Background:
Industrial policy 2011 has been formulated with an objective to bring positive changes in over all economy and social sector by the means of rapid industrial development .This policy was formulated to eliminate the weakness of Industrial Policy 1993 . This policy expects the activities of industrial development will increase employment opportunities and level of income of people massively.
The policy establishes the following objectives:
1) to increase export of industrial products with growth in national income and employment through enhancement of quality and competitive industrial products and productivity;
2) to increase contribution of industrial sector in the balanced national and regional development by mobilizing local resources, raw materials, skills and means;
3) to establish industrial entrepreneurship as a sustainable sector by using latest technology and environment friendly production process;
4) to create strong basis of investment having developed productive human resources and managerial capacity.
Effort in the past:
- Inorder to achieve the objectives of set by industrial policy 1993, it was first necessary to transform the economy which substantially relied in agriculture to industrial economy.
- Efforts were made to concentrate government activities concerning industrial development direction.
- Industry Policy 1993 creates a legal basis for development of industries by making by making tax facilities and concession on such income tax, sales tax and excise duty to various class of industry at various regions .
- However ,1993 act could not continue and those facilities and concession and was gradually minimized by 1st amendment.
- The provision of compulsory licensing for establishment and operation of industry was repealed and it was provided with no license and permission would be required this caused the adverse effect in environment and public health.
- Inorder to make more contribution in industrial development various efforts were made:
- 1Capacity development of labors.
- Enhancing managerial skill
- Encouraging the use of new technology
- Increasing sectoral investment
- making provision for restoration of sick industries.
- imparting training for entrepreneurship promotion and proving facilities and services from one without hassles.
Present State :
There has been no industrialization in expected pace . The contribution industrial sector in GDP could not even reach 10%. The economy of country is excessively dependent on traditional agriculture system and remittance though there is high potential for development of industry. The available means and resources are not being exploited due to lack of appropriate management capacity.Our country has been facing various problems such as extreme unemployment and semi-unemployment due to which workforce available in country go for foreign employment at minimal wages.
Nepal has become the member of WTO and its connectivity with world market has expanded.Because of rapid industrialization and competition going in the neighboring counties, Nepal’s industries have to enhance productivity and domestic good judgement and quick decision taking global competition into consideration.Nepali Industries has to ensure quality of products ,transparency in commercial transaction and have to make extra effort for capturing market.
Since there is no environment for the protection of industry, Nepalese industries have to promote industrialization by creating investment friendly environment and industrial fairs, trainings,exchange of information etc. It is expected that the new policy ,large industries will be established in the country and employment will be increased with the development of micro, cottage and all industries.
Major Problem and Challenges :
- Political instability.
- Industrial Insecurity.
- Unfavorable labor relation.
- Minimal availability of energy.
- Weak infrastructure.
- Lack of competent human resources.
- Lack of capacity to adopt new technology
- Low productivity
- Lack of diversification of exportable items and weak supply management
Challenges:
- Lack of mentality and atmosphere to adopt industrial enterprises the means of livelihood.
- Making investment with in country.
- Optimum utilization of of capital and intellectual properly in production oriented areas and creating employment opportunities in the country.
- Nepalese Labour Force attracted to foreign market.
- Challenges such as geographic location,structure of topography, competition ,globalization and liberalization
