Although the government has announced the construction of industrial villages in 120 municipalities in the country for the past six years, only four have been operational. Industrial villages have come into operation only in Madane Rural Municipality of Gulmi, Ambukhaireni Rural Municipality of Tanahun, Arjunchoupari Rural Municipality of Syangja and Mellekh Rural Municipality of Achham.

The government has already announced 120 industrial villages as per the policy of 'One Local Level: One Industrial Village' from the financial year 2076/77. According to the Ministry of Industry, Commerce and Supply, 1 billion 51 crore 17 lakh rupees have been sent to the declared industrial villages so far.

The government had declared industrial villages in 120 municipalities including 11 in Koshi, 11 in Madhesh, 19 in Bagmati, 29 in Gandaki, 25 in Lumbini, 9 in Karnali and 16 in Sudurpaschim. Among them, Kaudena Rural Municipality of Madhesh, Shuklagandaki Municipality of Gandaki and Punarwas Municipality of Sudurpaschim have not been disbursed even Rs 92 lakh for the first installment, according to the ministry.

In the 61st report of the Auditor General, it is mentioned that the implementation aspect of the program started without analyzing the availability of land, the possibility of industrial village development on the available land, the priority and capacity of the local level should be improved and the set target should be achieved. The record of the progress of the work done by the local level with the funds given by the association is also in the report of the General Account, which is not in the ministry.

Industrial villages are being built in 120 municipalities with the participation of union, state and local levels. After the local level prepares the detailed study report (DPR) of the industrial village, the federal government only gives funds to build the physical infrastructure. The ministry said that the federal government has given a budget of 92 lakh rupees to each municipality for the first installment.

The Ministry has repealed the first amendment of the 'Industrial Village Declaration and Operation Procedure, 2075' and implemented Procedure 2081. On this Chait 6th, Industries Minister Damodar Bhandari has increased the amount that the municipality will receive in the 'Industrial Village Declaration and Operation Procedures 2081'.

60 percent of the total construction cost of the industrial village or 40 million whichever is less, it is mentioned in the procedure that the amount will be given to the municipality by the ministry. Earlier, 40 percent of the total construction cost of the industrial village or Rs 3 crore, whichever is less, was provided by the ministry to the municipality. Jitendra Basnet, the spokesperson of the Ministry of Industry, said that the procedure has empowered the federal government as well as the provinces and municipalities. He said that the government has revised the procedure and it is estimated that there will be some improvement in the construction of the industrial village. 

45 industrial villages were announced in 2076, 29 in 2077, 32 in 2078, 8 in 2079 and 6 in 2080. According to the first amendment of the 'Industrial Village Declaration and Operation Procedure, 2075', the minimum area for industrial villages should be 25 ropani in the Himalayan and remote hilly areas, 35 ropani in the hilly areas and 7 bighas in the Terai region. It is mentioned in the criteria that it should be at a distance of 500 meters from dense settlements and at a minimum distance of 2 km from the international border.

According to Basnet, the spokesperson of the ministry, the budget has been allocated for the construction of the industrial village, but the main responsibility lies with the municipality. "In the case of some industrial villages, it was seen that it would cost a lot, it was seen that the land would cost a lot," he said, "The federal government has also allocated some budget. But the main responsibility lies with the municipality and province. Due to these various reasons, a small quantity was produced. Some of them are still under construction.

There is also a standard that 60 to 70 percent of the total land in the industrial village should be used for setting up industries. The local governments will conduct infrastructure development programs with the grants provided by the Union Government to the municipality.

Under that, there are criteria to develop infrastructure such as border wall, fence, access road, plot, 11 KV power transmission, use of alternative energy, warehouse, water supply, waste management. The 60th report of the Auditor General has already pointed out that the program started without analyzing the availability of land, the possibility of industrial village development on the available land, the priorities and capacity of the municipality should be improved.

Industrial Village Declaration and Operation Procedure 2081 mentions that women entrepreneurs can establish special industrial villages and industrial villages can also be established with the investment of the private sector. In order to attract and encourage women entrepreneurs towards industry, special industrial villages for women entrepreneurs have also been arranged so that only women entrepreneurs can set up industries.