Industrial growth hits 4-year low of 1.5pc
KATHMANDU, JUL 13 -
Delayed budget , energy crisis and political instability continued to hit the industries, with the Economic Survey 2012-13 projecting a dismal growth of 1.5 percent for the sector. It is the sector’s lowest growth rate in the last four years.
The sector grew by an average 1.7 percent rate annually in the last five years, which shows its disappointing status, stated the survey made public on Friday.
Although the industrial growth rate was relatively better at 4 percent in 2009-10 and at 4.4 percent in 2010-11, it started to dwindle since the last fiscal year, with the figure standing at 3 percent. The contribution of the industrial sector to the gross domestic product (GDP) decreased to 6.2 percent this fiscal year from 8.5 percent a decade ago.
The survey attributed the slowdown in the sector to the downfall in the production of soybean, edible oil, liquor, resin, GI pipe, animal feed, noodles and light beverages. Production of tea, brick, soybean oil, textile, paints, beer and medicines are expected to go up, according to the report.
Pashupati Murarka, vice-president of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), termed load-shedding as the biggest contributor to dismal industrial growth. “Political instability, which discouraged new investment, is also responsible for the pathetic industrial growth,” he said.
Given decreasing labour problems in the sector, industrialists said rising wage of workers has affected industrial production. “Our minimum daily wage is higher than what a labourer receives in India, which is a big economy, said industrialist Diwakar Golchha, adding industries cannot run for a long under such a wage structure.
In the first eight months of the fiscal year, 183 industries with Foreign Direct Investment (FDI) were registered, which are expected create 9,505 jobs.
The energy sector received the largest FDI share — 34.2 percent of the total FDI coming in. It is followed by industrial production, construction industries and service sectors, which received 31.7 percent, 13.9 percent and 10.7 percent of the total FDI, respectively.
In the review period 1,711 trademarks were registered. The survey showed 498 industries entered into operation in 11 industrial estates in the review period, while 72 industries are under construction. In the same period, 52 industries shut down. A combined 3,873 ropanies of land was provided on lease across the 11 industrial estates to industries.
However, registration of cottage and small industries witnessed a sharp decline this year, with 9,702 industries registered at Department of Cottage and Small Industries, as of mid-March 2013. A total of 18,008 such industries were registered in FY 2011-12. Of the total 9,702 small industries registered this year, 8,411 were registered as private firms, 547 as partnership business, and 744 as private limited. Collectively, Rs 11.97 billion has been invested in cottage and small industries this fiscal year.
Source: The Kathmandu Post
