 8.0 quake off the coast of Valparaiso caused damage all the way to Santiago in 1985. The area between these two rupture zones, however, had remained relatively quiet since 1835. This ‘seismic gap’ was filled by the Maule quake on 27 February, with a magnitude of 8.8.<br />
	 </div>
<div style="text-align: justify;">
	A third earthquake, which struck Qinghai province in Central China on 13 April, paled in comparison to these two major catastrophes. Its magnitude was similar to that of the Haitian quake and claimed roughly 2,700 lives. The earthquake which struck New Zealand’s South Island on 3 September attracted greater publicity. This was not due to its magnitude of 7.0, similar to that of the quakes in China and Haiti. What made this quake different was that, unlike the Haiti and Chile cases, an earthquake had not been expected here, 40 kilometres west of Christchurch. Experts had focused more on the Alpine Fault to the northwest which marks the boundary between the Indo-Australian plate in the west and the Pacific plate in the east. The Darfield earthquake (named after the town closest to the epicentre), however, occurred along a previously unknown fault system under the sediments of the Canterbury Plains. Unlike Port-au-Prince, the rupture proceeded away from the city in this case but the energy emitted was unusually high for a quake of this magnitude.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why Haitian earthquake proved most devastating</strong></div>
<div style="text-align: justify;">
	Buildings of every kind – from representative buildings, such as the government palace and the Hotel Montana, to mud huts – were damaged more or less indiscriminately by the earthquake in Haiti. The corporate headquarters and production facilities of foreign companies remained structurally intact. Yet the few insured losses stemmed primarily from this sector. There are several reasons why the Haitian earthquake proved to be the most devastating ever in recent times, as expressed by the overall loss in relation to gross domestic product. Among others, they include the lack of building regulations, poor building material and a shortage of qualified labour as well as the absence of an institutional framework ensuring that construction projects are completed in an orderly fashion.<br />
	 </div>
<div style="text-align: justify;">
	The Maule quake in Chile was the first earthquake of high magnitude and correspondingly long duration (over 120 seconds) to test modern high-rise buildings. The high overall loss of US$30 billion was not caused by instability. Both the quality of Chile’s earthquake building code and its implementation are very good on a global scale. Only five of the 12,300 buildings erected since the last major earthquake in 1985 collapsed. Another 50 or so had to be demolished on account of massive structural damage. The magnitude of the overall loss is due above all, to the damage to non-structural elements in addition to the small number of major losses. Among other things, these include non-supporting walls, false ceilings and façade elements. Evidently, the building code must be updated in order to avoid or reduce the extent of such damage to property. In some cases, infrastructure also proved unexpectedly unstable as in the case of the motorway linking the international airport and the city of Santiago.<br />
	 </div>
<div style="text-align: justify;">
	In Chile, the load-bearing structure of mid-rise buildings (up to 20 floors) is primarily made up of shear walls parallel to the axis of the building. Compared with framed structures, such buildings are fairly rigid when exposed to seismic stresses. Newer buildings, however, tend to have thinner walls. The necessary transverse reinforcements also proved inadequate in some cases. Most of the few cases of major damage are attributable to such shortcomings. Low buildings with up to four floors are frequently built with confined masonry. In this case, the individual brick wall elements are connected by cast pillars of reinforced concrete. This type of construction has also proved to be very good.<br />
	 </div>
<div style="text-align: justify;">
	Since buildings with shear walls or confined masonry are more widespread in Chile than in other countries, the experience gathered there cannot simply be applied to other regions. Framed constructions prevail in the American Pacific Northwest Region (Oregon, Washington), for example. As for the earthquake mechanism, Chile provided a blueprint for a future quake at the Cascadia subduction zone where the Juan de Fuca plate is subducting under the North American continent from the west. Portland, Seattle and Vancouver are all about the same distance from the epicentre of a future earthquake as Santiago was from the February quake.<br />
	 </div>
<div style="text-align: justify;">
	In Christchurch, New Zealand, many residential buildings were damaged above all by collapsing chimneys. They frequently crashed through the roofs of homes, most of which were lightweight constructions. Many historical buildings of unreinforced masonry in the city centre also suffered significant damage. As in Chile, non-structural damage played a major part here, too. Unusually widespread soil liquefaction was one particular characteristic of the New Zealand quake. Near-surface sediment layers on the Canterbury Plains are particularly prone to this phenomenon, which causes extensive damage that is also difficult to repair, as the substrate settles to varying degrees during the liquefaction process, causing buildings to tilt.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Lessons for Nepal</strong></div>
<div style="text-align: justify;">
	Going by the past records, Nepal has been experiencing major quakes every 70-75 years. According to seismologists, Nepal ranks 11th among the 30 most quake prone countries in the world. In Nepal, the tectonic motion – the movement of plates in the Indian subcontinent towards Tibet – that caused the Himalayas to rise have also been causing buildings to collapse and cities get razed since the 13th century. And it is likely that Nepal would be faced with a similar situation in the near future, with Western and Central Nepal including the Kathmandu Valley the most prone to damage.<br />
	 </div>
<div style="text-align: justify;">
	The 1934 Quake, that devastated Bihar, measured 8 on the Richter scale, killing nearly 11,000 people and 20 per cent of the buildings in the valley. The National Seismological Centre of Kathmandu draws an apocalyptic version of the disaster: that it would kill more than 40,000 people and injure another 100-200,000 if it happens today. It would also destroy 60-70 per cent of the buildings and leave 60-70,000 people homeless. There is no such term as earthquake-proof as no building can be entirely safe from earthquakes. The actual term used is earthquake-resistant which means that the damage to life and property caused following an earthquake will be minimised.<br />
	 </div>
<div style="text-align: justify;">
	Establishment of the Disaster Preparedness Plan and Disaster Relief Plan makes a huge difference in earthquake-prone regions, when the catastrophes do occur as we have experienced in the two Latin American countries: Haiti and Chile. By comparing these countries to Nepal and taking a closer look at Nepal’s situation, it is evident that Nepal is in dire need of a strong mitigation plan.&nbsp;In Kathmandu Valley which is a former lake-bed, 2.5 million people live in poorly constructed buildings.&nbsp;Kathmandu has only one airport and three roads connecting it to the outside world. In the event of an earthquake, these roads are most likely to be damaged rendering them unfit for transportation. Nepal has a National Seismological Network comprising 21 short period telemetric seismic stations that started with the first seismometer set up at the top of the Phulchowki Hill, 14 km southeast of Kathmandu, in 1978. The Nepali Diaspora needs to come together and build a procedural mechanism to protect the country by setting up a Disaster Preparedness Plan, and a Disaster Relief Plan. The National Society for Earthquake Technology (NSET) - Nepal, established as a non-governmental and non-profit organisation in 1994, has been actively pursuing the earthquake risk and mitigation planning and earthquake awareness projects.<br />
	 </div>
<div style="text-align: justify;">
	Protracted political wrangling in Nepal is preventing a key piece of disaster preparedness legislation from reaching parliament. Though endorsed by the cabinet in October 2009, the National Strategy for Disaster Risk Management (NSDRM) has yet to be made into law. The passing of this bill is critical. Without this, the country’s disaster preparedness efforts cannot move forward.<br />
	 </div>
<div style="text-align: justify;">
	Development of better building codes, strict enforcement of the existing one, creation of disaster management plans and response bodies from the local level to the central must be ensured. Similarly, streamlining of relevant administrative machinery with funding, clearly demarcated jurisdiction and insurance awareness are measures that the government must take seriously. Unless these measures are taken, the cost of country’s lack of preparedness may turn out to be devastating. The right lesson to be drawn from events unfolding – a combination of righteous knowledge and righteous actions helps us for sustaining survival.</div>
<div style="text-align: justify;">
	<i>(Dr Ghosh is the CEO of National Insurance Company Ltd. This article is based on material provided from various sources including </i>Munich Re<i>)</i></div>',
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			'description' => 'Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.',
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	(int) 13 => array(
		'Article' => array(
			'id' => '260',
			'article_category_id' => '38',
			'title' => 'HR Practices & Line Managers',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	The Line Managers in organisations play an important role in the development of its employees’ professional careers and encouraging their positive attitude. The organisations have recognised the advantages of the Line Managers’ involvement in learning and development process of its employees. Yet, most organisations have not worked towards educating human resource (HR) practices to them. It is becoming increasingly important to acknowledge that the Line Managers possess the potential to help change organisational environments for the better.<strong><br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Educating HR practices to Line Managers</strong></div>
<div style="text-align: justify;">
	The Line Managers should be educated on HR policies and HR functions such as performance appraisals, training identification etc. They should have the authority to track HR activities and report the same to the Human Resource Department (HRD).&nbsp;Correspondingly, the role of the HRD should be to make the Line Managers competent by providing communication training so as to help them communicate better with their subordinates. So, close interaction between the HRD and the Line Manager and giving them the authority is vital.<br />
	 </div>
<div style="text-align: justify;">
	Further, the Line Managers should be briefed on conducting appraisals effectively. Performance appraisals must be conducted to help employees maximise their respective potential for mutual benefit.&nbsp;For this purpose, it’s imperative that the Line Managers receive behavioural and communication training.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Management Review Meetings</strong></div>
<div style="text-align: justify;">
	The organisations must give due importance to management review meetings for the Line Managers. They are an important part of educating the Line Managers as they get to hold discussions with the management boards. This process helps taking timely and appropriate actions required for organisational development.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Job Description for the Line Managers</strong></div>
<div style="text-align: justify;">
	Developing guidance is another important aspect which helps the Line Managers perform better. The HRD must make them realise the importance of the organisational team. The relations between the HRD, Line Managers and other employees must complement each other. The inclusion of HR responsibilities in the Line Managers’ job description and coordination with the HRD for the employees’ performance enhancement would help formulate effective HR related activities. A complaint mechanism also needs to be developed as it can work as the reflection for change requirement.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Counselling and Training</strong></div>
<div style="text-align: justify;">
	The Line Managers have to work closely with the employee so they must understand their human needs. For instance, an employee may be experiencing grief, tension or a personal problem. It may influence his end performance and weaken his retention prospect. In this scenario, the Line Manager’s counselling can influence the employee positively. A Line Manager’s positivity can rub on to the team and enhance its overall capability.<br />
	 </div>
<div style="text-align: justify;">
	The ability to inspire is not the easiest of qualities to develop. The Line Managers must be provided trainings, periodically, on people management and enhancing competencies of their team members. Such trainings can help them learn to be more competent to achieve common objectives.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Line Managers’ Leadership Role</strong></div>
<div style="text-align: justify;">
	Leadership plays an important role for a team to accomplish a common task. The Line Managers should lead the group of people and work towards enhancing their capabilities without getting insecure. The HR personnel cannot reach each employee most of the times. So, the Line Managers should be given adequate authority to make decisions, to a certain extent. When the Line Managers are given authority and responsibility, there is a tremendous possibility of increased productive output.<br />
	 </div>
<div style="text-align: justify;">
	The HRD should have a system which identifies the employees’ expectations from the organisations. It can then design the desired format and address it to the Line Manager.&nbsp;As a result, the Line Manager takes pride in the positive changes happening to his team members. The Line Managers play a vital role in ensuring that employees are mentored, motivated and feeling competent. The HRD can consider itself successful if employees are productive and contribute towards overall organisational growth. The employees’ successful careers within the organisation are a healthy sign of things to come. <br />
	 </div>
<div style="text-align: justify;">
	<i>(The write-up is based on an ‘HR Kurakani’ discussion on “Educating HR to the Line Managers”, on 29 December, 2010 conducted by Real Solutions Pvt Ltd. The participants at the discussion included Ayush Shah, ICTC Group; Robin Shrestha, Caritas Nepal; Sarika Amatya, Freelancer; Sharda Rana, Sipradi Trading Pvt Ltd; Shraddha Joshi, Standard Chartered Bank Nepal and Sujata Rijal, Echo Advertising Agency. Shailendra Raj Giri, the Managing Director of Real Solutions acted as the moderator for the discussion.)</i></div>',
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			'id' => '259',
			'article_category_id' => '31',
			'title' => '‘Fiat Punto And Linea Are Two Great Cars To Start Business With, In Nepal’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/rajeev.jpg" style="width: 181px; height: 265px;" vspace="2" />Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview with <i>New Business Age</i>, Kapoor talked about Fiat’s market prospects in Nepal.&nbsp;Excerpts:</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>You are launching two models of Fiat cars here. What made you choose these two specific models?</strong></div>
<div style="text-align: justify;">
	These are excellent models and unique in terms of styling, safety and low pollution. We feel that Punto gives the right size and drivability options to small families. On the other hand, Linea is a sedan that is luxurious and has a huge boot space for carrying a lot of bags. It is a very stable car and practically won every award in India. Therefore, they are two very good vehicles to start business with, in Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is your observation of the market here? Is there any target sales of these two models?</strong></div>
<div style="text-align: justify;">
	I think we should be able to get around five percent of the market share with these two cars. Then depending on how the models perform here, we can plan an official strategy on introducing other models. We hope that the affordability for buying cars in this country grows. Because it will help us sell more units and give shape to a long-term plan here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are Fiat’s passenger cars doing in the Indian market?</strong></div>
<div style="text-align: justify;">
	Fiat is doing very well in India. We sold about 23,000 units last year. The Indian market is growing at around 13 to 14 per cent every year. We also want to grow correspondingly with the Indian market this year. We are already working on a small car to be launched in 2012 end or 2013 beginning. So a lot is happening in India. The market there is becoming very competitive. However, introducing Fiat models in Nepal is a different ballgame altogether because we are not restricted to bring models only from India.&nbsp;Depending on the need, we can introduce models directly from Fiat in Italy as well if the price is right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the competition with other brands in the Nepali market?</strong></div>
<div style="text-align: justify;">
	Hyundai is dominantly the market leader in Nepal followed by Toyota and Maruti. There are a host of other brands too. Tata Motors, one of our joint venture partners in India, is also a major player here. The competition is definitely going to be there. And it’s always good to have competition as it makes us agile and focused on keeping the quality and the price parity right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the challenges you foresee for the market here?</strong></div>
<div style="text-align: justify;">
	The most glaring challenge for us is that we are a late entrant.&nbsp;Others have been selling their cars for many years now and are established players. Therefore, we need to carve a niche here. This is why we have introduced these two cars that are absolutely different in touch, feel, look and safety. We need to immediately move forward. That is why instead of only launching the car, we have first worked on strengthening the after sales aspect of it.&nbsp;We have already set up a spare parts and service centre with all the tools required. It is our effort to make sure that customers get immediate after sales service. It’s important because for us, the customers come first. So, we are launching the car after setting everything else in place. The customers can buy our cars without worrying too much about after sales service and availability of spare parts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is the market response for Fiat cars in the South Asian market compared to American and European markets?</strong></div>
<div style="text-align: justify;">
	Fiat has many established brands such as Alfa Romeo, Lancia, Maserati and Ferrari. Fiat is very strong in European markets, Brazil and even Turkey. Fiat is now venturing into China and Russia. Indian operation is already running steadily. It is also entering the US market now. A lot is happening in the automotive world. Due to the slowdown in the European, American and Japanese markets, the focus now is on countries like Brazil, Russia, India and China. So, Fiat is also eyeing these ‘action markets’.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you have any specific plans for the Nepali market?</strong></div>
<div style="text-align: justify;">
