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Public Enterprises – Current Status

Public Enterprises
Public enterprise is an organization which is owned, managed and controlled by the government for the welfare of the public. The main objective of this organization is to provide goods and services to the public at a reasonable price. The government has invested more than 51 % in the public enterprise. Public enterprise is originated and developed after starting developing planning in 2030 B.S. Nepal Rashtriya Banijaya Bank, Nepal Airlines Corporation, Nepal oil corporation, Nepal Telecom, National Insurance Company, Nepal Electricity Authority, etc.

Current Status of Public Enterprise
More than half of the total share of public enterprise by the government directly or indirectly. Nepal has been adopting a mix economic system. Public enterprises are operation under six broad sectors in Nepal. At present, there are 37 public enterprises in Nepal. The 6 sectors based on their functions or services are as follows:

 

The government is investing a large sum of public resources in public enterprises every year. Many of these enterprises in the initial years of their establishment recorded satisfactory performance. But now the overall performance of public enterprises in Nepal is not satisfactory. A large amount of investment in the government is being misutilized. The return unsearched investment is quite low and the government is bearing loss in large amount form these enterprises. Therefore, Nepal government stated the privatization of public enterprises. The current situation of public enterprises in Nepal can be shown as follows:

Sectors No. of enterprises Profit/Loss Capital investment
Industrial 7 -784.3 2388.4
Business 6 3033.1 5469.8
Service 7 1358.0 11733.5
Social 5 -292.5 1590.5
Financial 9 1056.6 79930.4
Publicity 3 5032.4 121539.4
   Total 37 10003.3 222652.0

Source: Economic Survey 2009/10, Ministry of Finance.