As country gears up for longer lockdown, the government has finally announced a slew of measures for those affected by the COVID-19 pandemic. With businesses being hard hit and lives of ordinary citizens crippled by restrictions imposed by the government to stop the possible outbreak of the deadly coronavirus, there were increasing calls from the business fraternity and civil society for such relief package.
As an immediate relief to people working in the unorganised sector, local levels have been directed to ensure their daily food needs. The local level authorities will collect data of such workers, and families seeking such relief are required to register themselves at respective ward offices.
The government has said it will take special care of the vulnerable groups - people with disabilities, pregnant women, orphans and people with long-term illness.
Finance minister Dr Yuva Raj Khatiwada said that all industries and business firms have been mandated to pay salaries to their employees even if they are closed due to the lockdown. “The workers employed in the formal sector must be paid their daily wage or monthly salary by the employers,” mentioned Khatiwada.
According to the cabinet decision, hotels and restaurants that have been closed due to the impact of coronavirus will also have to pay their workers full salary up to mid-April. Minister Khatiwada clarified that the employers can utilise money collected in the welfare fund to disburse wages of the workers. The government will deposit the amount contributed by workers and employers of organisations that have been registered at the Social Security Fund for the month of Chaitra (mid-March to mid-April).
As large number of migrant workers haven’t been able to go abroad due to the pandemic, the government has said those who returned from abroad and who could not go abroad despite having work permit due to Covid-19, will be provided employment opportunities through the Prime Minister Employment Programme.
The government has also offered discount on electricity tariff. As per the decision, consumers will get 25 percent discount on electricity bills for the months of Falgun and Chaitra (mid-February to mid-March) for consumption of less than 150 units of electricity.
Telecom companies will provide a 25 percent discount to internet and data users. The government will make necessary arrangements for discount from private telecom companies.
Likewise, essential food stuffs will be made available to the general public through the Nepal Food Corporation and the Salt Trading Corporation at discounted rate of 10 percent.
The government has also barred private schools from taking fees for the month of Chaitra, while house owners have been requested to waive rent for the month for workers of informal sector due to the current crisis. In order to stop the already strained foreign exchange reserve from depletion, the government has banned the import of vehicles costing more than USD 50,000 while also limiting the import quota of gold to 10 kg per day from 20 kg per day.
As for the private sector, the government has said businesses affected by Covid-19 can make payments of their income tax and VAT on monthly, bimonthly or quarterly basis until May 7. Similarly, the vehicle registration renewal deadline has been extended. No additional charge will be levied for the renewal of driver's license, vehicle registration, pollution test and route until May 13. The government has said it will allocate funds from the annual budget to be used in the control of the spread of Covid-19. It has also sought foreign aid worth Rs 22 billion from major development partners - World Bank, Asian Development Bank and International Monetary Fund. According to finance minister Dr Khatiwada, the government will finanlise agreement agreements for Rs 3.48 billion concessional loan with the World Bank, Rs13.9 billion no-interest loan provided by International Monetary Fund and USD 50 million financial aid being provided by Asian Development Bank.
Extension of Loan Repayment Deadline
Meanwhile, Nepal Rastra Bank (NRB) has also announced some measures to provide relief to the sectors affected by Covid-19. The central bank has directed banks and financial institutions to extend the deadline of repayment of all kinds of loans by at least three months.
As per the NRB directive, individuals and businesses affected by the impact of COVID-19 can now repay their loan for mid-April by until July without having to pay any interest or fines. NRB has clearly ordered BFIs not to charge any kind of interest till mid-July. However, if anyone pays the loan within mid-April, they will get 10 percent discount on the interest. Chintamani Shivakoti, acting governor of NRB said that the central bank took such measures due to the inconvenience in repayment of loan. NRB has also directed BFIs not to include the credits in the bad loan section if they fail to recover the loans within mid-April. The central bank's announcement will be applicable for all kinds of loans including home loans, auto loans, educational loans or loans taken by firms and businesses from any BFI. The rule even applies to credit card dues as the banks have been instructed not to fine any borrower for the stipulated time.
Executive Director at the Banks and Financial Institutions Regulatory Department of NRB, Dev Kumar Dhakal, informed New Business Age that the relief package will not affect the country’s economy adversely.
“These measures will aid to the economic recovery. We expect that the package will provide relief to the borrowers,” he said.
Govt Relief Package
• Food to the workers associated with informal sector
• Relief to be provided by local levels during the lockdown period
• Salaries to formal sector employees during the lockdown
• Use of welfare funds to pay salaries of staffs of private sector institutions
• Government to deposit the amount contributed by workers and employers of organisations affiliated to the Social Security Fund for the month of Chaitra
• Employment opportunities to mirgant workers through the Prime Minister Employment Programme
• 10% discount on food items at government-operated supply companies
• 25% discount in internet and electricity up to 150 units
• Extension of payment deadline for electricity, drinking water, telephone and internet bills
• Full customs duty waiver on import of medical equipment
• Deadline extension for tax payment for businesses
• Renewal of private firms at the Company Registrar's Office can be done until May 13.
• Quota on import of gold reduced
• Ban on import of vehicles worth over Rs 6 million
• Ban on import of betel nut, black pepper, peas and dates, among other items
• Vehicle registration renewal deadline extended
• Rs 22 billion foreign aid sought from the World Bank, International Monetary Fund and Asian Development Bank.