	We are reasonably focused on the Nepali market. We will be engaging ourselves in supporting our dealer here, Batas Brothers Motors, in all possible ways. We will make sure that besides the availability of spare parts and after sales service, we will make the latest models available here. We will make sure that when we plan a product, we will accordingly plan a strategy for Nepal too. I see a great future for Fiat in Nepal. This country is going to grow. As the infrastructure grows, there will be a requirement for more cars. And we want to be here and be a part of it. I can assure you that Nepal will always get the top line products here. </div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview......',
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			'id' => '274',
			'article_category_id' => '34',
			'title' => 'Financial Sector Reform Very Slow',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" height="123" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/fncci1.jpg" vspace="2" width="300" />Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID. Among the main objectives of the programme were to improve the financial standings of the two major state owned banks, Rastriya Banijya Bank (RBB) and Nepal Bank Limited (NBL). The programme also looked at enhancing the institutional and supervisory capacities of the central bank.<br />
	<br />
	<div>
		Both the banks had foreigners as Chief Executives as well as part of the management teams while NRB too had foreign consultants in various positions. Speaking at a discussion programme organised by Nepal Economic Association to discuss ‘Financial Sector Reform Programme: Lessons Learnt and The Way Forward’ Dr Khatiwada observed, “Reform does not mean employing consultants, it is rather an exercise in building institutional capacities.”<br />
		 </div>
	<div>
		&nbsp;The Chief Executive Officer of Lumbini Bank, Shovan Dev Pant made a paper presentation highlighting the private sector perspective. Pant appreciated the private sector’s contribution towards the development of Nepal’s financial sector. Speaking on the occasion, Finance Secretary Rameshwor Khanal refused to accept that the financial sector reform has derailed. “However, it is progressing at a very slow pace,” he said. Citing the example of several major banks collapsing at the start of the global recession, Khanal remarked that banking has an intense domino effect when compared to other sectors.<br />
		 </div>
	Among the other speakers at the programme, former NRB Governor Bijaya Nath Bhattarai opined that the loan defaulters are the major reason for impeding reforms. Dipendra Bahadur Kshetri, also a former NRB Governor, argued that home-grown experts are competent enough to manage Nepali banks and suggested that the reform programme must be carried forward under their leadership.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'description' => 'Nepal Rastra Bank (NRB) Governor Dr Yubaraj Khatiwada has said that financial sector reform in Nepal is essentially the banking sector reform. Nepal had started the said reform programme in 2004 with financial and technical assistance from the World Bank and British Development Agency DFID.',
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			'id' => '273',
			'article_category_id' => '34',
			'title' => 'Multinationals Rule The Roost AtFNCCI Excellence Awards 2010',
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			'summary' => null,
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	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/biz news.jpg" style="width: 458px; height: 173px;" vspace="2" />Standard Chartered Bank Nepal has bagged the FNCCI National Excellence Award 2010 presented by Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Similarly, Unilever Nepal won the Service Excellence Award while Surya Nepal received the People’s Excellence Award. Prime Minister Jhala Nath Khanal gave away the awards to the winners amidst a special function organised by FNCCI recently.<br />
	 </div>
<div style="text-align: justify;">
	Lomus Pharmaceuticals and Nepali Paper Products won the National Excellence Award under medium and small industry category respectively while Hulas Wire Industries received National Class Certificate Award. For Service Excellence Award, Direction Nepal was the winner under medium scale industry category while Quest Entertainment won it under the small scale industry category. Likewise, Butwal Power Company and Nepal Pharmaceuticals Lab bagged the award under the large scale industry category.<br />
	 </div>
<div style="text-align: justify;">
	Kumari Bank and Quest Pharmaceuticals were awarded People’s Development Certificate under People’s Excellence Award.<br />
	 </div>
<div style="text-align: justify;">
	FNCCI Excellence Award was instituted in 2001. Earlier, Surya Tobacco (2001), Standard Chartered Bank Nepal (2003) and Surya Nepal (2005) had won the prestigious award.<br />
	 </div>
<div style="text-align: justify;">
	Fifteen companies vied for this year’s awards sponsored by Nimbus Agri Business Enterprise. <br />
	 </div>
<div style="text-align: justify;">
	The awards are given in three categories: National Excellence, Service Excellence and People Excellence. These three categories are further divided among large, medium and small industry categories. According to FNCCI President Kush Kumar Joshi, the awards recognise overall excellence. Customer service, employees’ development and satisfaction are among the parameters taken into consideration for the awards.<br />
	 </div>
<div style="text-align: justify;">
	Speaking at the event, Prime Minister Khanal praised the awards selection process as scientific and expressed hope that the participant companies take the feedback from the evaluation process seriously and improve their quality. <br />
	 </div>
<p style="text-align: justify;">
	FNCCI President Joshi said, “The excellence awards are not merely recognition of the past achievements but they also provide a framework to improve performance in the future.” He hoped that the Excellence Awards will be able to create a benchmark for existing businesses and industries in Nepal. He explained that the award is created in the best fit model for Nepal after examining similar awards in the US, Japan and India. </p>',
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			'id' => '272',
			'article_category_id' => '40',
			'title' => 'FISCAL FACE OF NEPAL'S FEDERALISM',
			'sub_title' => '',
			'summary' => null,
			'content' => '<p style="text-align: justify;">
	<i><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/achyut  wagle.jpg" style="width: 114px; height: 147px;" vspace="2" />By Achyut Wagle</i></p>
<div style="text-align: justify;">
	Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda. The preamble of the Interim Constitution of Nepal 2007 has baptized the country as the Federal Democratic Republic Nepal. The Article 138 of the same Constitution has provided basis for restructuring the state.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Both, the constitutional and circumstantial yokes now guide Nepal, for better or worse, to perhaps irreversible journey to federalism. But, matter of factly, that is all in theory. Practically, there is a wide political space to be covered between the present unitary state to a judiciously delineated, stable yet functionally acceptable-to-all federal structure of future Nepal. Yet again, the federal Nepal is impossible to imagine without bringing the fiscal frame of federalism into forefront of the state restructuring discourse, which now seems to have obliqued by hyperboles on either side of the political debate.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Despite an euphoria of a sort to resolutely adopt a federal system, the objectives envisaged by the Interim Constitution in this particular regard appear rather slanted. The very concept incorporated in the Article 138 does not accept federalism by-and-large as an economic phenomenon. It proposed to ‘end the disparities’ of various forms, but hardly prescribes modality for prosperity and optimal use and scientific redistribution of resources. The worst proposition in the constitution is: it has authorised the government, not the Constituent Assembly (CA) to constitute the State Restructuring Commission, which is supposed to give impartial technical inputs.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	It is apparent that the federal structure of the nation cannot be finalised without technical report from the Commission, and thus, organising constitution writing process would not <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img.jpg" style="width: 367px; height: 182px;" vspace="2" />complete without the Commission and its inputs. Apart from this, the constitutional provision regarding the Commission gives more ominous than the virtuous signal. The authority given to the government to form this Commission provides an edge to the party in power to make it comfortable to itself and therefore, chances of its report being politically biased remain higher. Why was not the responsibility of constituting such a commission vested to the all powerful CA is a question unanswered so far.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Nevertheless, Nepal has no alternative to writing a new constitution, sooner or later. That new constitutional framework must embrace the federal set of polity and structures. Of all the structures, fiscal federalism will be both – defining and delineating basis of the sub-national administrative units, and also the means to ensuring justifiable (re)distribution of resources, prosperity and welfare. For all these reasons, the fiscal federalism is and should be at the centre, in all discourses related to the federal restructuring of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Essence of Federalism</strong></div>
<div style="text-align: justify;">
	Federalism is unique and in a way paradoxical concept. First, it seeks to consolidate the national unity while creating newer and larger number of sub-national units; ostensibly by divisions. Second, its objective is to recognise the social, linguistic and/or cultural identity without diluting the overall national identity. And, the third, it strives to bring the government nearer to the people that has a better sense of autonomy in deciding their own fate, but without severing its ties and dependence to the farther government – the one at the centre.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For many, federalism is merely an administrative re-mapping of the political geography of the nation. Creation of sub-national structures, that may be called state, province, prefecture or anything of the kind, seems to the prime objective of Nepal’s ongoing debate on federalism. But, how these new structures evolve and exercise the state power – mainly to meet the economic needs of the citizenry – would determine whether any nation is essentially federal or not. Nepal cannot be exception to this fundamental theoretical premise.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The functions, duties and rights of the federal unit are defined by the extent of power a unit can exercise. Its authority depends on the adoption of universally accepted models to extract power from among the – delegation, decentralisation or devolution, or combination of all of these. And, at the heart of all of these lies – the democracy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	There are very large nation-states world over with varying number of sub-regional administrative units. But, in absence of democratic dispensation, right from the grassroots, these units can only exercise very limited state authority delegated or marginally decentralised by the centre. Only power devolved by democratic exercise can only create a federal state, true to its sense.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Fiscal Federalism at the Centre</strong></div>
<div style="text-align: justify;">
	The concept of fiscal federalism, and for all practical purposes, the entire frame of federalism, is generally summed-up in three major</div>
<div style="text-align: justify;">
	<br />
	components – namely the tax-point transfers, equalisation grants and convincingly justifiable distribution of resources mainly the natural resources among the sub-national units. There are other peripheral, operational or fringe issues too. But in effect, the main three would largely incorporate them all. There are also several models of both ‘fiscal’ and ‘general’ federalism. But, they too do not necessarily go beyond these three fundamentals of federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Also, there are views against the perspective of limiting the ‘entire federalism’ to the ‘fiscal alone’ proposition. It is <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover img1.jpg" style="width: 406px; height: 461px;" vspace="2" />more apparent in Nepal’s discourse on federalism. Even the top-hats of major political parties who would be deciding the ultimate frame of Federal Nepal also tend to believe that without specific mention of issues like political inclusion, rights-based access to state and recognition of racial and ethical identities, the very purpose of federalism, at least for them, could be defeated. The level of understanding of our CA members on such technical and essentially academic issues is better not to raise here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In fact, unlike the popular beliefs, the issues of inclusion and identity are rather purely economic issues. For example, the inclusion is not sought in any abstract issues, it is rather meant to ensure inclusion in employment, benefits and other economic opportunities. Even the preservation of identity either is an economic activity in itself, or it has a cost to develop and preserve the different facets that give an identity to people and communities – like language, scriptures, rituals, customs, traditions and culture.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	These realities make it imperative that Nepal’s discourse on federalism needs an immediate and meaningful re-orientation, so as keeping the fiscal federalism at the centre of all exercises aimed at state restructuring. And, highly extensive technical and factual details and their analyses would require deciding on the size and the borders of new sub-national states. Nepal does not seem to have even initiated the process of those financial and other statistical number crunching, so far. Therefore, the claims that constitution could be written within a month ‘if’ the parties agrees are unrealistic platitudes. Expert believe that it would take at least six months of rigorous effort for a highly competent professional team to finalise the issues related to fiscal federalism – i.e. tax, distribution of natural resources and, of course, demography and geography.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In the hindsight, this is also an indication that it is impossible to complete the constitution writing by the stipulated deadline of 27 March 2011. Also, political campaigning to create new states on the basis of caste, community or even some extreme demands like ‘One Terai, One Province’ do not present potentiality for financially viable provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Technical Considerations</strong></div>
<div style="text-align: justify;">
	Financially justifiable and economically functional sub-national delineation is going to be perhaps the most challenging aspect to give Nepal a federal shape. All three major aspects – tax point transfers, equalisation grant and distribution of natural resources among the provinces – involve larger number of murkier issues than the easier ones.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Apart from these, several other components of fiscal relations between the central and sub-national governments, financial management and its processes within the state must also be decided to effectively devolve power to the people at the grassroots. Such issues may relate, but not limited to planning, economic diplomacy, money market and specialised institutions for both fiscal and financial architecture. Given Nepal’s poor governance and slanted nature of understanding about fiscal federalism even at the top-rung of political leadership, the country seems to be making ommitive than spontaneous jump to fiscal federal structure. These are some of the reasons why these issues deserve more <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cover%20img2.jpg" style="width: 342px; height: 158px;" vspace="2" />meaningful discussion, before the country could decide on the actual frame of federalism, essentially the fiscal federalism.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Tax Point Transfers</strong></div>
<div style="text-align: justify;">
	One of the key components of federalism is the decision on the jurisdiction of major tax collection points, i.e. which sub-national government will administer or operate a particular tax point, the types of taxes a province would collect and how the collected revenue would be distributed between the centre and the state, and, sometimes among the states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In case of Nepal, the decision on the jurisdiction of tax points could face double pronged problem. First, only six customs points collect over 90 per cent of the customs revenue <i>(Table 1)</i>. And, the amount of collection at only the points that lie in two zones – Bagmati and Narayani of the Central Region, account for well above sixty per cent. The customs revenue generally accounts for 25.3 per cent of the total revenue.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Similarly, the revenue contribution of four districts is above 80 per cent and this reaches to 94 per cent if added another four districts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This situation does not only present high tax concentration in the Kathmandu Valley and the central region but also poses a serious challenge to divide the provinces so as each of them can have reasonably attractive tax collection points within their territory. It also indicates to the reality that despite adoption of federal structure, the financial dependence of the provinces could yet remain with Kathmandu. And, even worse, this economic factor cannot be drastically altered soon by a mere political decision.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In addition to deciding on the tax point jurisdiction, decision on the kind of taxes that provinces can impose and the taxes that would directly go to central accounts is also going to be a difficult one. Generally, property and service taxes are levied by the local bodies, sales and value added taxes go to the provincial government and customs and income taxes go to the central government accounts. This assumption appears suitable in the case of Nepal too, as our vertical administration is accordingly stratified in three tiers.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Equalisation Grants</strong></div>
<div style="text-align: justify;">
	Despite tall asks of autonomous and semi-autonomous provinces on different bases, the fiscal and financial fundamentals do not support the possibility of creating such states. The basis of autonomy is the abundance of physical and financial resources available within any given political unit. As evident in the tax collection patterns, the revenue resource does not support such an ‘autonomous state’ except the one created at the centre, incorporating Kathmandu.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Until the state-to-be-created in the federal set-up are capable of mobilising their own resources, the equalisation grant, the money given by the centre, will be the most dependable source to finance the development and public delivery of goods in the provinces. Even on this count, our debate on federalism seems unduly titled to political considerations alone. In the most ideal cases of revenue and grant sources of funds, dependence to centre remains pretty high. For example, the provinces of Switzerland are entitled to keep 50 per cent of the revenue collected and Canadian ones can hold up 47 per cent of it. These are the highest rates of centre-province revenue sharing the world over. In this light, the ‘autonomous’ state advocated in Nepal appears pure farce.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	But, in our case, the ‘sustainability’ or ‘survival’ side of the new states has never been debated thoroughly as the issue deserved. There are also demands of creating separate provinces like ‘Karnali’. One could easily imagine the level of would-be financial dependence of such states to the centre. Such scenario implicitly infer that centre must once again remain strong as it will have to continuously dole out money to so called autonomous provinces, and, it in turn, has to be strong in effect to gather enough amount of resources to be able to meet the needs of all these new ‘baby’ states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Natural Resources</strong></div>
