Concept of Public Enterprise in Nepal
Public Enterprises (also called SOSs – state-owned enterprises) are those institutions that are partially or fully owned by the state. These organisations are established, owned, and managed wholly or partly by the government to provide goods and services for the public welfare and national development.
In Nepal, PEs were mainly established after the end of the Rana Regime and especially after the implementation of planned economic development in 1956. These institutions have been instrumental in building the infrastructure, providing the service, and promoting the national development objectives. In Nepal, PEs have been playing a crucial role in controlling the market monopoly, artificial shortages, and fair distribution of essential goods and services.
Primary characteristics of public enterprises are
- State-owned (partially or fully)
- Government control over management and operation
- Focused on public welfare rather than just profit to achieve socio-economic objectives
- Accountability to the government and public
These enterprises operate in sectors such as banking, transportation, insurance, communication, electricity, water supply, manufacturing, and trade.
Current Status of Public Enterprises in Nepal
As of 2083, there are 45 public enterprises in Nepal. The first public enterprise was Biratnagar Jute Mills, established in BS 1993. There are 20 fully owned and 25 are partially owned by the government of Nepal. There are 6 active enterprises, but not in operation, and 2 completely inactive institutes.
Public Enterprises at Glance
- First Enterprise – Biratnagar Jute Mill (BS 1993)
- Current – 34 Public Enterprises (20 fully owned, 25 partially owned)
- Active but not in operation – 6
- Inactive – 2
- Established as per the Company Act – 34
- Enterprises Special Act – 8
- Communication Act/Cooperative Act/ Enterprises Act – 1
- Affiliated ministries – 11
- Total Investment of Government as of FY 2080/81 – 7 Kharba, 3 Arba, 93 Crores, 88 Lakhs
- In Profit – 28
- In loss – 15
Classification of Public Enterprises in Nepal
| S.N. | Company | Sector | |
| 1 | Udayapur Cement Industries Ltd. | Industrial Sector | 10 |
| 2 | Herbs Production and Processing Company Ltd. | Industrial Sector | |
| 3 | Janakpur Cigarette Factory Ltd. | Industrial Sector | |
| 4 | Dairy Development Corporation | Industrial Sector | |
| 5 | Nepal Oriend Magnesite Pvt. Ltd | Industrial Sector | |
| 6 | Nepal Ausadhi Ltd. | Industrial Sector | |
| 7 | Nepal Metal Company Ltd. | Industrial Sector | |
| 8 | Butwal Spinning Mill Ltd. | Industrial Sector | |
| 9 | Daubadi Falam Company Ltd. | Industrial Sector | |
| 10 | Hetauda Cement Industry Ltd. | Industrial Sector | |
| 11 | Krishi Samagri Company Ltd. | Trading Sector | 6 |
| 12 | The Timber Corporation of Nepal Ltd. | Trading Sector | |
| 13 | Nepal Oil Corporation Ltd. | Trading Sector | |
| 14 | Nepal Food Corporation | Trading Sector | |
| 15 | National Trading Ltd. | Trading Sector | |
| 16 | National Seeds Company Ltd. | Trading Sector | |
| 17 | Industrial District Management Ltd. | Service Sector | 8 |
| 18 | Civil Aviation and Warehouse Company Ltd. | Service Sector | |
| 19 | Nepal Transit and Warehouse Company Ltd. | Service Sector | |
| 20 | Nepal Railway Company Ltd | Service Sector | |
| 21 | Nepal Airlines Corporation | Service Sector | |
| 22 | Nepal Purbadhar Nirmal Company Ltd. | Service Sector | |
| 23 | National Productivity and Economic Development Centre Ltd. | Service Sector | |
| 24 | Sajha Yatayat Ltd. | Service Sector | |
| 25 | Gorkhapatra Corporation | Social Sector | 5 |
| 26 | Janak Education Material Centre Ltd | Social Sector | |
| 27 | Nepal Television | Social Sector | |
| 28 | Rastriya Awas Company Ltd. | Social Sector | |
| 29 | Cultural Corporation | Social Sector | |
| 30 | Nepal Water Supply Corporation | Public Utility | 5 |
| 31 | Nepal Telecommunication Ltd | Public Utility | |
| 32 | Nepal Electricity Authority | Public Utility | |
| 33 | Rastriya Prasaran Grid Company Ltd. | Public Utility | |
| 34 | Vidhyut Utpadan Company Ltd. | Public Utility | |
| 35 | Agricultural Development Bank Ltd. | Financial Sector | 9 |
| 36 | Hydroelectricity Investment and Development Company Ltd. | Financial Sector | |
| 37 | Citizen Investment Trust | Financial Sector | |
| 38 | Deposit and Credit Guarantee Fund | Financial Sector | |
| 39 | Nepal Bank Ltd. | Financial Sector | |
| 40 | Nepal Stock Exchange Ltd. | Financial Sector | |
| 41 | Rastriya Beema Company Ltd. | Financial Sector | |
| 42 | Rastriya Beema Corporation | Financial Sector | |
| 43 | Rastriya Banijya Bank Ltd. | Financial Sector |
Objectives of Public Enterprises in Nepal
Objectives of establishing public enterprises in Nepal can be viewed from multiple dimensions.
Economic Objectives:
- Ensuring the availability of essential goods and services to the general public at an affordable price.
- Avoiding unhealthy competition, artificial shortage, price hike, and monopoly in the market.
- Generating profits for the government.
- Supporting industrial development for national economic growth.
- Boosting the productive efficiency and utilization of the available resources.
- Creating employment opportunities.
Social Objectives:
- Providing access to the basic services such as electricity, water, telecommunications, and transportation to the general public.
- Reducing income inequality and regional disparities.
- Ensuring social welfare and harmony.
- Ensuring equitable distribution of goods and services.
- Promoting literacy and awareness through education.
Political Objectives:
- To strengthen the national sovereignty and economic independence
- Supporting national integration and unity
- Implementing the development plan and policies of the government
- Promoting self-reliance and reducing external dependencies
Environmental Objectives:
- Promoting sustainable resource management
- Reducing environmental pollution for the protection of the ecosystem
Importance of Public Enterprises in Nepal
The importance of the public enterprise of Nepal can be categorized and described as follows.
- Infrastructure Development
Public enterprises have significantly contributed to the transportation, electricity, and financial infrastructure in Nepal.
- Economic Development
Public enterprises directly employ thousands of workers across various sectors and provide stable economic benefits. It contributed in poverty reduction, economic uplift of the nation.
- Source of Revenue for the State
Not all, but profitable enterprises contribute significantly to government revenue through dividends, profits, and taxes. This supports the government to spend in education, health, social services, and other developmental projects, making public enterprises indirect contributors to social development.
- Industrialization
All the big industries of Nepal are established by the government. Not only the manufacturing sector but all the financial sectors were started by the government as a public enterprise. It has played a major role in the early industrial development of Nepal.
- Economic Stability:
Government involvement through public enterprise helps maintain price stability and protects consumers.
- Regional Development:
By extending the essential services to economically disadvantaged regions that lack private sector interest, public enterprise provides balanced regional development. For example, branches of government banks, telecommunication, electricity supply, food, etc.
- Control of Monopolies
In strategic sectors where monopolies exist (in electricity, fuel, water, and telecommunications), public enterprises prevent exploitation of consumers by maintaining price controls and ensuring equitable access to essential services.