Although it will take time for the dream to come true, Nepal and B'desh can exchange trade in energy through the BIMSTEC deal
President Bidhya Devi Bhandari returned home on Tuesday after concluding her two-day visit to Bangladesh, where she attended official programmes to mark the birth centenary of Bangabandhu Sheikh Mujibur Rahman, the father of Bangladesh.
She visited the South Asian nation as the chief guest to mark the 50th independence of Bangladesh, which has achieved robust economic growth in recent times. It may be recalled that Bangladeshi President Md Abdul Hamid had paid a visit to Nepal last year at her invitation. Bhandari, accompanied by Nepal's Foreign Minister Pradeep Gyawali, also paid a courtesy call on Bangladeshi Prime Minister Sheikh Hasina and discussed matters of mutual cooperation between the two South Asian nations.
During her visit, both Nepal and Bangladesh signed four bilateral instruments, namely Memorandum of Understanding (MoU) on Tourism Cooperation, MoU on Sanitary and Phytosanitary Cooperation, Cultural Exchange Programme, and Letter of Exchange to designate the 260-km-long Rohanpur-Singabad Railway route as an additional transit route to the sea. While the MoU on sanitary and phytosanitary cooperation between the two countries will be instrumental in treating plant and animal diseases, the new railway route from Rohanpur and Singabad will be shorter than the Kolkata seaport. As Chittagong seaport is very crowded, Nepal can benefit from the Rohanpur-Singabad railway route to import and export goods to and from third countries.
Although Nepal and Bangladesh are close neighbours and enjoy friendly relations, both the countries have not been able to reap economic benefits till date due to lack of connectivity by land. As Bangladesh is poised to become an economic powerhouse in Asia due to its competitive edge in the garment industries and the manufacturing sector, it will require huge amounts of energy to drive its economy forward.
In order to accelerate its economy, Bangladesh has proposed purchasing around 9,000MW of electricity from Nepal in 20 years and has also proposed making an investment to generate 1,500MW of electricity in eastern Nepal. This became possible thanks to an understanding reached between the two countries during the fourth BIMSTEC summit held in Kathmandu on August 30-31, 2018. The summit sought better connectivity among the member states through transport and communications, trade and investment and energy trade, among others. The BIMSTEC summit gave special emphasis to promoting renewable and clean energy sources, for which Nepal is in a better position compared to the other BIMSTEC nations. It also reached a MoU on grid connection to provide uninterrupted and affordable power supply to the region. In line with the fourth BIMSTEC framework, India also recently made necessary reforms in its energy directives, paving the way for an energy trade between Nepal and Bangladesh through its national grids. Although it will take time for the dream to come true, Nepal and Bangladesh can exchange trade in energy through the BIM- STEC framework. Nepal must, therefore, encourage Bangladeshi investment in the energy sector.
Pay your taxes
Kathmandu Metropolitan City's revenue from rent and business tax would have been many times greater were it not for the heavy evasion taking place currently. A sizeable number of the city's residents live off rental income, but they either undervalue or evade taxes to the local level. It is common knowledge that a shutter at places like New Road commands an exorbitantly high price, which only highly-profitably businesses like jewellery shops can afford to rent. Yet property owners have a tendency to declare low rents to reduce the burden of income tax.
A recent monitoring conducted by KMC's Revenue Department at New Road, Maharajgunj and Lazimpat has shown that house owners were quoting very low rents and even renting out shutters of a single house for different amounts. Following the monitoring, dozens of house owners and businesspersons have been directed to present themselves before the department. It remains to be seen what penalty they will face. If they are able to get off the hook lightly, KMC's attempt to bring house owners and businesspersons under the tax net will have failed. Only strict monitoring and ways to bring transparency in the rental deals will enhance broaden revenue base.
A version of this article appears in the print on March 25, 2021, of The Himalayan Times.