<div style="text-align: justify;">
	The distribution of natural resources among the new provinces is another difficult and unavoidable task on effecting federalism. There are several examples of serious disputes between the provinces regarding the rights to use such resources. The Kaveri and Narmada river disputes in India are classic examples to it.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	In Nepal, water, forest, mines and minerals and land (mainly cultivable) are considered major natural resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	For us, one advantage of this resource vis-a-vis federal imperatives is that, it is fairly evenly distributed given that we agree to justifiably allocate them to generally acceptable size and number of states; say five to nine.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Recently, some campaigns misinterpreting the international instruments like ILO Article 169 have compounded the problem. But, lately the people involved in the indigenous rights movements themselves are becoming somehow disillusioned to deliberate misleading campaigns of yesteryears. However, natural resources will still remain a major basis of re-delineation and the process will surely be difficult.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Other Issues</strong></div>
<div style="text-align: justify;">
	There are several other issues which have to come to the forefront in the discourse on federalism. They include, whether a province should have authority to carry its own economic diplomacy to accept or endow financial assistance from and to international community; whether it can have its own finance bill; or would it have own supervisory and regulatory authorities independent of central oversight or would they just function as extended line agencies, etc. Equally complex is the issue of large infrastructure projects, their management, ownership and return – if any.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Unfortunately, Nepal as the country as a whole, and CA in particular as the only responsible constitutional organ to debate all these provisions to include in the new constitution, have remained far short of initiating meaningful deliberations. Whatsoever, Nepal in executing the federal structure must ensure unfringeable private property rights universally in all the states, freedom to movement of products and services as well as people, unhindered trade and business transactions between the states and uniform (underently different) tax structure, among others. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Article 138 of the Interim Constitution</div>
<div style="text-align: justify;">
	138. <b>Progressive restructuring of the State: </b></div>
<div style="text-align: justify;">
	(1) <span>&nbsp;&nbsp; There shall be made progressive restructuring of the State with inclusive, democratic federal system of governance, by doing away with the centralized and unitary structure of the State so as to end discriminations based on class, caste, language, gender, culture, religion and region.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(1a)&nbsp;Recognizing the desire of the indigenous peoples and of the people of backward and other area including Madhesi people towards autonomous provinces Nepal shall be a federal democratic republican state. Provinces shall be autonomous and vested with full authority. The boundaries, number, names and structures, as well as full details of the lists, of autonomous provinces and the center and allocation of means, resources and powers shall be determined by the Constituent Assembly, while maintaining the sovereignty, unity and integrity of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(2) &nbsp;There shall be constituted a high level commission to make suggestions on the restructuring of the State as referred to in Clauses (1) and (1a)&nbsp;The composition, function, duty, power and condition of service of such commission shall be as determined by the Government of Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	(3) <span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The final settlement on the matters relating to the restructuring of the State and the form of federal system of governance shall be as determined by the Constituent Assembly.</span></div>',
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			'description' => 'Nepal, at least, constitutionally is a federal state now. But the fiscal component in the federalism, which should have been the main basis for federalising the country, is way below in the state restructuring agenda.',
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			'id' => '271',
			'article_category_id' => '40',
			'title' => 'Bases For Fiscal Federalism',
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			'content' => '<div style="text-align: justify;">
	The following article represents Dr Devendra Raj Panday’s research-based paper presented at a symposium titled “Fiscal Federalism in Nepal” in August 2009 in Kathmandu. The extract is printed here with his consent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The studies on fiscal and financial federalism concentrate on how financial and monetary institutions’ functions might be arranged and a mechanism for coherent policy making and monitoring established for the state to produce expected outputs. It involves the assigning of spending, taxing and borrowing powers between the centre and the other tiers of government and the focus of responsibility and accountability in fiscal management. In many ways, it is an act of political decision and bargaining – in the course of finalising the constitution and making yearly decisions especially on taxation, revenue sharing and allocation of grants by the centre for various purposes. In all this, efficiency and equity, often in conflict with each other, become issues of major concern. In order to do the needful, the national economy has to run efficiently, produce growth and provide stability that is necessary for broader development. At the same time, the aggregate growth must not create or sustain imbalances, vertically and horizontally. It means that further continuation of centre within the periphery syndromes in governance is not acceptable from both economic and political standpoints. The discrepancies in economic and social status of various regional or provincial economies must be narrowed down with the ‘marginal benefits’ of growth going disproportionately to the disadvantaged and economically and socially excluded people across the country. There are several ways in which fiscal efficiency balanced well with equity considerations can be pursued.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	First, allowing ‘independent fiscal regime’ for the provinces should not dilute the common market character of the federation. Simultaneously, it should also be kept in mind that the free flow of goods and services and investment across the provinces can result in favour of better-equipped regions that may already be relatively better off than others. In theory, there should be economic convergence of different regions under free trade with the mobility of factors as well as goods and services. But we know from Nepal’s experience as a player in the international economy as to how difficult it is for a least developed country (or a region within a country) to compete with better endowed, resourceful and experienced economies. Less developed provinces in the federation deserve the same treatment politically, economically and morally as historically, Nepal as a least developed nation has demanded internationally, including in SAARC mechanisms.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Second, there has to be an understanding and a political consensus on the degree of competition and the spirit of cooperation to be pursued among the constituent units of the federation. The neo-liberal economic approaches sometimes display contradictory positions in this respect. On the one hand, there is the market preservation argument which expects the federation to work in harmony and have the states produce and trade goods without any barriers that would endanger the national market’s efficient working. On the other, there is a view that there should be constitutional guarantees against regulating inter-state flow of goods and services, to perhaps avoid the kind of situation in India where there is no harmony in some taxes levied in the states and on their policies concerning inter-state movement of goods and services. Meanwhile, the liberal ideology also illustrates the idea of ‘competitive governments’ and argues that the states must compete with one another in providing incentives to attract mobile capital and other factors into their territory to punish the laggards. The preference for competitive federalism where the states may compete among themselves to maximise their own welfare at the cost of other provinces may reflect the ‘beggar thy neighbour’ strategy of yesteryears. This is a critical point since, like in the overall design of economic liberalisation, only the relatively prosperous states would benefit from competitive economic and fiscal policies. In post-1990 India where the states are encouraged to compete with each other for attracting investments into their territory, some states have done well, but at the cost of growing inter-state disparities and regional imbalances. Nepal can ill afford a similar practice. It would also run counter to the social objective of federalism which is to reduce disparities and imbalances, not to increase them. Once again, purposeful pragmatism calls for an approach that would optimise people’s welfare at the provincial and local levels and encourage entrepreneurship and investment all around without the states jeopardising each other’s interests and the overall interest of the national economy.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Third, in the practical task of expenditure and revenue assignment, efficiency consideration is implicit in the widely held opinion that before considering taxation, assignment of expenditures among different tiers of government should be taken care of. The idea in this ‘money to follow work’ principle is that taxation and borrowing powers of the states and assumedly, the centre’s should not be independent of specific obligations they undertake for discharging public functions and the volume of expenditures required for that purpose. The idea is to ensure that all states are empowered to provide comparable public services regardless of their revenue capacities. Beyond this, the expenditure assignment is expected to be guided by economic considerations whereby the central as well as provincial and local governments provide services whose benefits accrue to the residents within its jurisdiction and where the costs of the provisions incurred can be internalised within that jurisdiction. To put it simply, the responsibility for the provision – where the benefits from a given service are distributed nation-wide such as the country’s defence, the Supreme Court or the national highway system – lies with the centre. If the benefit incidence of a given service is limited to primary and secondary education or water supply and sanitation, the provision is best readied by provincial and local governments. The opportunity to save on transaction costs and the possibility of harnessing the economy of scale in fiscal operations are associated elements of the process.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fourth, in a developing country where both the expectations and the requirements of the people are high, assigning expenditures for the centre and the constituent states does not only mean slicing the existing budget into central and provincial items of expenditure and dividing tax revenue accordingly. It also means taking into account the responsibilities to deliver services that the people could not have earlier. It also means undertaking various development works for generating social goods that can be provided or ensured to finance them. The challenge will arise from policy matters and in the pursuit of related priorities. For agriculture, education and health among others, the centre may wish to promote certain norms and targets considered desirable from the national viewpoint. The states in charge of these assignments can have different ideas especially if the same political party or the coalition of parties is not in charge at the centre and specific states. The centre will have other concerns including those that are part of its international commitments. Such commitments can be about trade and environment as they can be about national and international human rights standards concerning the status of women, children, indigenous people etc. And there are commitments about Millennium Development Goals (MDGs) with further complications arising from the possibility that many of the related functions will come under the purview of provincial governments. Consequently, expenditure assignment also becomes responsibility and accountability assignment against which the availability of matching revenue needs to be guaranteed. The centre has an obligation to address these issues as it negotiates the tax sharing arrangements and, particularly, the conditional and unconditional grants’ transfers from the centre to the provinces.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Fifth, there are four areas of concern that should guide the process on taxation. One, every jurisdiction needs adequate tax revenue to finance the assigned and necessary expenditures. To make up for the shortfall in one jurisdiction, the better endowed among others should have the incentive to engage in revenue sharing. Two, efficiency consideration will be as important in the assignment of taxing power as in spending, more so due to its direct impact on the working of the common market. The incentives and disincentives in the tax structure on a given jurisdiction, especially for the mobile factors and the consumers of public services are critical. Taxation assignment requires appropriate study of tax bases, possible overlapping of incidence, the spill-over effects and the population that stands to benefit from the spending facilitated by such taxes. Three, the distribution of taxing authority among the different tiers of government has a significant bearing on equity. The residence based taxes on income and property may be appropriate for the provincial and local governments, but any tax with significant redistributive power, such as progressive income tax becomes suitable only for the national government to enforce national priorities on equity and broader development. Four, administrative efficiency including transaction cost considerations will also guide the assignment of taxing power. On this basis, some taxes become suitable even for sub-provincial or local governments for eventual sharing vertically where local conditions and administrative set up can help administer it better.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sixth, apart from the question of specific taxes to be assigned to the centre and the provinces, a decision about the collecting agency is also important. Some taxes available for meeting public expenditures may be collected and used by only one jurisdiction. One such example could be the property tax levied and collected by local governments. Such tax base can also be shared between the local and provincial governments. Some taxes may be collected in one jurisdiction and used by all. For example, income tax can be collected by the centre and shared with others. In all these cases, the tax base, its incidence and the administrative cost of collection will be important considerations. From a political perspective, the perceived or pursued autonomy of the provinces vis-a-vis the centre will play its part. There is a potential conflict in the way one asserts ‘states power’ and the compromises needed in the interest of efficiency as well as equity in the interest of national bonding.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Seventh, as in Nepal’s case of federalism by ‘devolution’ and not ‘aggregation’, the central government retains its basic strength and power which applies to fiscal arrangements too. The centre must have absolute power to collect taxes from the domains of individual provinces and use the funds collected to meet expenditures it deems important across the country. In almost all the important federal countries, the share of the central government in total public revenue (collected by the centre, the provinces and the local governments) is above 50 per cent. In Nepal, the economic reality – the likely wide variations in the economic status and revenue bases of different regions and the social imperative of redistribution – will undoubtedly vest the centre with considerable authority and responsibility in this respect.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Finally, besides redistribution, it is critical that the central government be adequately empowered to undertake stabilisation functions, on the one hand, and monitor the economic and distribution effects of inter-jurisdiction competition, on the other. It is prudent and practical to let the centre have exclusive authority over stabilisation function and use its power of the purse in a way where the provincial governments have an incentive to follow the national priorities even as they are bound to come into conflict with priorities established by them in their provincial interests.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<i>(Dr Panday retired from government service as Secretary of Finance and became the Finance Minister in the first government formed after the restoration of democracy in 1991.)</i></div>',
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			'article_category_id' => '40',
			'title' => '‘We Need A Strong Central Government With Fiscal Redistribution Power’',
			'sub_title' => '',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Ram Sharan Mahat.jpg" style="width: 192px; height: 217px;" vspace="2" />Dr Ram Sharan Mahat</b></div>
<div style="text-align: justify;">
	Former Finance Minister</div>
<div style="text-align: justify;">
	The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How would mobilisation of resources take place under the federal structure?</strong></div>
<div style="text-align: justify;">
	Mobilisation of resources is imperative to run the government irrespective of whether there is a federal structure or not. Under the federal structure, there will be governments both at the central and provincial levels. Therefore, resources will be mobilised at both ends. Apart from the revenue sources under their respective jurisdictions listed in the constitution, there will be a concurrent list of revenue sources imposed at both levels. In federal countries, the centre as well as the provinces impose taxes and duties such as income tax and excise duty which raises the burden on the taxpayers. Duties are normally collected by the centre at a single point for administrative convenience but shared at both levels. In addition to the central tax, the provinces piggyback to a certain extent, however, remaining within limits defined by the respective framework legislation. For example, if the central income tax is 25 per cent, the province may add another 5 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The source of revenue in Nepal at present are centralised in a few districts. Under such situation, how can fiscal balance be maintained when Nepal becomes federal?</strong></div>
<div style="text-align: justify;">
