Lagging in digitalization

Government has time and again failed to understand the need to go digital in all the sectors and put the effort in developing regulations to monitor the digital platforms

Few weeks back, Nepal Rastra Bank (NRB) announced that it will take serious action against those who receive or make international payments through social media platforms. Considering these transactions to be illegal, NRB has said that any such activities would be treated as foreign currency embezzlement for which the action would be taken under the Foreign Exchange Act (2019). The announcement was made amid the rising popularity of social media channels including Facebook, Instagram, Twitter and Youtube. While NRB seems to have recognized the growing popularity of these channels, the statement indicates the failure of NRB to prescribe a proper solution to bring these transactions into a tax bracket.

It isn’t true that making or receiving payments over international online channels is illegal. However, as none of the banking sectors are connected to the international digital banking channels, most of the companies and individuals opt to make payments using foreign bank accounts and cards. These payments are then either sent or received through informal channels such as hundi which then happens to be illegal in nature.



Provisions so far
As stated by one of the officials of NRB, there is a provision that allows any institution or individual to make payments for advertising over social media platforms which requires approval from the Ministry of Communications and Information Technology. Upon receiving the approval, the provision allows payments up to Rs 10,000 to be made through banks. It is unclear if this limit is per transaction or per year for an institution or an individual. However, any transactions beyond this limit require approval from NRB.

While the process to get an approval of almost a hundred US dollars is such a hassle, one can barely think of dealing with provisions to get approval beyond Rs 10,000. Moreover, for an agency providing advertising solutions to multiple clients and running multiple online ad campaigns, visiting a bank each time to make the payment is in no way a practical solution.



In one of the interviews, Sixit Bhatta, the founder of the popular Nepali ride-sharing app, said that “If we look at the developed economies, the absence of laws and regulations means it’s legal, and you make the frameworks very swiftly to accommodate innovation. In our (underdeveloped) economies, they (the government) deem the absence of laws as not legal and they are pretty slow in creating regulations.” The government has time and again failed to understand the need to go digital in all the sectors and put the effort in developing regulations to monitor the digital platforms.

In the absence of law, Pathao and Tootle riders have been cracked down and fined multiple times for “operating the vehicle against its purpose”. However, after a strong backlash from the public over the social media platforms, the government stepped back and stated that it would allow their operations. Soon it was heard that Prime Minister KP Sharma Oli directed the Ministry of Physical Planning and Transportation to come up with the laws for governing these platforms. While the Department of Transport Management had stated that it would have the new law ready by the New Year’s Day of 2076 (April 2019), nothing has been heard of over these several months.

Third-party platforms have surely been a boon until now. However, the ability to make direct payments through the cards of the banks is much of an easier option.

Amid the growing popularity of online shopping portals and increased online transactions, the government released a national strategy for e-commerce only in August 2019, almost five years after the e-commerce began operating in a full-fledged manner. Yet lack of auxiliary infrastructures has been much of a hurdle for these platforms every now and then. For instance, the country lacks proper road maps and house numbering systems to locate or deliver the ordered goods. Moreover, the inability to make use of the debit or credit cards of the national banks for the payments in these platforms and compulsion to use third-party payment channels such as eSewa and Khalti has been a hassle for the users. Third-party platforms have surely been a boon until now. However, the ability to make direct payments through the cards of the banks is much of an easier option.



Time to speed up
No one can deny the fact that the offerings that can be made through online platforms are immense. The ability to encourage such platforms and accommodate them into the regulated market will not only ease the lives of the people but will also allow the government to bring these into a tax bracket and earn revenues.

Moreover, while the government aims to welcome millions of tourists there is a need to realize the significance of developing digital infrastructure to cater the needs of the tourists. For sure the tourists would prefer to search for a cab service online, book it through an app, and make payment using their card rather than taking up a hassle to walk to the street, look for a cab, bargain over the price, and get used to with the currency.

This article was published on March 12, 2020 on Republica National Daily

Is Too-tall too-short for success?

Disruptions that are rare in Nepali market are no new to the rest of the world. Almost everything that is said to be new in Nepal, already exists in some other parts of the world. Further, we have failed to incorporate the disruptions for Nepali market that a few enthusiasts have tried to introduce in the country. Thus, for now, innovations are just limited in thesis papers, science exhibitions, and classroom projects of the colleges. When you ask me about what exactly I mean by disruption, the recent example that can best explain this is “Tootle”. As catchy and easy as the term “Google”, Tootle has forcefully disrupted the Nepali market by introducing a ride-sharing app for motorbikes. To add, Tootle flourished in such a way that it even added its international competitor Pathao within a short span of its operation. Unfortunately, the government has failed to incorporate such disruptive form of business idea while a large chunk of the city dwellers is wholeheartedly welcoming it.

