Out of the operating institutes, 28 have made profit, 15 are in loss, two are closed, no solid plan has come in the budget to raise the institute.
Although the government increases investment in public institutions every year, the profits are decreasing. Which shows that billions of investments are being wasted without an action plan. It is mentioned in the 'Annual Status Review of Public Institutions 2082' published by the Ministry of Finance that despite the increase in investment by the government in the institute, the dividend is decreasing.
Till the review period, the total investment of the government in the institute has reached 7 trillion 3 billion 93 crores. Compared to 2079/80, the total investment has increased by 5.86 percent. But the dividend received by the government has decreased. "Total investment is 7 trillion 3 billion 93 billion, share investment is 3 trillion 64 billion 86 billion and loan investment is 3 trillion 39 billion 7 billion," the review said, "In 2079/80, 13 billion 75 billion 67 million dividends were received. In 2080/81 it decreased to 8 billion 835 million. Compared to the total share investment, the dividend ratio is 2.4 percent in 2080/81.
According to the Ministry of Finance, the total operating income of the institute has also decreased. In 2080/81, the total operating income of the institute reached 6 trillion 60 billion 15 crores, which is 0.22 percent less than in 2079/80. Although public institutions have contributed to overall economic, social, income growth and job creation, questions have been raised about the institutional structure, operations, policies, work plans, financial discipline and transparency. It is mentioned in the review that there is a need for improvement in accountability, efficiency and service delivery.
There are currently 45 public institutions operating in the industrial, commercial, service, social, utility and financial sectors. This institute has earned 42 billion 62 million 16 million profit. But compared to the last review period, this net profit is a decrease of 12.88 percent. Of the operating institutions, 28 are profitable, 15 are in loss and two are closed, the review said. Nepal Orient Magnesite Limited and Butwal Thread Factory Limited are among the loss-making companies. Dhowadi Falam Company Limited has not commenced commercial operations. Although there is no commercial business, the loss has been incurred due to the regular administrative expenses of this institute.
Although the Janakpur Cigarette Factory Limited was closed, it is mentioned in the review that the income was generated from the rent of the building and land. Nepal Infrastructure Construction Company has earned more money from interest than from the purposeful work. The review states that unclear objectives, lack of competitiveness and operational inefficiencies are among the reasons why
companies end up in crisis. Institutions have also been found to have failed due to problems such as poor management, wrongful activities of trade unions. As a result, the net loss of the loss-making institute is increasing. The net profit of the profitable institutes has also decreased.
"The net loss of loss-making institutions has increased by 8.65 percent to 3.63 billion 65 lakhs compared to last year," said the review, "The net profit of profitable institutions has decreased by 11.50 percent compared to the last financial year." It is mentioned that the implementation of policy, structural and managerial reforms is urgently needed to ensure the relevance and sustainability of problematic institutions. In 2080/81, the total accumulated profit of the institute increased to 92.72 billion 3.6 million. Nepal Telecom Company Limited has the highest accumulated profit. The cumulative profit of telecommunication is 48 billion 32 million.
The highest accumulated profits are seen in the utilities sector and losses in the industrial sector. The profit of the utility sector has increased to 94 billion 708 million. The loss of the industrial sector is 21 billion 700 million 77 million.
Although the condition of public institutions is bad, the government has not been able to bring a concrete program to improve their condition. Finance Minister Bishnu Paudel, while presenting the budget in both houses of Parliament on Thursday, said that the competitiveness of public institutions will be developed through management autonomy, technology transfer and innovation. He said that appropriate methods including restructuring, transformation into a company, and strategic partnership will be adopted to improve the management of the institute.
'Government-owned closed and sick industries will be managed using new technology based on appropriateness. Dhowadi Iron Company will be operated in a public private partnership, Paudel said, "Investment will be managed by studying the existing conditions and commercial potential of establishments including Janakpur Cigarette Factory, Gorakhkali Rubber Industry, Butwal Thread Factory, Nepal Metal Company, Nepal Orin and Magnesite, Hetaunda Cement Industry."