	This is definitely a big challenge. The provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces. But given the character of the proposed delineation of provincial boundaries, most provinces will have practically no revenue source at least in the short and medium run. People think that once they have a separate province, they will have all the autonomy and freedom. But if the province has no resource of its own and depends on the central allocation even for day-to-day administration, the autonomy has no meaning. Therefore, one has to be very careful while carving out the provinces. The decision should also be based on long term viability and economic sustainability of the regions, in addition to other considerations. Unfortunately, at present the most vocal demand relates to provinces based on ethnicities.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of regional disparity due to unequal distribution of resources and sources of revenue?</strong></div>
<div style="text-align: justify;">
	The common fallacy among the ardent federalists in Nepal is that regional disparity will be narrowed and poverty banished once there is a federal structure. This is wrong. Resources and development potential are unequally distributed and so are the revenue sources. Competition among provinces with differing resource endowments could accentuate regional disparities instead of narrowing down unless there is intervention from the centre. For this, the centre must be strong with redistributive power. In the USA, there are serious regional disparities. West Virginia’s per capita income is less than half of Connecticut’s. In India, Haryana’s per capita income compared to UP and Bihar is three to five times higher. Please note that India is not the perfect example of a federal structure. India, at best, can be regarded as a quasi federation with a strong centre. So, this situation in India is despite central intervention.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should federal Nepal’s fiscal policy focus on to ensure appropriate and equal distribution of resources among the provinces?</strong></div>
<div style="text-align: justify;">
	There is no alternative to a strong central government with fiscal redistribution power to ensure equity and economic justice. All provinces should have uniform access to basic services like education, health, electricity, roads and other socio-economic services. For this to happen, poorer provinces will need central support through a mechanism called Equalization Fund. A fiscal mechanism to ensure transfer of resources from rich to poor provinces is necessary. It is precisely for this and other reasons that revenue from major sources like customs, income tax, and partially VAT and excise must go to the centre. If you look at Nepal’s case at present, these sources practically yield no revenue. If they are brought under provincial jurisdiction, most federal units will have no income at all.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why hasn’t there been a meaningful debate on state restructuring and the form of federal system?</strong></div>
<p style="text-align: justify;">
	It is not that there are no debates taking place. But generally speaking, the focus has largely been on ethnic lines rather than on long term sustainability and from development perspective. Most people have a vague idea about federalism and what it will deliver. State restructuring is not just about the country’s division into federal units. It is more than that – such as ensuring people’s empowerment at the basic level. Democracy is after all the empowerment of individuals, beyond communities and societies. It could be ensured with strong decentralisation but there has hardly been any debate on that.</p>',
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			'description' => 'he provincial government will have to work hard to mobilise their own resources to reduce excessive dependence on the centre. In my opinion, the provincial governments should have the capacity to meet a bulk of the administrative cost of their respective provinces.',
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		'Article' => array(
			'id' => '269',
			'article_category_id' => '40',
			'title' => '‘We Must Have Small Number Of States For Financial Feasibility’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bijaya Nath Bhattarai.jpg" style="width: 153px; height: 173px;" vspace="2" />Bijaya Nath Bhattarai</b></div>
<div style="text-align: justify;">
	Former Governor, Nepal Rastra Bank</div>
<div style="text-align: justify;">
	The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the monetary aspect of federal Nepal?</strong></div>
<div style="text-align: justify;">
	Nepal Rastra Bank (NRB) is the authority for all monetary issues in Nepal. NRB has its branches and sub branches spread all over the country. It not only works as a fiscal agent but also facilitates commercial banks through operating currency chests. It regulates the money supply, flow of liquidity and supervises and regulates banks and financial institutions. In the federal structure too, the currency in use will be the same and there will be a solitary central bank which will be responsible for providing all central banking functions to every state in the country. There won’t be separate currencies for individual states. But all monetary issues should be controlled by a central regulator i.e. Nepal Rastra Bank.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>In a federal structure, the state revenue, expenditure and debts will have to be shared between central and local governments. How practically feasible will this be for Nepal?</strong></div>
<div style="text-align: justify;">
	As far as I know, the countries with federal structure have different forms of taxation. Some are levied by the central government while some others are at the states and municipal levels. There are three types of taxation. The municipal taxes would be the income of the particular municipality. Similarly, state taxes would be the revenue of the states. The policy to distribute central taxes according to an agreed formula should be adopted. This will be the most complicated negotiation among the states and the centre. Based on the policy of distribution, taxes mobilised by the central government would be divided among the states. It must be noted that in Nepal, 60 to 65 per cent of economic activities are centred in the Kathmandu Valley. Then come the Terai hubs namely Bhairahawa, Biratnagar, Birgunj and Nepalgunj followed by towns like Pokhara and Hetauda. The economic activities in other areas are minimal. Therefore, resource mobilisation and sharing will be difficult proposition for federal Nepal. On the question of debt management, there needs to be an agreement on issuance of debt, use of debt and final repayment of debt. Most of the country’s debt issuance and repayment is at the central government level.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The rising recurrent cost is already eating up the country’s revenue generation capacity. With governments at the provincial levels, the overall administrative and recurrent public expenditure is likely to shoot up with no commensurate growth in revenue. Wouldn’t this be an alarming situation?</strong></div>
<div style="text-align: justify;">
	Resources remaining after fulfilling the recurrent expenditure are used in development activities. This is supplemented by the resources and means obtained from foreign aid and loans for development activities. The resources thus mobilised would be further divided in the federal system. Then there would be chances for even less resources and means left for development projects. The revenue grows along with the economic development of the country. If the country under federal system moves ahead and develops economically, the national income will grow. We can take Switzerland as an example where the per capita income is around US$ 34,000. But our country’s situation is such that federal structure can actually lead to resource crunch. The far western region, especially Karnali, is least developed. There are other under developed regions too where the conflict had escalated due to unequal distribution of income and resources. In such areas, the resources injected have to be comparatively higher. This would leave very little resources at the centre’s disposal. It would be ideal to have a small number of states and small state structures. Only then will we be able to mobilise resources effectively. At present, I see a faint possibility of introducing new forms of taxation for increasing resources. During the past decade or so, there have been very few new investments. Even now, the investment environment is gloomy for domestic as well as foreign investors. Foreign aid and internal resources mobilised by the state have not been effectively utilised. As a result, there is a liquidity crisis in the financial sector. The government has not been able to address budgetary issues well. There is fiscal imprudence which is reflected by large non-budgetary expense at the central level. It will be necessary to maintain strict fiscal discipline in a federal system. The non-budgetary expense has to be lowered to a minimum. If we can do that and utilise resources effectively for development, the situation may improve over the years as the economy will then grow. However, the current resource distribution pattern could invite complications.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How can we decrease current expenses so that more resources can be allocated in development activities?</strong></div>
<div style="text-align: justify;">
	We have very limited resources. So, when we want to divide them among the centre and the states, there could be complications. While making a transition to the federal structure, we should make sure that the structure envisioned by the constitution is small and dynamic. For example, there are more than 600 representatives in our existing Constituent Assembly. This number is massive given the size of our country. Compare this figure with our neighbouring country India which has 552 members in its lower house of parliament. It is said that our federal parliament will follow a bicameral system, for greater representation of every region. The number of representatives should be brought down significantly from the present one to ensure low governance costs. Also the size of the provincial government must be small and effective. If this is not ensured, very little resources would be left for development activities after dividing them among central and regional governments.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>There has been no real debate on the economics of Nepal’s federal structure. Given this, how can we be definite about the direction we are heading?</strong></div>
<div style="text-align: justify;">
	I agree that there must be a serious debate on this issue. The statesmen and the CA too have not discussed fiscal federalism seriously. Major issues such as the availability of resources and means and the model of federal structure must be discussed now. I personally feel that without serious debates, going for federalism might backfire on the country in the long run. Nepal has limited resources. Therefore, the demarcation of states based on ethnicity could prove to be a dangerous proposition. It will definitely promote ethnic conflict among our own people. And we definitely don’t want Nepal to follow the example of Yugoslavia. The states must be divided based on economic reality.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What reforms do you think are required once we go federal?</strong></div>
<div style="text-align: justify;">
	Well, there are a lot of things that need to be reformed. Our GDP and tax ratio are lower compared to many countries. We can look at increasing tax compliance. In the recent past, media has reported tax evasion by big business houses. All citizens must feel that paying taxes is their duty and it should not be evaded. Greater tax generation will enable the state to mobilise adequate resources for development and social causes. Nepal has started providing social security allowances for elderly people. In the coming days, the state can offer free medicines and health services to the economically deprived people. For that, a sense of responsibility in people must develop to ensure tax compliance. If the government can take the role of a facilitator and focus its investment in infrastructure, Nepal can experience a prosperous economic development. The problems that we face today are that of infrastructure, labour relations and power. As per reports, around 200 small industries have closed shop owing to power shortage. Similarly, many industries have experienced decline in output due to labour unrest. The political parties must unite for national and development issues irrespective of their ideological differences.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Being one of the poorest countries in the world where there is little revenue left for development after incurring current expenditures, can we afford a federal form of government?</strong></div>
<p style="text-align: justify;">
	If we see economically, it is very difficult due to the resource constraints. As and when we enter the federal structure, it will be necessary to differentiate federal and state taxes. Let’s take the example of the USA where the sales taxes are collected by the states. Similarly, the municipal and income taxes are collected, respectively, by the municipalities and the federal government. Our main sources of revenue are VAT, customs duties and income tax. The land tax, rental tax and other smaller taxes are collected by the municipalities. I think the problem in Nepal arises due to centralisation. The rights must be decentralised. If small structure and decentralisation of rights can be ensured, there is no need to create new states in the name of federalism. There are districts where there have been no economic and development activities. We have seen in the past also that the situation of conflict was invited by economic inequality. This inequality is due to the imbalance in economic opportunities for different regions and the failure of implementing economic development plans. The mid western and far western regions are the most backward regions of the country. Despite huge potential, Karnali region remains grossly underdeveloped. If the planners in the past had successfully taken the decentralising path, the people wouldn’t have been left dissatisfied. This happened due to huge economic disparity between the various regions. An economically decentralised country holds more promise than a&nbsp; federal structure.</p>',
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	(int) 6 => array(
		'Article' => array(
			'id' => '268',
			'article_category_id' => '40',
			'title' => '‘Development In One Region Should Complement Development In Another’',
			'sub_title' => '',
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			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Pitamber Sharma.jpg" style="width: 163px; height: 182px;" vspace="2" />Dr Pitamber Sharma</b></div>
<div style="text-align: justify;">
	Geographer and Regional Planner</div>
<div style="text-align: justify;">
	There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The interim constitution says that the states, once created, must be autonomous. To ensure such autonomy also in the economic field, the states must have ample resources. How do you see the feasibility of such economic autonomy of the proposed states?</strong></div>
<div style="text-align: justify;">
	Being self-reliant will depend on the number of states and the criteria on which they will be created. In Nepal, autonomy is interpreted only in the political sense. It is often forgotten that political autonomy remains circumscribed in the lack of economic autonomy. If a state or province has to rely on the centre for all its development needs, how can it exercise autonomy in political or economic decision-making? All states may not have all the resources. However, care should be taken that each state is carved, as much as possible, in a way that it has at least some basic resources to complement its development efforts. There are 14 states proposed by the Constituent Assembly’s state restructuring committee. Many of these proposed states are simply not viable economically or politically. I believe that in Nepal we still have enough scope to design states as planning units. The foresight we show today will make it easier to deal with the problems of tomorrow.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What would be the appropriate geographical delineation for distribution of natural resources among the new states?</strong></div>
<div style="text-align: justify;">
	Nepal is a country with enormous geographical and topographical diversity. This diversity in many ways has determined the type and distribution of natural resources. The Terai plain as well as the Inner Terai are rich in agricultural resources. This area also has a unique wildlife. Similarly, the hills and mountains are rich in biodiversity resources, hydro power, nature- and culture-based tourism resources etc. The element that links and complements the geographical diversity between the hills and the plains is the hydrological system – the major river basins of Nepal. There are hydrological, demographic (migration) and economic (trade) linkages between the highlands and the lowlands. Ideally speaking, the most appropriate geographical delineation of states – which takes into account the distribution of natural resources – would be the one that follows the river basins because this would allow the complementary development of unique resources. However, we do not live in an ideal world. While natural resource endowment is important, equally important are the historic aspirations of the diverse communities that inhabit the different regions. These aspirations also need to be addressed in the formation of states. Nepal’s move from a unitary state to a federal one is dictated in many ways by these aspirations.<span>&nbsp;&nbsp; <br />
	<br />
	</span></div>
<div style="text-align: justify;">
	In a country like Nepal, the crux of the issue of federalisation is that the development in one geographical and resource region has to complement the development of another region. That is the basis on which the resources need to be considered in designing federal states.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Some political parties are strongly raising the demand for states based on ethnicities. How challenging will it be to manage and distribute the resources along these lines instead of geography- and resource-based states?</strong></div>
<div style="text-align: justify;">
	The political discourse on federalisation in Nepal has been dominated primarily by the issue of ethnicity. Not much attention has been paid to the attributes of an ethnic state, or even what comprises an ethnic state. Some people are scared of the word ethnicity altogether. The reality is that ethnicity makes a significant difference in the lives of people.&nbsp;Nepal has 100 designated ethnic groups according to the 2001 census. And there are 92 languages spoken in the country. Major ethnic/caste groups in Nepal have their territories of traditional habitation. The groups have settled continuously, are relatively concentrated, and have a significant and dominant, if not majority presence in particular areas. This is true for all large and small aadibasi and janajati groups and the Chhetris. However, the dalits do not have their own distinguished geographical territory or a separate identity by virtue of language.&nbsp;This is in spite of the fact that they comprise the third largest ethnic/caste group and the most marginalised population in Nepal.<br />
	 </div>
<div style="text-align: justify;">
	If all major ethnic groups in Nepal were to have their own states, it would be an enormous challenge to manage and distribute natural resources. Ethnic boundaries rarely coincide with resource boundaries. Even macro watershed would be divided among different ethnic domains. All hydropower resources would be in the domain of hill/mountain ethnic groups, with none in the Terai. The capacity of ethnic states to deal with the issues of mitigation and adaptation to climate change would be extremely limited. It is because this would require a coordinated watershed level response.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you think that the redistribution of resources may ignite resource conflict after the formation of new federal states?</strong></div>
<div style="text-align: justify;">
