The data on how much capacity utilization industries are operating at reveals the state of the country's economy. The production data of Nepal's industries is disappointing. According to the Economic Activity Report of the National Bank, the average capacity utilization of industries across the country in the fiscal year 2081/82 was 44.5 percent.

The capacity utilization of industries has decreased by an average of 3.8 percentage points in the last fiscal year compared to the previous fiscal year. In industrially developed countries, it is found that the capacity utilization of industries is 75-85 percent. However, in our country, the capacity utilization of industries is less than half, which is hindering the expansion of the economy.

This is having a direct and indirect impact on everything from job creation to development and construction. Therefore, it is necessary for the government to create an industry-friendly environment, develop infrastructure including electricity and roads, and introduce incentive programs such as increasing the purchasing power of the people.

The report of the National Bank has shown that the capacity utilization of the tire and tube industry was the highest at 90.7 percent in the last fiscal year, and the capacity utilization of the vegetable ghee producing industry was the lowest at 1.10 percent. It has been seen that the capacity utilization of the industries producing vegetable ghee, soybean oil, biscuits, noodles, beer, cigarettes, synthetic fabrics, plastic products, iron rods and sheets, steel products, GI pipes and transformers has increased.

The capacity utilization of industries producing mustard oil and processed milk has decreased. Similarly, the capacity utilization of industries producing rice, wheat flour, animal feed, sugar, chocolate, processed tea, alcohol, soft drinks, yarn, pashmina, garments, jute goods, bricks, cement, household metal goods, aluminum products, electrical wires and cables, tires and tubes, slippers and electricity has also decreased, the report states.

If an industry is producing only half of its capacity, it means that the production is very low. If it is not able to produce according to its capacity, first of all, investors are discouraged from investing in their own investments. There is no incentive to invest in additional and new areas.

Low production also reduces profits. In addition, when production is reduced, the price per unit of production increases. This leads to higher prices for the related products. This situation increases the price in the market. On the other hand, when industries cannot operate at their own capacity, the jobs created by those industries are reduced.

When the number of unemployed increases, people do not have money in their hands. In such a situation, demand decreases. At that time, industries have to reduce production. This creates a negative cycle. Citizens are tormented by the situation of job loss and rising prices.

When industries reduce their profits along with production, the revenue they pay also decreases. Gross domestic product decreases. The economic capacity of the state becomes weak and it cannot spend on development. Public welfare plans cannot be made public and implemented. Citizens cannot get the proper facilities they deserve from an economically weak state.

In such a situation, the lower class people lose the guardianship of the state. This increases dissatisfaction among citizens towards the state. As dissatisfaction and anger among citizens increase, political instability may arise through movements and rebellions. One of the reasons why political instability is a regular occurrence in our country is the unemployment among citizens and the lack of protection from the state.

There is insecurity in industries. Political instability has lowered the morale of industrialists and businessmen. Even though the bank has accumulated loanable funds and interest rates have reached historic lows, there has been no demand for loans. One result of the many problems faced by industrialists is the reduction in production. But the problem is not limited to the industrial sector.

Because, the problems seen in the overall economy have also affected the capacity utilization of industries. For years, the state has not been able to make satisfactory capital expenditures. The pace of construction of large infrastructures built with state investment is very slow.

If the state could make ample capital expenditures and accelerate the construction of large projects, employment would be created. Money would reach people's hands. Demand would increase. That would ultimately create pressure on industries to increase production. That would also create employment in the industry. A virtuous cycle would be created.

In our country, there are also misunderstandings between policy makers and implementing agencies and industrialists. One example of this is the dispute over dedicated and trunk lines. The dispute over electricity consumed by the industry has not been resolved.

As a result, the power lines of the industry are cut from time to time. Such misunderstandings should be ended promptly. The government should guarantee peace and security. Investment in large infrastructure and productive sectors should be increased. Similarly, the government should facilitate road infrastructure, which contributes to the transportation of raw materials and the marketing of manufactured goods.