Capital Market Plays Backbone Role in Nepal's Economy, Says Analyst Pratibha Ghimire

Kathmandu. Capital market analyst Pratibha Ghimire has stated that the role of the capital market in Nepal's overall economy is being established as the backbone. Presenting a working paper at a dialogue program on 'Nepal's Capital Market: Basis of Economic Investment' organized by the Nepali Congress, she mentioned that the ratio of the country's Gross Domestic Product (GDP) and market capitalization clarifies its importance. According to Ghimire, Nepal's current total GDP is 60 kharba rupees, while the stock market capitalization has reached approximately 46 kharba rupees. This data shows that the capital market accounts for 77 percent of Nepal's economy. She argued that the capital market provides the long-term capital needed by the economy and guarantees 'economic democracy' by providing ownership of companies to the general public. Discussing the structure of market capitalization, Ghimire informed that banks and financial institutions hold a 51 percent share in the total market. Similarly, the hydropower sector holds 16 percent and other sectors hold 33 percent. She specifically attributed the success achieved in the energy sector to the capital market. 'At one time, we were forced to endure load shedding of up to 18 hours,' Ghimire said, 'but today Nepal has reached a stage of producing 4,000 megawatts of electricity and exporting 600 megawatts.' She mentioned that this change has been possible due to the private sector, which accounts for 85 percent of the total production. She stated that the capital market connects the investments of the general public with national infrastructure development. Ghimire also stated that the capital market has become a major source of employment generation and state revenue collection. Presenting data from the last fiscal year, she informed that the state collects an average of 1 arba rupees monthly as capital gains tax from the capital market. This amount accounts for approximately 1.5 percent of the country's total revenue. Emphasizing that it should be considered the main basis for development and infrastructure, she said that the capital market helps enrich the country by providing employment to thousands directly and indirectly and by paying billions in taxes.