	As I have mentioned earlier, much would depend on the criteria used in the designation of states, and of course the number of states created. The experience of other countries show that conflicts over control, regulation, use, benefit and maintenance of resources, particularly water, are among the common conflicts resulting from federalisation. Constitutional provisions are therefore made for arbitration and resolution of such conflicts. (Highlight.) The redistribution of resources is ensured mainly through inter-governmental transfers. However, to assure that the central government has enough resources to offset imbalances between the states, some clarity is required with respect to the share of local/state revenue going to the central treasury.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, you think the 14 states proposed by the CA’s State Restructuring Committee is not practical?</strong></div>
<div style="text-align: justify;">
	The idea of 14 states proposed in the draft report of the Constituent Assembly’s State Restructuring Committee, in my view, is neither rational nor appropriate. For a country of Nepal’s size, 14 states will be too many.&nbsp;If ethnicity is the only criteria considered for the designation of states, I see no justification for at least four of the proposed states.&nbsp;Jadan has a population of 50,000 while Bhotes comprise only 1.2 per cent of Nepal’s population. Sherpas total only 90,000 people and a mere 21 percent of Nepal’s total Sherpa population live in the proposed state. Additionally, Sunkoshi and Narayani have as mixed a population as any other ethnic state. One of the major problems with the report is that it does not lay down any principles for states’ formation. For example, when does an ethnic group merit the status of a state as opposed to an autonomous region within a state?<span>&nbsp;&nbsp; The report does not provide answers to these kinds of questions.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Running and maintaining the state affairs is a costly proposition. How would the states help in mobilising resources for the nation while meeting their own recurring costs?</strong></div>
<div style="text-align: justify;">
	At present, only nine among the 75 districts are in a position to generate revenues that go beyond meeting their recurrent expenditures. In other words, if all the proposed states of Nepal are to be in a position of meeting their recurrent expenditures and generate a surplus, it is basically from the revenue from these nine districts that will have to be somehow apportioned among the states. As I said earlier, inter-governmental transfers will have to play the key role in maintaining the financial viability of the states. Inter-governmental transfers should ensure that (a) all expenditure assignments of the states can be met through these grants and (b) that it should also provide the basis for basic long-term investments required for mobilising resources. In Nepal’s case, for example, the states falling under the current mid and far-western regions will need massive investments from the centre for at least 10 to 15 years, by which time they could be self-sustaining. Investments by the centre on key infrastructures in the state will remain crucial. One of the problems that the state governments in poorer states will have to face is the flight of capital as capital flies out from low-yielding states to high-yielding states. A situation can easily arise where the poor states become poorer while the rich ones become richer. This will emerge as a big challenge in the management of federalism. The success of the federalism enterprise may as well lie in the extent to which they are enabled to mobilise resources.&nbsp;</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What may the reason that there is no meaningful debate taking place on state restructuring and the form of federal system?</strong></div>
<div style="text-align: justify;">
	The political parties are ignoring the most critical and operational issues of federalism. It was Maoists who raised the issue of the federal republic and turned it into a national agenda, and they did it right. The rationale for the federal republic was to break, once and for all, the shackles of a feudal, overtly centralised, monarchic, predatory state. This was a historic achievement. For the first time in nearly two-and-a-half centuries, it set the stage for redefining and reimagining Nepal. But the Maoist perception went astray because of taking ethnicity as the sole basis for federalisation. As a result, the question of resources, development and meaningful devolution of power remained ignored. The two other major political parties – the UML and the Nepali Congress – are still taking time to fully own the idea of a federal Nepal.&nbsp;It is evident from their reactive approach to the whole issue, so much so that their official positions are not yet clear. The Madhes based political parties too made the federal agenda their main political plank. But they only took it as far as it challenged the colonial flavour of the policies of the hill-centred Nepali state vis-a-vis the Madhes. The ‘one Madhes, one state’ slogan was raised as a vehicle for economically circumscribing the hills and making it a hostage of the Madhes, however defined. The ethnic dimension is critical and important but no less important is the issue of dealing with poverty, exclusion, and in a fundamental sense, the mode and meaning of development. The two issues are no doubt linked but one cannot be a substitute for the other.<br />
	 </div>
<div style="text-align: justify;">
	Thus the debate has centred on issues of identity and emotion rather than the more substantive issues of strategy and resources for development. I believe that once the dust settles and the states come into being, development will once again emerge as the agenda around which politics will revolve.<span>&nbsp;&nbsp; </span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What should be the main objective of federalism in Nepal’s context?</strong></div>
<div style="text-align: justify;">
	The objective of federalism in Nepal should be the creation of a prosperous country which will benefit all, irrespective of ethnicity, caste or class. The rational for federalism in Nepal has to rest on three premises. The first is the recognition of the ethnic, linguistic, cultural and regional identity and aspirations of the diverse population groups that inhabit Nepal. For over two centuries, the Nepali speaking, upper caste hill dwellers following the Hindu faith namely Bahun and Chhetri enjoyed the privileged patronage of the Nepali state.&nbsp;Shared ownership of the state requires that progressive ethnic, cultural and regional identities are given due recognition. The second is to facilitate rapid, equitable and inclusive development so that livelihoods of all, and particularly of the vulnerable, marginalised and disadvantaged groups, can be rapidly improved. This requires that adequate attention is paid to natural and human resources that can provide the basis for equitable and inclusive development. The third is to decentralise and devolve power to the lowest possible level so that the roots of a truly participatory and accountable democracy are strengthened.</div>
<p style="text-align: justify;">
	Two concepts, I believe, can help us move towards a federalisation that takes identity, inclusive development and devolution as the point of departure.&nbsp;The first is the concept of ethnic/caste groups that have suffered from historic discrimination and have a dominant presence in geographically adjacent and contiguous areas. The second is the concept of special autonomous areas. Following the first concept, federal units can be formed around a few major ethnic/caste/language group habitats that have historically remained in adjacent or contiguous areas, and have developed a sense of ethnic affinity over time. Such federal units can incorporate areas with existing or potentially sustainable natural resource as well as economic base. Following the second concept, special autonomous areas can be designated within federal units with particular ethnic/caste dominance.</p>',
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	(int) 7 => array(
		'Article' => array(
			'id' => '267',
			'article_category_id' => '40',
			'title' => '‘Political Parties Must Honour The Constitutional Provision And Form State Restructuring Committee',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Prakash Chandra Lohani.jpg" style="width: 162px; height: 180px;" vspace="2" />Dr Prakash Chandra Lohani</b></div>
<div style="text-align: justify;">
	Former Foreign and Finance Minister and Co-Chairman of Rastriya Janashakti Party</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The state restructuring committee has not been formed yet. What are the reasons behind it?</strong></div>
<div style="text-align: justify;">
	It is clearly specified in the interim constitution that we should have a state restructuring committee. So, it is the responsibility of the government as well as of the political parties to ensure that the state restructuring committee is formed. The government as well as the major political parties have not fulfilled this responsibility. In fact, the state restructuring committee should have been formed while the Constituent Assembly was in its first session. The fact that this has not been done as yet is a reminder of our negligence towards the constitutional provision. I think when Pushpa Kamal Dahal was the prime minister, he tried to form it. He nominated Dr Ganesh Gurung to head it but the parties concerned were not able to agree with the names of other members. So, the body formed with Dr Gurung as its head did not take the full shape. It became a one-man defunct body. After Dahal left, Madhav Kumar Nepal took over the reins. At that time also, smaller parties like ours have been constantly telling the bigger parties to meet this constitutional provision.<br />
	 </div>
<div style="text-align: justify;">
	The responsibility of the state committee is to analyse the question of federalism and suggest the federal model that would be suitable for Nepal. It also has to suggest the number of states, their boundaries and so on. This is one issue which we have been raising in the parliament, i.e. the Constituent Assembly, as well as in our interactions with the bigger parties. However, they have consistently ignored it. When madhav Nepal was the Prime Minister, I don’t know if he ever tried to push this process forward. Most of the time, his government and the Maoists were at loggerheads with each other. There was no real initiative to draft the constitution. They spent their energy in the struggle for power. That is the reason why the state restructuring commission has not been formed yet. In fact, it was not an agenda of priority for the Maoists, Nepali Congress and the UML.<br />
	 </div>
<div style="text-align: justify;">
	They simply ignored this issue. Now, after the year-long extension of the Constituent Asembly, normally one would expect them to try and form this committee. However, they have ignored this again and we are now left with only two-and-a-half months from the deadline for promulgating the constitution. And still there is no seriousness about satisfying this constitutional provision. This is a sad story, to say the least. Now, the Maoists are saying that it doesn’t make any sense to form the state restructuring commission because the thematic committee working on state restructuring has already come out with its report. But what we have been saying is that this is a constitutional provision. If this provision has to be ignored, then people must prepare a proposal, make a constitutional amendment, take it to the parliament and remove this article from the constitution. As long as this article is there, we have to make sure that we honour it. I am sure this is an issue that will come up in our subcommittee meeting soon.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>So, it would not be possible to go ahead with the state restructuring without the commission’s report?</strong></div>
<div style="text-align: justify;">
	The state restructuring commission has to submit its recommendation before we make a final decision on state formation in this country and on the number and size of the provinces and many other issues related to federalism. We cannot ignore this constitutional provision. The responsibilities of the committee are to advice and provide suggestions.<br />
	 </div>
<div style="text-align: justify;">
	The constituent assembly has a right to either reject or accept them. Therefore, we must give them the opportunities as specified in the constitution. I think if we go about deciding the number of states without the commission’s recommendation that would be ignoring the provision of the constitution. It would neither be proper or correct nor acceptable.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Why has there been no meaningful debate held so far for state restructuring?</strong></div>
<div style="text-align: justify;">
	It’s because different political parties have different propositions. Their formal proposition is different from what they say in informal interactions. This is also the part of the problem. I think if we have a state restructuring committee, it would help solve some of these contradictions. There has not been serious debate among the political parties primarily because the three major political parties have not given attention to this issue. They are involved in power struggle all the time and busy speculating on who would be the next prime minister. In a way, it is their sense of irresponsibility and negligence towards the commitment made to the people when the constituent assembly elections were held.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Which model of fiscal federalism would be most appropriate for Nepal?</strong></div>
<div style="text-align: justify;">
	It is the question of devolution of authority. One of the more important aspects of this is the financial authority. Till now, Nepal has been a centralised state. Most of the resources are collected by the central government. Now, we want to make sure that we devolve fiscal authority to states and also to the village development committees (VDC) so that they can raise resources on their own. I personally think that if the central government raises 60 per cent resources, remaining 40 per cent would be raised by the local government bodies, states and the VDCs.&nbsp;We have to work along the line of fixing such a ratio. I think 60:40 ratio would be quite logical.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you see the danger of improper distribution of revenue in federal Nepal as the source of revenue would not be uniform in all the states?</strong></div>
<div style="text-align: justify;">
	I think we also need a financially strong central government. This is because, inevitably, some provinces are going to be financially weak. They may have the resources but these are largely unexploited. For example, in the hilly areas, hydro resources are there but it will take time to exploit them.In the mean time, we will have to find a way to compensate them for the lack of resources. That needs transfers from the central government.</div>
<div style="text-align: justify;">
	It will work out depending on population, human development index and so many other relevant variables. We have to give a sense of equity and justice to people in all the provinces of this country.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>The idea of ethnicity based federal structure has courted big controversy. How does ethinicity-based federal structure fare in terms of fiscal federalism?</strong></div>
<div style="text-align: justify;">
	There is a big controversy on this issue. No doubt about that. Different political parties have recommended number of provinces varying from seven to 14. One of the remarkable things is that no particular ethnic group is in the majority in their proposed respective states. Take the case of Limbuwan, for example. In Limbuwan, you have a total of 30 to 35 per cent Rais and Limbus if you combine both the communities. The rest 60 to 70 per cent are non-Limbus. Therefore, to go ahead with the idea of ethnic states, in a way, might alienate the other majority population and may create ground for conflict.<br />
	 </div>
<div style="text-align: justify;">
	The important thing is representation in the provincial and national parliament in line with the ethnic distribution. We have to assure and be clear on that point. Once you achieve that, I don’t think we should stress too much about this ethnic issue. People want representation in the power structure. And that representation must reflect the underlying distribution of the ethnic population. Once there is the electoral system, it makes sure that the ethnic representation is there in line with their ethnic distribution of population in the country. I think it would solve a lot of problems. Once you move in this direction, emphasis on ethnicity alone is going to wield less importance.</div>',
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	(int) 8 => array(
		'Article' => array(
			'id' => '266',
			'article_category_id' => '38',
			'title' => 'The Importance Of Enterprise  Performance Management',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<i><img alt="anil" border="1" hspace="5" src="http://newbusinessage.com/ckfinder/userfiles/Images/1303899771.jpg" style="width: 105px; height: 156px;" vspace="5" /><br />
	<br />
	<strong>By Anil Neupane<br />
	</strong><br />
	</i></div>
<div style="text-align: justify;">
	Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities necessary to reach those objectives. It is often referred to, with the usage of terms such as Corporate Performance Management (CPM), Financial Performance Management (FPM) and so on. It comprises Strategy Management, Profitability and Cost Management, Business Planning, Financial Consolidation, Spend, Supply Chain and other operational performance areas. EPM aligns the processes, systems, and metrics needed to measure and manage the performance of an organisation.<br />
	<br />
	EPM supports both cost optimisation and growth initiatives. It is a suitable fit for nearly all organisations and should be a priority initiative for CFOs to enable finance function to deliver short and long-term strategic benefits to businesses.<br />
	<br />
	It is considered as a diagnostic tool to monitor the pulse of an organisation by using a set of processes, frameworks, and systems for activities such as planning, measuring, communicating, and monitoring business results. Enterprises typically link these activities to corporate strategies and objectives and might drive them down to many individuals within the organisation to encourage accountability and control. Forrester defines business performance solutions as a category of purpose-built software applications that support these activities. The major BPS functional elements include:<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Strategy and performance measurement address goals, objectives, and accountability<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	A strategy management application supports formal strategy management philosophies (eg, the Balanced Scorecard) but might be adapted to a business’ specific needs. Applications often display the strategy definition in visual strategy maps. Scorecards measure progress against the goals and objectives set forth in the strategy framework. Performance dashboards display more detailed information and allow drilling down to root-cause detail. Dashboards typically include a variety of key performance indicators (KPIs) that might include strategic scorecards as well as relevant comparisons against plans, budgets, forecasts, prior performance, and industry benchmark data.</div>
<div style="text-align: justify;">
	<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Planning, budgeting, and forecasting solutions support multiple forward-looking processes</strong></div>
<div style="text-align: justify;">
