■ Union Budget of India (2021 A.D)
Union budget, was released on 3rd of Feb, 2021 and was released through a digital platform.
As we know Nepal and India have been into the ties of trade relationships since years and the Trade Treaty and BIPPA with India have strengthened to the exchange of transactionary stances be it goods, services or any other.
Briefly, as I viewed the Union Budget, I felt to jot some important things.
The Cess (tax charged above the base tax liability of any tax payer) basically in Agriculture and Development Sector was implied this time for many production stuffs.
It is said that the Budget would increase price of Petrol/Diesel by 2.5 % per litre.
On the other products, like agriculture goods, in Apple has Cess about 35 %, Lentils has Cess has Cess of 20 %, Kabuli chana and Peas has Cess of 30 %, Soyabean and Sunflower oil has Cess of 20 %, Cotton also has Cess of 5 % Cess, etc
Similarly, Urea is also charged with a Cess of 5 %.
When it comes to Inverters (Solar) then it's also charged with the Cess of 5 to 20 %.
To the contrary, the Nylon, Iron, Copper, Platinum and Gold, Silver and Shoes were also getting a reduced Cess.
■ My analysis
As we are aware that we are the largest importer from India. The TEPC (Trade and Export Promotion Centre) data of Nepal reveals that Rice is the major imports and then comea food stuffs followed by Crude Soyabean, M.S Billet, etc.
So if we see the fruits and vegetables slight increase might be there in our local market, nonetheless, the impact of it into the Food and Beverages Inflation is yet to be researched. It's impact on our overall import cost may be lower as it's not the prime import product.
Similarly, the Iron, Copper, Gold and Silver's price may decrease slight a bit in upcoming days if the demand and supply existed the same or if demand increases.
In nutshell, the overall impact will not be big but there will be slight turbulence in respective markets (conclusion based upon current circumstance, not econometrically researched).
Thank you
Note: Suggestions are lauded.
Aditya Pokhrel
MBA, MA Economics, MPA
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