KATHMANDU, NOV 29 - 2013
Planned investments in new industries have increased in the last quarter even though fewer medium and large enterprises were registered at the Department of Industry (DoI).
The number of factories registered during the period stood at 97, down from 131 year on year. However, their proposed outlays jumped to Rs 163.55 billion from Rs 20.59 billion. According to the DoI, registrations of large hydropower projects led to the higher figure. The registration of ventures related to energy, manufacturing, services and tourism all fell during the first three months of the fiscal year. The sole sector that saw a growth was agriculture. Meanwhile, industries related to energy and agriculture are the only ones planning to increase their outlay. Investments in other sectors have fallen.
Proposed investments in the energy sector soared to Rs 159.65 billion from Rs 11.68 billion in the corresponding period last year. Planned outlays in farm-based enterprises also surged to Rs 649 million from Rs 362.68 million.
Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry, said that since the energy sector requires heavy investment , it was natural that the registration of such projects would swell the total outlay.
“Other sectors like tourism and services too have brighter prospects while tourism particularly requires political stability,” he said. “Hopefully, tourism will rebound by the end of the second quarter.”
Meanwhile, Hari Bhakta Sharma, vice-president of the Confederation of Nepalese Industries (CNI), said that an increase in the number of registrations was no cause for celebration as the plans rarely get translated into action.
“If you look at the history of the past 10 years, most of the registrations have not become actual investment s. Hence, the government should focus on turning these registrations into actual investment ,” said Sharma.
According to him, most of the prospective investors register their enterprises, acquire licences and wait for a favourable investment climate. “Our environment does not look good for making investments,” said Sharma. “Issues with the licensing process, infrastructure and labour, among other sectors, should be addressed to create a business environment in the country.” The energy and agriculture sectors have been attracting greater investment commitments as they have been rising in the government’s priority list. This year, the government has accorded the highest priority to energy followed by agriculture and infrastructure.
Meanwhile, Nepal Rastra Bank (NRB) has encouraged lending in energy and agriculture by making it mandatory for banks and financial institutions to lend at least 12 percent of their total loan portfolio to these two sectors in three years.
Registrations Q1
Industry No of Registrations
FY 2013-14 FY 2012-13
Agro-Based 24 21
Energy-Based 13 16
Manufacturing 20 30
Service 20 30
Tourism 20 33
Minerals 1
Total 97 131
Capital q1
Industry Investment
FY 2013-14 FY 2012-13
Agro-Based Rs 649m Rs 362.68m
Energy-Based Rs 159.65b Rs 11.68b
Manufacturing Rs 2.37b Rs 5.13b
Service Rs 368m Rs 1.43b
Tourism Rs 510.11m Rs 1.92b
Minerals Rs 50m
Total Rs 163.55b Rs 20.59b
Planned investments in new industries have increased in the last quarter even though fewer medium and large enterprises were registered at the Department of Industry (DoI).
The number of factories registered during the period stood at 97, down from 131 year on year. However, their proposed outlays jumped to Rs 163.55 billion from Rs 20.59 billion. According to the DoI, registrations of large hydropower projects led to the higher figure. The registration of ventures related to energy, manufacturing, services and tourism all fell during the first three months of the fiscal year. The sole sector that saw a growth was agriculture. Meanwhile, industries related to energy and agriculture are the only ones planning to increase their outlay. Investments in other sectors have fallen.
Proposed investments in the energy sector soared to Rs 159.65 billion from Rs 11.68 billion in the corresponding period last year. Planned outlays in farm-based enterprises also surged to Rs 649 million from Rs 362.68 million.
Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry, said that since the energy sector requires heavy investment , it was natural that the registration of such projects would swell the total outlay.
“Other sectors like tourism and services too have brighter prospects while tourism particularly requires political stability,” he said. “Hopefully, tourism will rebound by the end of the second quarter.”
Meanwhile, Hari Bhakta Sharma, vice-president of the Confederation of Nepalese Industries (CNI), said that an increase in the number of registrations was no cause for celebration as the plans rarely get translated into action.
“If you look at the history of the past 10 years, most of the registrations have not become actual investment s. Hence, the government should focus on turning these registrations into actual investment ,” said Sharma.
According to him, most of the prospective investors register their enterprises, acquire licences and wait for a favourable investment climate. “Our environment does not look good for making investments,” said Sharma. “Issues with the licensing process, infrastructure and labour, among other sectors, should be addressed to create a business environment in the country.” The energy and agriculture sectors have been attracting greater investment commitments as they have been rising in the government’s priority list. This year, the government has accorded the highest priority to energy followed by agriculture and infrastructure.
Meanwhile, Nepal Rastra Bank (NRB) has encouraged lending in energy and agriculture by making it mandatory for banks and financial institutions to lend at least 12 percent of their total loan portfolio to these two sectors in three years.
Registrations Q1
Industry No of Registrations
FY 2013-14 FY 2012-13
Agro-Based 24 21
Energy-Based 13 16
Manufacturing 20 30
Service 20 30
Tourism 20 33
Minerals 1
Total 97 131
Capital q1
Industry Investment
FY 2013-14 FY 2012-13
Agro-Based Rs 649m Rs 362.68m
Energy-Based Rs 159.65b Rs 11.68b
Manufacturing Rs 2.37b Rs 5.13b
Service Rs 368m Rs 1.43b
Tourism Rs 510.11m Rs 1.92b
Minerals Rs 50m
Total Rs 163.55b Rs 20.59b
Source: The Kathmandu Post
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