	Although used almost universally as a control on spending, budgeting often falls short in supporting performance initiatives often as a result of some rigorous and inflexible process and not necessarily due to a software shortcoming <i>per se</i>. Fortunately, in addition to budgeting, the planning solutions support a variety of scenario-based planning activities as well as forecasting processes that add value beyond which is provided by <img align="left" alt="enterprices" border="1" height="259" hspace="10" src="http://newbusinessage.com/ckfinder/userfiles/Images/epm.jpg" style="width: 477px; height: 259px;margin:10px;padding:10px;" vspace="10" width="477" />traditional budgeting processes.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Cost and profitability management provides detailed analysis to improve margins.</strong></div>
<div style="text-align: justify;">
	This complex modelling activity helps organisations analyse development, production, and operating costs against revenues by product, customers, and lines of business. Cost and profitability management applications often use activity-based costing as the methodology to develop sophisticated cost and profitability analytical models.</div>
<div style="text-align: justify;">
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Financial reporting and consolidation produce financial statements.</strong> Financial reporting and consolidation applications produce reports focused on delivering financial statements based on accounting results. Statutory consolidations support regulatory compliance and generally accepted accounting principles (GAAP) requirements. These applications also support internal reporting of financial information.</div>
<div style="text-align: justify;">
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why are companies after it globally?</strong></div>
<div style="text-align: justify;">
	Despite the economic downturn and a global decline in overall IT spending of approximately 3 per cent, spending on CPM Suites remained positive (growing at 3.6 per cent in 2009). Through the last 24 months of economic uncertainty, EPM has helped to manage cost optimisation efforts, but through 2010, many more EPM initiatives were justified on the basis of supporting growth strategies. Furthermore, many of the stalled or sidelined EPM initiatives that did not advance in 2009, were reinstated during 2010.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	With economic downturn during the last few years, companies around the world are more focused on cutting costs and increasing performances. Therefore, EPM has been their major focus to achieve this objective and to have a better understanding of the drivers of corporate profitability.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	Although awareness of the EPM concept has become more widespread, according to an estimate, 40 per cent of large enterprises and as much as 75 per cent of midsize businesses are using spreadsheets or legacy applications to meet their core management processes for BP&amp;F, financial consolidations and financial reporting.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>SAP EPM Suite<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	SAP is a global leader in EPM products. SAP recognises the importance of supporting these functions for an enterprise by establishing a new cross-functional unit, focusing on business performance optimisation. This unit brings together integrated technology and product portfolio with the people, ecosystem partners, and best practices specifically designed to help organisations drive business performance, manage risks and optimise the financial value chain. SAP Business Objects and EPM&nbsp;solutions bring together a set of applications that combine strategic goal-setting linked to effective budgeting and reporting, with additional abilities to analyse profitability. Similarly, SAP Business Planning and Consolidation (SAP BPC) is another tool that is dominating the global EPM suite market.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	The major strength of SAP is its dominance in ERP market and its support base around the globe. Lately, SAP has an implementation partner in Nepal as well.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM and Business Intelligence</strong></div>
<div style="text-align: justify;">
	It is sometimes confusing to distinguish between business intelligence (BI) and EPM. The major reason behind this is because different vendors define these terms in different ways. In general context, business intelligence supports EPM tools to achieve results. In terms of strategy, Business Intelligence offers the tools necessary to improve decision-making, but not linked to organisation’s strategy. On the other hand, EPM provides a closed-loop support: linked to strategy through CSFs and KPIs. In terms of purpose, the BI tool helps organisations set and monitor their goals whereas EPM tools help organisations guide their business towards its goals. The scope of BI may be limited to one or more departments or functional areas whereas the scope of EPM is for the entire enterprise.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	As shown in the figure above, EPM forms the higher level of pyramid whereas BI sustains the EPM processes as a supporting tool.<br />
	<br />
	 </div>
<div style="text-align: justify;">
	<strong>EPM in terms of Nepal<br />
	<br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	As in the case of companies around the world, most companies in Nepal still use spreadsheets or legacy system for financial planning, budgeting and consolidation. Due to this, the predictions are often time consuming, inflexible and inaccurate. Unlike few years back when there were very little EPM tool options in Nepal, now the country already has a SAP implementation partner. Therefore, companies now have opportunities to implement best EPM tools, like SAP EPM or SAP Business Planning and Consolidation. This shall greatly help business companies distinguish themselves from their competitors.<br />
	<br />
	<strong><br />
	</strong></div>
<div style="text-align: justify;">
	<strong><i>(Neupane is a SAP global certified consultant currently working in London. He can be reached at neupane_anil@hotmail.com)</i></strong></div>
<div style="text-align: justify;">
	<strong><br />
	<br />
	</strong></div>',
			'published' => true,
			'created' => '2011-04-27',
			'modified' => '2013-05-24',
			'keywords' => '',
			'description' => 'Enterprise performance management (EPM) refers to an integrated management approach that links strategic goals directly to the operational and financial activities.....',
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	(int) 9 => array(
		'Article' => array(
			'id' => '265',
			'article_category_id' => '39',
			'title' => 'Healthcare Technologies: Promoting Personal Wellbeing',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Vineet Kumar Tulshyan.jpg" style="width: 218px; height: 168px;" vspace="2" />Vineet Kumar Tulshyan</b></div>
<div style="text-align: justify;">
	Director</div>
<div style="text-align: justify;">
	Healthcare Technologies Pvt Ltd</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Incorporated in 2001, Healthcare Technologies Pvt Ltd has come a long way since. With an annual turnover of Rs 80 million, it has targeted a growth of 15-20 per cent for 2011. Beginning with importing medical equipments in 2001, the company set up a Personal Healthcare Division in 2008. “Given the immense potential for its market in Nepal, we hope that the industry size grows by 1000 per cent,” says Vineet Kumar Tulshyan, the Director of the company. He adds that this tremendous growth can be realised by spreading awareness about personal healthcare. While the expected market is worth a whopping Rs 500 crores, Tulshyan says the current sales of personal healthcare products in Nepal are mere Rs 2-3 crores.<br />
	 </div>
<div style="text-align: justify;">
	Run by a group of young and experienced professionals with core interests in the healthcare sector, the company focuses its efforts in specialised areas. The primary objective of Healthcare Technologies is to deliver qualitative medical products and services to the health professionals in Nepal. It has been active in the healthcare sector in different forms and areas. The company imports and distributes medical and surgical equipments, surgical goods, personal healthcare items, laboratory products etc. Its medical equipments are received well in the private sector entities while it is the market leader in personal healthcare products. “Our Microlife range of products enjoy 50 per cent market share,” informs Tulshyan.<br />
	 </div>
<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/corporate focus1.jpg" style="width: 266px; height: 166px;" vspace="2" />Healthcare Technologies caters its products to government institutes and organisations, pharmaceuticals companies, hospitals, medical colleges, nursing homes, INGOs and NGOs among others. It has a nationwide distribution network which carries out the work in the most professional manner possible. With its distribution channel in place all over Nepal, it has registered a rapid growth in the last three years.&nbsp;The company had a group turnover (Medical Division) of approx US$ 1.7 million in the last financial year, a growth of nearly 80 per cent. Besides the Kathmandu Valley, the company distributes its products through its dealer network in Butwal, Bhairahawa, Pokhara and Birgunj in central Nepal. Similarly, it has dealers in Nepalgunj in western Nepal and Janakpur, Biratnagar and Dharan in eastern Nepal. The company also indulges in direct marketing to hospitals and nursing homes.<br />
	 </div>
<div style="text-align: justify;">
	A total of 15 people are employed with the company under the medical division. Tulshyan says, “I have inculcated a culture in my colleagues that if the company grows, it benefits the employees too.” Healthcare Technologies was recognised by the Nepal Radiological Society in 2009 for its contributions. As part of its corporate social responsibility initiative, it has donated equipments such as Blood Pressure Machines and Thermometers to NGOs and charity hospitals. The company’s mission is to promote personal healthcare system in Nepal. Tulshyan reiterated that spreading awareness is crucial. “In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions, in time,” says he.<br />
	 </div>
<div style="text-align: justify;">
	Tulshyan owes his company’s success to being honest with products and customers. Irrespective of temptations, he does not recommend sub-standard products, he explains. As part of the company’s future endeavours, he plans to manufacture surgical products and start exports in five years time if the government rules and regulations favour the business environment. He says that government support is absolutely important for the sector to flourish.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Healthcare Technologies and its sister concerns</strong></div>
<div style="text-align: justify;">
	1)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Healthcare Technologies Pvt Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>DeVilbiss Healthcare –</b> Portable Oxygen Concentrator and Respiratory Items (5 litre Compact Oxygen Concentrator, IGO Portable Oxygen Concentrator, IFill Personal Oxygen Station, CPAP &amp; Bilevel CPAP)</span></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Microlife AG (Switzerland) –</b> Hypertension and Fever Management Products (Digital Blood Pressure Machine, Aneroid Blood Pressure Machine &amp; Stethoscope, Digital Thermometer)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Bayer HealthCare – </b>Diabetic Care Division</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>AMPall (Korea) – </b>Syringe and Infusion Pumps (Syringe Pump SP-8800, Infusion Pump IP-7700)</div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; <b>Mitsubishi Electric – </b>Video Thermal Printer and Paper</span></div>
<div style="text-align: justify;">
	2)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sun Medical Concern:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Technologies (Medical Equipments)</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>GE Healthcare – </b>Diagnostics (Contrast Media)</div>
<div style="text-align: justify;">
	3) Sun Exim:Manufacturer, Importer and Exporter of Medical Recording Paper</div>
<div style="text-align: justify;">
	4)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical Associates Services Pte Ltd:</span> Exclusive Distributor of</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; <b>Hitachi Air Compressor</b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Thermax Ltd </b>(India)</div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; TAS Medical Gas System </b></div>
<div style="text-align: justify;">
	<b>&nbsp;&nbsp;&nbsp; Grundfos </b>(Denmark)</div>
<div style="text-align: justify;">
	5)<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Care Plus:</span>Branded Personal Healthcare Product showroom in the heart of Kathmandu City</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	Strengths</div>
<div style="text-align: justify;">
	Ø Quality of Products</div>
<div style="text-align: justify;">
	Ø Immediate After Sales Service</div>
<div style="text-align: justify;">
	Ø Engineer available on Hotline</div>
<div style="text-align: justify;">
	Ø Competitive Prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Weaknesses</div>
<div style="text-align: justify;">
	Ø Belief in honesty (Tulshyan says he doesn’t bribe to get business)</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Opportunities</div>
<div style="text-align: justify;">
	Ø Spreading awareness</div>
<div style="text-align: justify;">
	Ø Small health centres outside Kathmandu Valley</div>
<div style="text-align: justify;">
	Ø Largely unexploited market</div>
<div style="text-align: justify;">
	Ø Free BP check up camps in cities and small towns</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Threats</div>
<div style="text-align: justify;">
	Ø Low quality products</div>
<div style="text-align: justify;">
	Ø Unhealthy competition</div>
<div style="text-align: justify;">
	 </div>',
			'published' => true,
			'created' => '2011-04-27',
			'modified' => '0000-00-00',
			'keywords' => '',
			'description' => '“In Nepal, spreading awareness about personal healthcare is crucial. In order to live healthy, people must use quality products as it helps them know where they stand medically and take necessary precautions,in time.”',
			'sortorder' => '191',
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	(int) 10 => array(
		'Article' => array(
			'id' => '264',
			'article_category_id' => '39',
			'title' => 'CG Education:Taking Education Beyond Classroom',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Bhushan Gurung.jpg" style="width: 197px; height: 141px;" vspace="2" />Bhushan Gurung</b></div>
<div style="text-align: justify;">
	GM</div>
<div style="text-align: justify;">
	CG Education</div>
<div style="text-align: justify;">
	“We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Encouraged by its spectacular growth in recent times, CG Education aims to have 10,000 students by 2015 under its umbrella. It encompasses schools from pre-school to mainstream schooling under both CBSE and HSEB boards. Ranging from kindergarten to post-graduate level, it plans to expand its reach and create facilities at all major cities in the country. Bhushan Gurung, the GM of CG Education asserts, “We believe in a system which is holistic and all encompassing. We envision learning which is self motivated, pragmatic and related to the present context. Our mission is to build an education brand synonymous with quality, scale and dynamism in Nepal.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The organisational vision is to be an integral part of the educational revolution and deliver quality to its students. “Our contribution will not only synergise the vibrant educational sector of the nation but will also activate others to follow suit,” adds Gurung. It was part of the strategic plan of Chaudhary Group, the parent company, to balance its investment portfolio between manufacturing and service sectors. CG Education is one venture that strengthens the group’s foray in the service sector where it sees a tremendous growth potential. More importantly, the society at large – students, government and the nation – will benefit from this gigantic effort.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	CG Education’s investment in its present portfolio of schools, colleges and institutes is over Rs 100 crores. This is spread over its flagship ‘The Chandbagh School’ with likely additions in Pokhara , Butwal and the ‘DPS School’ in Birgunj. The latest entrant under its flagship is ‘The Chandbagh Pre School’, a Montessori system based school for children up to six years of age. It envisages acquiring about 25 schools and institutions and bring them under the CG Education fold. The organisation also plans to work on a public-private partnership with Nepal Government on operating many government educational institutions. It hopes that this will result in a total enhancement of quality of these institutions in terms of faculty, infrastructure and management.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Chaudhary Group believes that high quality affordable education is the key to Nepal’s development. Based on the experience gained from running The Chandbagh School successfully in Kathmandu and with a desire to replicate and move to the next level, it entered into a joint venture with Manipal K-12 Education. The venture offers management services to existing and new schools under the brand name CG-Manipal Schools. It also offers <img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/cg edu.jpg" style="width: 349px; height: 164px;" vspace="2" />ICT-based School learning solutions and tutorials. “The CG-Manipal Schools is a logical extension of the Manipal Group’s strength in education and CG’s new initiatives in the field of education,” says Gurung. The schools are designed to use the right combination of technology and pedagogy for an effective learning process.&nbsp;Manipal K-12 is part of Pearson Education, the largest educational resource providing organisation in the world. In recent times, CG-Manipal has acquired the highly successful Campion Institutions namely Campion School-Lagankhel, Campion Academy-Lagankhel, Campion Kathmandu Higher Secondary School-Gahanapokhari and Campion College-Kupandole.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong><i>Digi</i> Classrooms</strong></div>
<div style="text-align: justify;">
	Involved in various educational activities in Nepal since 1996, CG Education has now initiated efforts to establish <i>Digi</i> Classrooms in the educational institutions of the country. It is a cognitive learning approach and is a widely accepted theory on the learning process. “CG Education is now taking an initiative to establish <i>Digi</i> Classrooms in the educational institutions of Nepal,” Gurung proudly states. CG Education wanted to introduce a new approach where students can understand better and retain new information and hence, the effort. <i>Digi</i> Class’s multimedia contents include audiovisual aids, demonstrations, simulations, rhymes, games, activity sheets, eBooks, 3D interactivity, and patterns which help teachers teach the students in a better way and make them understand better. The content support for digital classes is from Manipal K-12. The curriculum is as per the needs and requirements of boards such as CBSE and SLC/HSEB. The product is available in a hassle-free way under Single Window Service.<br />
	 </div>
<div style="text-align: justify;">
	The schools associated with CGEducation have already implemented ICT-enabled classes.<br />
	 </div>
<div style="text-align: justify;">
	<strong>CG Polytechnic</strong></div>
<div style="text-align: justify;">
	With the intention to develop skilled human resource for Nepali Industries and for better employment opportunities, CG Polytechnic aspires to be the backbone of country’s skill inventory. The Chaudhary Group of industries and Manmohan Memorial Polytechnic (MMP) have jointly launched a technical training programme at CG’s industrial village - CUG in Nawalparasi from September 2009 offering technical courses on mechanical and industrial faculties. The training includes both theory and practical classes in various technical subjects which is tailor made to meet industrial requirement.&nbsp;The main objective of the training is to bring significant improvement in human skill matrix of the organisation.<br />