We all know the chaos that Kathmandu has in terms of transport. Public buses are super unwelcoming. Private cars are still a luxury. And so, the only form of private vehicle that accommodates almost all income groups is motorbike. But the failure of the state to maintain the roads and the traffic is what keeps half of our mood-off in a day-to-day basis! We all know how it feels to face the traffic, inhale piles of polluted air and spend an hour to reach a destination that’s just six or eight kilometers away. Amid this frustration, Sixit Bhatta, founder of Tootle must have realized the potential of a ride-sharing app that could not only ease the problem of being compelled to squeeze through a microbus, smell someone’s armpit, or be bullied by the bus-helper to move back, turn left, and turn right, but also generate some income to the allarey thita-thitis and the unemployed or underemployed chunk of population. 

Tootle as an idea was nothing new. Ridesharing apps existed all around the world even before Tootle was conceptualized, and probably hundreds of other people in Nepal already had this idea. However, the reason Tootle (followed by Pathao) get the credit, is their courage to implement and market the idea while there was no policy that governed this concept. Unfortunately, we still do not have one!

The gover-ment (yes, गोबर-मेन्ट)

Let’s talk about our gover-ment full of people with गोबर in their mind with a question: Tell me one government institution or corporation that made/makes money and is out of controversy. Begin with Nepal Airlines, Gorkhapatra Sansthan, Biratnagar Jute Mill, Nepal Ausadhi Ltd., or any other institutions except the banks and the insurance companies (who somehow make profit). I know, a die heart fan of our Oli ba or his party might have more than one example to beat me, but the whole point of asking is that whether or not we have been able to live a life that is normal. Normal in the sense you live a life where doing a regular 9-to-5 full-time job lets you live a life just enough to fulfill our basic necessities (food and water, shelter, clothing, sanitation, education, health for a family). I believe you get me, and agree with my answer which obviously is a big “NO”.

Let’s talk about the other initiatives that were taken by the state;

Instance 132341:

About ten years back, when I first got my drivers license for the motorbike it took me approximately a month to get the license (the card). The Department of Transport came with a better way to take the driving test and upgraded its procedure later. Thus, about 3 years back when I applied for an upgrade to get a permit for the car, it took me about 8 months, including a wait of six months, to appear on the “trial” and get the driving license card. Now, that my license has expired the government’s best of the best technology for printing “smart license” takes more than a year for a driver to get it. Further, smart license has existed for more then two years, but the traffic police has no tools to extract the data electronically. My team from the office did provide an extensive proposal to work on several traffic-related issues including this matter, but the traffic police department loved our proposal for only one reason: to showcase it as their future plan to the people above them in the command-chain.

Instance 132342:

I remember the traffic lights being a rare thing. They existed in few of the places including Singhadurbar and Thapathali. As the number of traffic lights grew, the number of these getting dysfunctional too rose. Now, that the government probably thinks the traffic lights are inefficient compared to the traffic police, none of the lights work on the roads of Kathmandu.

Instance 132343:

Masks weren’t a thing until ten years back in Kathmandu. The need for mask rose along with the expansion of roads and the growth in the number of vehicles. The state thinks expanding roads is more than enough then to maintain it. Sometimes I wonder about how the dozer-wala contractors are so quick in digging the holes on the road while none of the other contractors get their job done in time?!

Instance 132344 and many more:

Let’s not talk about Melamchi, it’s way too cheesy as an example. How about the syndicate that “doesn’t” exist (on the paper), or about metered taxis that (do not) travel in meters?!

What next?

The government is trying its best to accommodate start-ups like Tootle by forming a body of experts who recommend the government to ask the ride-sharing app companies and its riders to register a “black” number plate. This will allow a window of opportunity to form the black number plated motorbike association who will then deny to carry passengers and announce their demand to let the government allow them to charge as much fare as they want. After all its Nepal and good initiatives like Tootle are supposed to be too short in success.

Anyways, we already know what’s next. We all have a plan about how the country can develop within a few years. The experts with the blueprint for development can be found in all the chiya-pasals of the country. It’s just about implementation.

I just have a song for all us: 

लौन के गर्ने, कसले के भन्ने !