Although the government's investment in public corporations increased by 13 percent, dividends appear to have decreased by 5 percent. According to the Economic Survey 2082/83 and the Annual Status Review Report of Public Corporations made public by the government, compared to the previous fiscal year, the government's share and debt investment in corporations has increased by 13.4 percent to Rs 798.56 billion. The dividends received have shrunk by 5.2 percent to Rs 8.377 billion. The survey pointed out that this situation has emerged because 16 out of a total of 45 corporations are operating at a loss. 

Among the corporations in loss, Nepal Airlines Corporation has suffered the highest loss. The corporation's accumulated loss has reached more than Rs 18.90 billion. 98 million. Corporations in the industrial sector are particularly in loss. The survey showed that corporations such as Dairy Development Corporation, Hetauda Cement Industry Limited, Nepal Drug Limited, Udayapur Cement, Nepal Orient Magnesite Pvt. Ltd., and Nepal Metal Company Limited have suffered losses. Institutions like Butwal Yarn Factory and Dhaubadi Iron Company Limited are in loss due to administrative expenses even though they are not in operation. 

Former Joint Secretary Baburam Subedi says that institutions should be viewed with two main objectives: social and commercial. He says that institutions established for commercial purposes are going into loss. Subedi's analysis is that although profit alone is not considered as an institution established for social purposes serves the people, efficiency and effectiveness within it are essential.

Market competition and technology are the main reasons for institutions in the industrial and commercial sectors going into loss. Experts point out that even though industries like Udayapur Cement and Hetauda Cement have quality raw materials, they are not able to compete with the private sector due to old technology. Former Joint Secretary Subedi comments that the industries here are not able to survive with cheap goods coming from abroad due to the open market policy and the institutions are lagging behind because technology has not improved over time. 

‘The main challenge is to maintain a proper balance between the social responsibility of public corporations to produce and distribute public goods and services and the commercial objective of making profit,’ the annual review report of public corporations states, ‘There is a lack of objective laws, policies and institutional mechanisms to realistically measure the actual return on investment made by the government in such corporations and justify the continuation of investment.’ 

Not only this, the lack of administrative procedures and autonomy also seems to be an obstacle to the efficiency of corporations. Although the private sector can immediately purchase services or goods, corporations have to complete the lengthy process of the Public Procurement Act. Due to this, Subedi believes that corporations have not been able to immediately expand services according to market demand and needs. Some corporations have not even started commercial operations, but are seen to be in losses due to the burden of administrative expenses.

‘The private sector can immediately take a procurement decision. But public corporations have to follow the Government Procurement Act, this process is time-consuming and cumbersome,' said Subedi, 'This has also weakened the competitive ability of corporations.' He suggests that new models are now needed for reform. He points out that a model of monetizing the assets of corporations while maintaining government ownership would be appropriate. 'Business efficiency can be increased by leasing vacant land owned by corporations or selling old machines that are no longer in use,' he said. 'After going into business, corporations need to be made autonomous in the decision-making process so that businesses can run as they should.' 

 However, the picture of all public corporations is not only negative. Sectorally, corporations in the financial, public utility, commercial, service and social sectors are operating profitably. Rastriya Banijya Bank, Nepal Bank, Agricultural Development Bank and Nepal Reinsurance Company, Citizens Investment Fund, Nepal Scott Exchange, among others, have earned profit. Experts point out that the work done by institutions like the Nepal Electricity Authority to expand transmission lines and provide access to electricity can be seen as positive achievements. 

Since government investment accounts for a large share of the economy, surveys and experts suggest that there should be no delay in increasing the efficiency of institutions to enable them to compete in the market. ‘It is necessary to provide institutions with an environment where they can compete in the market and autonomy in the decision-making process,’ said Subedi, ‘Institutions should also improve their efficiency.’