	 </div>
<div style="text-align: justify;">
	&nbsp;CG Polytechnic is building its capacity to diversify into food technology, accountancy and many other sectors on the need assessment. To be more customer-oriented, it reaches different relevant stakeholders for need analysis as well as maintaining quality of education. In the very near future, CG Polytechnic will become a landmark where technical skills get honed to the highest level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Accreditation and Affiliation</strong></div>
<div style="text-align: justify;">
	CG Education wants to contribute in all streams of education with the aim to be acknowledged as an institution with complete educational solution. Apart from managing schools and colleges, CG Education is involved in the vocational sector as well. With this objective, it has joined hands with renowned educational institutions of the world. Its international affiliations and accreditations include CBSE Board, ‘A’ Level Cambridge University besides the joint venture with Manipal K-12. CG Education’s association with other educational institutions is intended to derive quality from their years of experience in mainstream education. It is also in the process of obtaining accreditation and affiliation with ISO, IB, ETS, ESOL and other renowned educational institutions and agencies.</div>
<p style="text-align: justify;">
	CG Education’s ultimate vision and mission is to impart world class holistic education and produce educated citizens equipped to meet international standards.</p>',
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			'main_news' => false,
			'in_scroller' => false,
			'user_id' => '0'
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	),
	(int) 11 => array(
		'Article' => array(
			'id' => '263',
			'article_category_id' => '39',
			'title' => 'Leon Motors:Recreating Mitsubishi Magic',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<b><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Ashish Shrestha.jpg" style="width: 246px; height: 176px;" vspace="2" />Ashish Shrestha</b></div>
<div style="text-align: justify;">
	Executive Chairman</div>
<div style="text-align: justify;">
	Leon Motors Private Limited</div>
<div style="text-align: justify;">
	“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors Private Limited is the authorised sub-distributor in Nepal for Mitsubishi Motors Corporation, Japan and Mitsubishi Fuso Group, Japan. The company started importing Mitsubishi vehicles in 2008 and has sold over 150 units so far. 2010 was its most productive year in which it sold 70 units. The vehicles sold by the company fall on different price points ranging between Rs 4 million and Rs 12 million.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Motors is the brainchild of its dynamic Executive Chairman Ashish Shrestha. Coming from a family that has traditionally dealt in gold for generations, Shrestha holds an MBA degree from American InterContinental University in United Kingdom. After returning to Nepal in 2006, he wanted to establish a business that suited his personality and justified his management acumen. And thus, Leon Motors came into being in 2007. It is currently focused on reviving the brand image of Mitsubishi Motors. The brand lost its charm and took a beating in the Nepali market due to non-availability of new models from 1998 till 2006. Shrestha says, “A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.” He believes that 236 per cent duty on importing vehicles is astronomically high and plagues Nepali automobile market to a large extent. The company plans to revive Mitsubishi Fuso trucks and buses in 2011 to achieve its targeted growth of 10 per cent.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Shrestha rues the unhealthy competition that exists in the automobile market. According to him, a number of automobile companies in Nepal under-invoice their transactions which helps them to dodge the tax and reduce the retail price or increase their profit. He strongly believes that this unethical practice needs to be stopped as it creates unfair competition in the market. To make his point strong, Shrestha proudly shows a certification from TRACE Inc, a US based internationally recognised organisation promoting transparency and anti-bribery compliance in international business transactions.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	The company practices an ‘open door policy’ where the employees have direct access to Shrestha for any matter they need to discuss, be it a suggestion or a complaint. An outsider might as well feel that it’s a family run business. That’s the level of camaraderie which exists between the employees at Leon Motors. As part of its CSR (Corporate Social Responsibility) initiative, the company supports an NGO, Society Developer Nepal with its endeavour in providing education for underprivileged children.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Leon Auto Works is the sole authorised after-sales and service centre for Mitsubishi Motors Corporation and Mitsubishi Fuso Group. Besides this servicing arm of Leon Motors Private Limited, there are a number of group companies <i>(see box)</i>.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	This group of businesses employs more than 50 people on a permanent basis and considers itself blessed to have a dedicated workforce, many of whom have been involved in their jobs for years now. Shrestha believes that the market is circled with inflated prices, for example, unreal values of real estate holdings. He adds that this coupled with political instability are the major reasons behind people refraining from making investments in the country. On an optimistic note, however, the group plans to enter hospitality business by establishing boutique hotels. It is currently scouting for properties in Kathmandu and Pokhara and seeks to contribute towards Nepal’s tourism prospects. On a personal note, Shrestha has the burning desire in him to bring more hydropower projects to Nepal. He hopes to succeed in convincing investors to do so as it promises to put the country back on track to attain sustainable development. n</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Sister concerns of Leon Motors Pvt Ltd</div>
<div style="text-align: justify;">
	<b>1.&nbsp;Leon Global Private Limited (Trading) </b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; A successful trading house, it has represented an impressive list of international organisations on turnkey projects in Nepal. The company promotes development related projects in the tourism and civil aviation sector, establishment of industries, construction of hydropower projects, supply of communication equipments etc to Nepalese Army, Nepal Telecom and Civil Aviation Authority of Nepal and supply of construction equipments to the Ministry of Physical Planning &amp; Works among others.&nbsp;It is extensively involved in liaison work and promotional activities and provides complete local support during pre and post tendering periods.<br />
	 </div>
<div style="text-align: justify;">
	<b>2. Leon Hager International Private Limited (Distribution)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp; It is into distribution business representing various international beverage companies around the world. It currently imports and distributes alcoholic and non alcoholic brands such as ‘Nite’, a ready-to-drink (RTD) product from Thai Spirit Industry Co Ltd, Thailand; ‘Ignite’, a vodka based RTD product from Ignite Corp Pty Ltd, Australia; ‘Jugular’ and ‘Rock’ energy drinks from Jugular Global Pacific Ltd, Australia; ‘Victoria Bitter’ – Australia’s highest selling beer – popularly known as VB from Foster’s Group and rich and robust cooking wines from Australia and France among other European countries.<br />
	<br />
	</span></div>
<div style="text-align: justify;">
	<b>3. Green City Development Private Limited (Township Development)</b></div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; This company was established in 2007 along with the leading business houses to develop first-of-a-kind township within the Kathmandu Valley. It plans to build a township covering approximately 387 acres of land with all modern amenities one can think of. Currently, the company is busy purchasing land at the site of the planned project. While it hopes to complete its land acquisition deals by this year end, the project plan and design is being prepared by a Singapore-based firm.<br />
	 </div>
<div style="text-align: justify;">
	<b>4. Ivory International Private Limited (Construction)</b></div>
<div style="text-align: justify;">
	<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Involved in construction business, it has tied up with a leading Chinese construction company, China Railway Engineering Group Co Ltd. This joint venture has been constructing various projects that include commercial buildings, hospitals, hotels, apartment buildings, super malls, roads, bridges, hydropower plants and many more.</span></div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	SWOT Analysis</div>
<div style="text-align: justify;">
	<b>Strengths </b></div>
<div style="text-align: justify;">
	*Strong management team</div>
<div style="text-align: justify;">
	*Prime location (Shantinagar, New Baneshwor)</div>
<div style="text-align: justify;">
	*Famous brand name</div>
<div style="text-align: justify;">
	* Innovative ideas</div>
<div style="text-align: justify;">
	<b>Weaknesses</b></div>
<div style="text-align: justify;">
	* Branding hiatus between 1998-2006</div>
<div style="text-align: justify;">
	* Lack of a state-of-the-art showroom</div>
<div style="text-align: justify;">
	<b>Opportunities</b></div>
<div style="text-align: justify;">
	* Impending expansion</div>
<div style="text-align: justify;">
	* Sports models</div>
<div style="text-align: justify;">
	&nbsp;&nbsp;&nbsp; (small hatchback cars by 2011 end)</div>
<div style="text-align: justify;">
	<b>Threats</b></div>
<div style="text-align: justify;">
	*Too many players in the market</div>
<div style="text-align: justify;">
	* Unhealthy competition</div>
<div style="text-align: justify;">
	* Competitors’ prices</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	Mitsubishi Products in Nepal</div>
<table border="1" cellpadding="1" cellspacing="1">
	<tbody>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Mitsubishi Pajero</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Pajero Sport</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Outlander</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Active Smart X-SUV (ASX)</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					L200 Sportero</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					L300</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Lancer Ex</div>
			</td>
		</tr>
		<tr>
			<td style="text-align: justify;" width="28">
				*</td>
			<td width="172">
				<div style="text-align: justify;">
					Rosa</div>
			</td>
		</tr>
		<tr>
			<td width="28">
				<div style="text-align: justify;">
					*</div>
			</td>
			<td width="172">
				<div style="text-align: justify;">
					Heavy Duty Trucks &amp; Buses&nbsp;</div>
			</td>
		</tr>
	</tbody>
</table>
<p style="text-align: justify;">
	 </p>',
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			'description' => '“A little over a decade ago, Mitsubishi Pajero was the synonym for an SUV (Sports Utility Vehicle). That perception changed during the quiet period of eight years but we hope to bring back the lost glory of yesteryears.”',
			'sortorder' => '189',
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	(int) 12 => array(
		'Article' => array(
			'id' => '261',
			'article_category_id' => '38',
			'title' => 'Japan’s Earthquake:A Global Wake Up Call',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<span><img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/Dr Jagadish Ghosh.jpg" style="width: 106px; height: 134px;" vspace="2" />Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.</span></div>
<div style="text-align: justify;">
	<i>By Dr Jagadish Ghosh</i></div>
<div style="text-align: justify;">
	<b>&nbsp;</b></div>
<div style="text-align: justify;">
	'After three years, even a disaster can be good for something’ goes a Japanese proverb. But in the midst of this appalling devastation, it might be obscene to suggest that a disaster of this magnitude could possibly be turned into good for something. Evidently, time and again, not only the human spirit but also the laws of economics have proved amazingly resilient in the face of the most terrible of adversities. The widespread destruction has been taken as a challenge and an opportunity to rewrite the triumphant history of growth and development with renewed spirit and zeal. The destruction spurs reconstruction and acts as a stimulus for economic enterprise.<br />
	 </div>
<div style="text-align: justify;">
	A ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan’s east coast on 11 March 2011 sweeping away boats, cars, homes and people as widespread fires burned out of control. The magnitude 8.9 offshore quake places the earthquake as the fifth largest in the world since 1900. It is also the largest in Japan since modern instrumental recordings began 130 years ago. The two disasters were followed by the damage at nuclear reactors threatening harmful radiation. Japanese Prime minister Naoto Kan has described the catastrophic combination of earthquakes, tsunami and nuclear meltdown as the biggest crisis the country has had to face since the end of World War II.<br />
	 </div>
<div style="text-align: justify;">
	The quake caused a 400-km long and 160-km wide rupture in the earth’s crust as one tectonic plate dove under another off the coast of northern Japan. This led to an upheaval in the sea above it, sending a 30 foot wall of water racing up to 10 km inland in Japan and reaching California across the Pacific Ocean 10 hours later. Tsunami warnings blanketed the entire Pacific as far away as South America, Canada, Alaska and the entire US West Coast. The quake was followed by more than 20 aftershocks for hours, most of them of more than magnitude 6.0. As many as six reactors at the Daiichi nuclear power plant in Fukushima are facing crisis at one level or the other verging of N-disaster. The death toll was likely to continue climbing over 10,000 given the scale of disaster. But without minimising the tragedy in any way, the damage in terms of human lives has been remarkably contained relative to what might have been. For that, all credit must go to successive Japanese administrations and civil society. Situated on the ‘Ring of Fire’ – an arc of seismic activity around the Pacific Basin – Japan has been hit time and again by devastating earthquakes, from the one in Tokyo in 1923 to Kobe in 1995. But the Japanese have drawn their lessons from these. So they have the world’s most sophisticated earthquake early warning systems and an extensive tsunami warning sensor network. They have building codes that keep such exigencies in mind. Similarly, they have thorough disaster management plans at every administrative level.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Insured Losses<br />
	</strong></div>
<div style="text-align: justify;">
	The earthquake in Japan could lead to insured losses of nearly $35 billion, according to risk modelling company AIR Worldwide, making it one of the most expensive catastrophes in history. It is nearly as much as the entire worldwide catastrophe loss to the global insurance industry in 2010 and could be the triggering event that forces higher prices in the insurance market after years of decline. This temblor will go down as the costliest earthquake in modern history in terms of insured losses, surpassing the roughly $15 billion in losses of the 1994 Northridge earthquake in California.<br />
	 </div>
<div style="text-align: justify;">
	<strong>2010 – The Year of Earthquakes</strong></div>
<div style="text-align: justify;">
	The most devastating earthquake of the year with more than 220,000 deaths struck Haiti, a country that was in no way prepared for such an event. Chile and New Zealand, on the other hand, were very well prepared. As a result, the challenges presented for reconstruction and the insurance underwriting aspects must be assessed differently for different countries.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Scientific Analysis</strong></div>
<div style="text-align: justify;">
	On 12 January 2010, Haiti suffered the most devastating seismic catastrophe since the destruction of Tangshan in China in 1976. The quake, with a magnitude of 7.0, did not come as a great surprise for seismologists. The danger had been clearly stated in a scientific publication dated 2008. The epicentre of the quake which ravaged the capital Port-au-Prince and the surrounding area was located near the boundary between the North American and Caribbean plates. The Enriquillo-Plantain-Garden Fault, which was originally considered to form the quake’s epicentre, runs in an east-west direction here. The situation was further aggravated by the fact that the rupture in the earth’s crust propagated towards the capital from its hypocentre west of Port-au-Prince.<br />
	 </div>
<div style="text-align: justify;">
	The associated interference of seismic waves magnified the vibrations. Intensive geological and geophysical investigations after the quake have revealed a highly complex rupture process. It appears that a previously concealed blind thrust fault was also involved and interacted with the Enriquillo-Plantain-Garden Fault. This is of significance for the future earth quake potential in the Port-au-Prince area. It may be assumed that the stresses accumulated in the Enriquillo-Plantain-Garden Fault since the earthquakes of 1751 and 1770 were not fully released on 12 January. Moreover, the investigations have also shown that strong shaking was not restricted only to areas with soft, unconsolidated sediments. Due to the topography, it also occurred on a hillside in the Petionville district, south of the city centre.<br />
	 </div>
<div style="page-break-after: always;">
	<span style="display: none;">&nbsp;</span></div>
<div style="text-align: justify;">
	The Chilean earthquake six weeks later did not strike unexpectedly either. The strongest earthquake ever recorded by instruments worldwide with a magnitude of 9.5 had already occurred in the Valdivia/Puerto Montt region, on the boundary between the Nazca and South American plates, in 1960. To the north of this region, a magnitude 8.0 quake off the coast of Valparaiso caused damage all the way to Santiago in 1985. The area between these two rupture zones, however, had remained relatively quiet since 1835. This ‘seismic gap’ was filled by the Maule quake on 27 February, with a magnitude of 8.8.<br />
	 </div>
<div style="text-align: justify;">
	A third earthquake, which struck Qinghai province in Central China on 13 April, paled in comparison to these two major catastrophes. Its magnitude was similar to that of the Haitian quake and claimed roughly 2,700 lives. The earthquake which struck New Zealand’s South Island on 3 September attracted greater publicity. This was not due to its magnitude of 7.0, similar to that of the quakes in China and Haiti. What made this quake different was that, unlike the Haiti and Chile cases, an earthquake had not been expected here, 40 kilometres west of Christchurch. Experts had focused more on the Alpine Fault to the northwest which marks the boundary between the Indo-Australian plate in the west and the Pacific plate in the east. The Darfield earthquake (named after the town closest to the epicentre), however, occurred along a previously unknown fault system under the sediments of the Canterbury Plains. Unlike Port-au-Prince, the rupture proceeded away from the city in this case but the energy emitted was unusually high for a quake of this magnitude.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Why Haitian earthquake proved most devastating</strong></div>
<div style="text-align: justify;">
