INDUSTRY OF NEPAL

The industry is an important unit of the production structure. The rate and trend of industrial production has an impact on national economy. If we could achieve high-level industrial production it could have a widespread positive impact on the economic structure. With industrial production, there will be widespread utilization/ mobilization of means and resources of a society. Employment is created in this process. The rate of poverty is low in societies that have moved forward in the large-scale process of industrialization. Adequacy of opportunities will lessen the chances for tension, scarcity and conflict among people. It strengthens social development.

Looking at the history of industrial development in Nepal, attempts had been made from the ancient time and towards the end of the Rana Regime industries like sugar, garment, jute, matches, soap were opened in the Tera within the help of the East India Company. From that time the process of foreign investment in Nepal for industrial development began. This process became institutionalized after the political changes of 2007 B.S. Investment for industrial development was made by the state itself and the government as well as the private sector. During panchayat period, there was no clear policy for private investment and the state itself couldn't invest much. After the political change of 2046 B.S., a favorable environment was created for investment with the greater focus on the role of private investment were involved in the industrial development of Nepal. However, because of the long-drawn conflict there was no favorable environment for national and this there could be no expected benefit in the industrial sector. However, cement, cigarette, noodles, wine, brick and soap factories increased in number. Until a few years ago the situation of garment and carpet industries was satisfactory but they are in crisis now. There are many domestic and small industries. They are being displaced because of inability to connect to in the market owing to the process of globalization. We have not been able to establish large scale industries with internal and external investment.

Looking at Nepal from the point of view of industry on the global map. We are behind. Our presence very low and negligible. The contribution of the industrial sector in GDP has not gone above 10%. More than 90% of the industries belong to the category of domestic and small industry (Tenth plan 2059-64). It has revealed that industry has not created a good position for itself in the labor market. It means there has been no development of big industries.

Interim plan presents the existing situation of industrial development like this- Industrial production will be increased and expanded by encouraging and assisting private sector. The contribution of the industrial sector to Gross Domestic Product will be increased small micro and domestic industries will be expanded to create self-employment in the rural areas for reducing poverty and increasing the income and purchasing power of the rural people. Appropriate technology and foreign investment will be brought to areas of relatively more gain to promote industrial competitive capacity. These are the goals and the targets of the tenth plan.

During the period of the tenth five-year plan, the pace of industrialization was negatively affected due to worsening situation of peace, lack of institutional consolidation and lack of service effectiveness. As a result, only a 1.9% industrial growth rate was achieved despite the targeted 7.8%. Similarly, the targeted contribution of industry and mine sector to GDP was 9.3% but the real achievement was 8.1 percent (Interim Plan 2064).