	Buildings of every kind – from representative buildings, such as the government palace and the Hotel Montana, to mud huts – were damaged more or less indiscriminately by the earthquake in Haiti. The corporate headquarters and production facilities of foreign companies remained structurally intact. Yet the few insured losses stemmed primarily from this sector. There are several reasons why the Haitian earthquake proved to be the most devastating ever in recent times, as expressed by the overall loss in relation to gross domestic product. Among others, they include the lack of building regulations, poor building material and a shortage of qualified labour as well as the absence of an institutional framework ensuring that construction projects are completed in an orderly fashion.<br />
	 </div>
<div style="text-align: justify;">
	The Maule quake in Chile was the first earthquake of high magnitude and correspondingly long duration (over 120 seconds) to test modern high-rise buildings. The high overall loss of US$30 billion was not caused by instability. Both the quality of Chile’s earthquake building code and its implementation are very good on a global scale. Only five of the 12,300 buildings erected since the last major earthquake in 1985 collapsed. Another 50 or so had to be demolished on account of massive structural damage. The magnitude of the overall loss is due above all, to the damage to non-structural elements in addition to the small number of major losses. Among other things, these include non-supporting walls, false ceilings and façade elements. Evidently, the building code must be updated in order to avoid or reduce the extent of such damage to property. In some cases, infrastructure also proved unexpectedly unstable as in the case of the motorway linking the international airport and the city of Santiago.<br />
	 </div>
<div style="text-align: justify;">
	In Chile, the load-bearing structure of mid-rise buildings (up to 20 floors) is primarily made up of shear walls parallel to the axis of the building. Compared with framed structures, such buildings are fairly rigid when exposed to seismic stresses. Newer buildings, however, tend to have thinner walls. The necessary transverse reinforcements also proved inadequate in some cases. Most of the few cases of major damage are attributable to such shortcomings. Low buildings with up to four floors are frequently built with confined masonry. In this case, the individual brick wall elements are connected by cast pillars of reinforced concrete. This type of construction has also proved to be very good.<br />
	 </div>
<div style="text-align: justify;">
	Since buildings with shear walls or confined masonry are more widespread in Chile than in other countries, the experience gathered there cannot simply be applied to other regions. Framed constructions prevail in the American Pacific Northwest Region (Oregon, Washington), for example. As for the earthquake mechanism, Chile provided a blueprint for a future quake at the Cascadia subduction zone where the Juan de Fuca plate is subducting under the North American continent from the west. Portland, Seattle and Vancouver are all about the same distance from the epicentre of a future earthquake as Santiago was from the February quake.<br />
	 </div>
<div style="text-align: justify;">
	In Christchurch, New Zealand, many residential buildings were damaged above all by collapsing chimneys. They frequently crashed through the roofs of homes, most of which were lightweight constructions. Many historical buildings of unreinforced masonry in the city centre also suffered significant damage. As in Chile, non-structural damage played a major part here, too. Unusually widespread soil liquefaction was one particular characteristic of the New Zealand quake. Near-surface sediment layers on the Canterbury Plains are particularly prone to this phenomenon, which causes extensive damage that is also difficult to repair, as the substrate settles to varying degrees during the liquefaction process, causing buildings to tilt.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Lessons for Nepal</strong></div>
<div style="text-align: justify;">
	Going by the past records, Nepal has been experiencing major quakes every 70-75 years. According to seismologists, Nepal ranks 11th among the 30 most quake prone countries in the world. In Nepal, the tectonic motion – the movement of plates in the Indian subcontinent towards Tibet – that caused the Himalayas to rise have also been causing buildings to collapse and cities get razed since the 13th century. And it is likely that Nepal would be faced with a similar situation in the near future, with Western and Central Nepal including the Kathmandu Valley the most prone to damage.<br />
	 </div>
<div style="text-align: justify;">
	The 1934 Quake, that devastated Bihar, measured 8 on the Richter scale, killing nearly 11,000 people and 20 per cent of the buildings in the valley. The National Seismological Centre of Kathmandu draws an apocalyptic version of the disaster: that it would kill more than 40,000 people and injure another 100-200,000 if it happens today. It would also destroy 60-70 per cent of the buildings and leave 60-70,000 people homeless. There is no such term as earthquake-proof as no building can be entirely safe from earthquakes. The actual term used is earthquake-resistant which means that the damage to life and property caused following an earthquake will be minimised.<br />
	 </div>
<div style="text-align: justify;">
	Establishment of the Disaster Preparedness Plan and Disaster Relief Plan makes a huge difference in earthquake-prone regions, when the catastrophes do occur as we have experienced in the two Latin American countries: Haiti and Chile. By comparing these countries to Nepal and taking a closer look at Nepal’s situation, it is evident that Nepal is in dire need of a strong mitigation plan.&nbsp;In Kathmandu Valley which is a former lake-bed, 2.5 million people live in poorly constructed buildings.&nbsp;Kathmandu has only one airport and three roads connecting it to the outside world. In the event of an earthquake, these roads are most likely to be damaged rendering them unfit for transportation. Nepal has a National Seismological Network comprising 21 short period telemetric seismic stations that started with the first seismometer set up at the top of the Phulchowki Hill, 14 km southeast of Kathmandu, in 1978. The Nepali Diaspora needs to come together and build a procedural mechanism to protect the country by setting up a Disaster Preparedness Plan, and a Disaster Relief Plan. The National Society for Earthquake Technology (NSET) - Nepal, established as a non-governmental and non-profit organisation in 1994, has been actively pursuing the earthquake risk and mitigation planning and earthquake awareness projects.<br />
	 </div>
<div style="text-align: justify;">
	Protracted political wrangling in Nepal is preventing a key piece of disaster preparedness legislation from reaching parliament. Though endorsed by the cabinet in October 2009, the National Strategy for Disaster Risk Management (NSDRM) has yet to be made into law. The passing of this bill is critical. Without this, the country’s disaster preparedness efforts cannot move forward.<br />
	 </div>
<div style="text-align: justify;">
	Development of better building codes, strict enforcement of the existing one, creation of disaster management plans and response bodies from the local level to the central must be ensured. Similarly, streamlining of relevant administrative machinery with funding, clearly demarcated jurisdiction and insurance awareness are measures that the government must take seriously. Unless these measures are taken, the cost of country’s lack of preparedness may turn out to be devastating. The right lesson to be drawn from events unfolding – a combination of righteous knowledge and righteous actions helps us for sustaining survival.</div>
<div style="text-align: justify;">
	<i>(Dr Ghosh is the CEO of National Insurance Company Ltd. This article is based on material provided from various sources including </i>Munich Re<i>)</i></div>',
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			'description' => 'Japan’s earthquake is a global wake up call concentrating on the importance of preparedness to respond to such disasters. What we need in our day of testing is preparation.',
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	(int) 13 => array(
		'Article' => array(
			'id' => '260',
			'article_category_id' => '38',
			'title' => 'HR Practices & Line Managers',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	The Line Managers in organisations play an important role in the development of its employees’ professional careers and encouraging their positive attitude. The organisations have recognised the advantages of the Line Managers’ involvement in learning and development process of its employees. Yet, most organisations have not worked towards educating human resource (HR) practices to them. It is becoming increasingly important to acknowledge that the Line Managers possess the potential to help change organisational environments for the better.<strong><br />
	<br />
	</strong></div>
<div style="text-align: justify;">
	<strong>Educating HR practices to Line Managers</strong></div>
<div style="text-align: justify;">
	The Line Managers should be educated on HR policies and HR functions such as performance appraisals, training identification etc. They should have the authority to track HR activities and report the same to the Human Resource Department (HRD).&nbsp;Correspondingly, the role of the HRD should be to make the Line Managers competent by providing communication training so as to help them communicate better with their subordinates. So, close interaction between the HRD and the Line Manager and giving them the authority is vital.<br />
	 </div>
<div style="text-align: justify;">
	Further, the Line Managers should be briefed on conducting appraisals effectively. Performance appraisals must be conducted to help employees maximise their respective potential for mutual benefit.&nbsp;For this purpose, it’s imperative that the Line Managers receive behavioural and communication training.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Management Review Meetings</strong></div>
<div style="text-align: justify;">
	The organisations must give due importance to management review meetings for the Line Managers. They are an important part of educating the Line Managers as they get to hold discussions with the management boards. This process helps taking timely and appropriate actions required for organisational development.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Job Description for the Line Managers</strong></div>
<div style="text-align: justify;">
	Developing guidance is another important aspect which helps the Line Managers perform better. The HRD must make them realise the importance of the organisational team. The relations between the HRD, Line Managers and other employees must complement each other. The inclusion of HR responsibilities in the Line Managers’ job description and coordination with the HRD for the employees’ performance enhancement would help formulate effective HR related activities. A complaint mechanism also needs to be developed as it can work as the reflection for change requirement.<br />
	 </div>
<div style="text-align: justify;">
	<strong>Counselling and Training</strong></div>
<div style="text-align: justify;">
	The Line Managers have to work closely with the employee so they must understand their human needs. For instance, an employee may be experiencing grief, tension or a personal problem. It may influence his end performance and weaken his retention prospect. In this scenario, the Line Manager’s counselling can influence the employee positively. A Line Manager’s positivity can rub on to the team and enhance its overall capability.<br />
	 </div>
<div style="text-align: justify;">
	The ability to inspire is not the easiest of qualities to develop. The Line Managers must be provided trainings, periodically, on people management and enhancing competencies of their team members. Such trainings can help them learn to be more competent to achieve common objectives.<br />
	 </div>
<div style="text-align: justify;">
	<strong>The Line Managers’ Leadership Role</strong></div>
<div style="text-align: justify;">
	Leadership plays an important role for a team to accomplish a common task. The Line Managers should lead the group of people and work towards enhancing their capabilities without getting insecure. The HR personnel cannot reach each employee most of the times. So, the Line Managers should be given adequate authority to make decisions, to a certain extent. When the Line Managers are given authority and responsibility, there is a tremendous possibility of increased productive output.<br />
	 </div>
<div style="text-align: justify;">
	The HRD should have a system which identifies the employees’ expectations from the organisations. It can then design the desired format and address it to the Line Manager.&nbsp;As a result, the Line Manager takes pride in the positive changes happening to his team members. The Line Managers play a vital role in ensuring that employees are mentored, motivated and feeling competent. The HRD can consider itself successful if employees are productive and contribute towards overall organisational growth. The employees’ successful careers within the organisation are a healthy sign of things to come. <br />
	 </div>
<div style="text-align: justify;">
	<i>(The write-up is based on an ‘HR Kurakani’ discussion on “Educating HR to the Line Managers”, on 29 December, 2010 conducted by Real Solutions Pvt Ltd. The participants at the discussion included Ayush Shah, ICTC Group; Robin Shrestha, Caritas Nepal; Sarika Amatya, Freelancer; Sharda Rana, Sipradi Trading Pvt Ltd; Shraddha Joshi, Standard Chartered Bank Nepal and Sujata Rijal, Echo Advertising Agency. Shailendra Raj Giri, the Managing Director of Real Solutions acted as the moderator for the discussion.)</i></div>',
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			'id' => '259',
			'article_category_id' => '31',
			'title' => '‘Fiat Punto And Linea Are Two Great Cars To Start Business With, In Nepal’',
			'sub_title' => '',
			'summary' => null,
			'content' => '<div style="text-align: justify;">
	<img align="left" alt="" border="2" hspace="2" src="http://newbusinessage.com/ckfinder/userfiles/Images/rajeev.jpg" style="width: 181px; height: 265px;" vspace="2" />Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview with <i>New Business Age</i>, Kapoor talked about Fiat’s market prospects in Nepal.&nbsp;Excerpts:</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>You are launching two models of Fiat cars here. What made you choose these two specific models?</strong></div>
<div style="text-align: justify;">
	These are excellent models and unique in terms of styling, safety and low pollution. We feel that Punto gives the right size and drivability options to small families. On the other hand, Linea is a sedan that is luxurious and has a huge boot space for carrying a lot of bags. It is a very stable car and practically won every award in India. Therefore, they are two very good vehicles to start business with, in Nepal.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is your observation of the market here? Is there any target sales of these two models?</strong></div>
<div style="text-align: justify;">
	I think we should be able to get around five percent of the market share with these two cars. Then depending on how the models perform here, we can plan an official strategy on introducing other models. We hope that the affordability for buying cars in this country grows. Because it will help us sell more units and give shape to a long-term plan here.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How are Fiat’s passenger cars doing in the Indian market?</strong></div>
<div style="text-align: justify;">
	Fiat is doing very well in India. We sold about 23,000 units last year. The Indian market is growing at around 13 to 14 per cent every year. We also want to grow correspondingly with the Indian market this year. We are already working on a small car to be launched in 2012 end or 2013 beginning. So a lot is happening in India. The market there is becoming very competitive. However, introducing Fiat models in Nepal is a different ballgame altogether because we are not restricted to bring models only from India.&nbsp;Depending on the need, we can introduce models directly from Fiat in Italy as well if the price is right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>How do you view the competition with other brands in the Nepali market?</strong></div>
<div style="text-align: justify;">
	Hyundai is dominantly the market leader in Nepal followed by Toyota and Maruti. There are a host of other brands too. Tata Motors, one of our joint venture partners in India, is also a major player here. The competition is definitely going to be there. And it’s always good to have competition as it makes us agile and focused on keeping the quality and the price parity right.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What are the challenges you foresee for the market here?</strong></div>
<div style="text-align: justify;">
	The most glaring challenge for us is that we are a late entrant.&nbsp;Others have been selling their cars for many years now and are established players. Therefore, we need to carve a niche here. This is why we have introduced these two cars that are absolutely different in touch, feel, look and safety. We need to immediately move forward. That is why instead of only launching the car, we have first worked on strengthening the after sales aspect of it.&nbsp;We have already set up a spare parts and service centre with all the tools required. It is our effort to make sure that customers get immediate after sales service. It’s important because for us, the customers come first. So, we are launching the car after setting everything else in place. The customers can buy our cars without worrying too much about after sales service and availability of spare parts.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>What is the market response for Fiat cars in the South Asian market compared to American and European markets?</strong></div>
<div style="text-align: justify;">
	Fiat has many established brands such as Alfa Romeo, Lancia, Maserati and Ferrari. Fiat is very strong in European markets, Brazil and even Turkey. Fiat is now venturing into China and Russia. Indian operation is already running steadily. It is also entering the US market now. A lot is happening in the automotive world. Due to the slowdown in the European, American and Japanese markets, the focus now is on countries like Brazil, Russia, India and China. So, Fiat is also eyeing these ‘action markets’.</div>
<div style="text-align: justify;">
	 </div>
<div style="text-align: justify;">
	<strong>Do you have any specific plans for the Nepali market?</strong></div>
<div style="text-align: justify;">
	We are reasonably focused on the Nepali market. We will be engaging ourselves in supporting our dealer here, Batas Brothers Motors, in all possible ways. We will make sure that besides the availability of spare parts and after sales service, we will make the latest models available here. We will make sure that when we plan a product, we will accordingly plan a strategy for Nepal too. I see a great future for Fiat in Nepal. This country is going to grow. As the infrastructure grows, there will be a requirement for more cars. And we want to be here and be a part of it. I can assure you that Nepal will always get the top line products here. </div>
<div style="text-align: justify;">
	 </div>',
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			'description' => 'Rajeev Kapoor, the President and CEO of Fiat India Automobiles Limited, was in Kathmandu recently for the launch of Linea and Punto cars in Nepal. In an interview......',
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$current_user = null
$logged_in = false
$xml = false
simplexml_load_file - [internal], line ??
include - APP/View/Elements/side_bar.ctp, line 133
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::_renderElement() - CORE/Cake/View/View.php, line 1224
View::element() - CORE/Cake/View/View.php, line 418
include - APP/View/Articles/index.ctp, line 157
View::_evaluate() - CORE/Cake/View/View.php, line 971
View::_render() - CORE/Cake/View/View.php, line 933
View::render() - CORE/Cake/View/View.php, line 473
Controller::render() - CORE/Cake/Controller/Controller.php, line 968
Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200
Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167
[main] - APP/webroot/index.php, line 117