Meaning of Industry
Ans:- An industry is a group of manufacturers that produced a particular kinds of goods and services. Industry includes the processing of new materials and manufacture of goods in factories with the objective of earning money.
Types of Industries
1. Cottage and small scale industries
2. Medium scale industries
3. Large scale industries
1. What is Cottage and Small Scale Industries? Explain its importance.
Ans:- Cottage industries are those industries which are carried on at home using on resources. Cottage industries are home based rather than factory based.
In other words, cottage industry is one which is carried with the help of family members either as a whole or part time occupation. The cottage industry of Nepal includes the making of Nepal paper, shoemaking, carpet making, khukuries and so on.
Small scale industries are generally operated as a full-time occupation in both rural and urban areas. Small scale industries can’t be operated only by family members so they are mostly run by hired labors. Cloth weaving, blanket weaving, wood carving, furniture making, agro based industries etc. are the some of the examples of small scale industries.
According two industrial policy 2011, “those industries which have fixed capital investment up to 5 crore are called small scale industries.”
# Importance of cottage and small scale industries.
Ans:- Nepal is an agricultural based country. This agriculture is also dependent on season. Due to this there is high unemployment and disguised unemployment in Nepal. In this situation Cottage and small scale industries has played an important role in solving the problem of unemployment and raising the national income. The main importance of Cottage and small scale industries are explained below:
i) Easy to establish:- Cottage and small scale industries do not required more capital. These industries can be easily established in different parts of country even with small amount of capital.
ii) Employment opportunities:- Agriculture provides only seasonal employment and rest of the time people remain unemployed. The development of Cottage and small scale industries can be generated employment opportunities and can solve the problem of unemployment.
iii) Basis of large scale industries:- Cottage and small scale industries are the basis of large scale industries. People learn management skills, techniques from such industries. The development of Cottage and small scale industries will increase the income and purchasing power of people. This extends the market for large scale industries.
iv) Utilization of local raw-materials:- Various types of raw materials are found in different parts of country. The local raw materials like a stone, wood, etc. can be used by utilizing these resources in cottage and small scale industries.
v) Subsidiary source of income:- If cottage industries could be developed in rural area, seasonal employment could be made available to most of the rural people. They can get extra work which help to earn additional income. Therefore Cottage and small scale industries are additional source of income of rural areas people.
vi) Source of foreign exchange:- The various kinds of goods like carpet, khukuries, furniture etc. are sold in international market. They have to earn foreign currencies by exporting these goods.
vii) Preservation of traditional art, skill and culture:- Cottage and small scale industries plays an important role in preserving local arts, skills and culture. The productions of goods from these industries represent local art and culture of different part of the country. The handicraft goods of Nepal have become popular in foreign market.
viii) Source of national income:- Small scale industries provides employment opportunities which lead to increase per capita income and national income of the country. The products of Cottage and small scale industries can be exported to be foreign countries which also help to increase national income. The government also receives free charge and tax from Cottage and small scale industries.
ix) Reduction of regional disparities:- Cottage and small scale industries increase the income of the people and reduces the gap between rich and poor. We can reduce the poverty by expanding small scale industries.
2. Explain th problem of cottage and small scale industries in Nepal.
Ans:- The development of Cottage and small scale industries is very low. Due to low level of saving, people can’t invest the large amount of money in industries. And those small scale industries which are running are unable to achieve satisfactory progress. The problem faced by the Cottage and small scale industries are discussed below:
i) Lack of capital:- The entrepreneurs have skill and other resources but along with that adequate capital is required for the development of Cottage and small scale industries. They do not have enough capital to mobilize the industries. As a result, the Cottage and small scale industries could not be developed.
ii) Lack of credit facilities:- The major problem of Cottage and small scale industries is not availability of credit facilities. The banks and financial institution do not provide loan to such industries due to poor repaying capacity. And given financial institution are not ready to provide credit on low rate of interest.
iii) Unable to compete with large industries:- Cottage and small scale industries are using traditional technology for the production of goods. The produced goods are of low quality and more expensive as compared to the goods produced by large scale industries. Therefore these industries are unable to compete with large industries.
iv) Lack of skilled manpower:- The Cottage and small scale industries cannot employ qualified managers and engineers because they cannot pay highest wages. And the use of unskilled labor reduces the quality of product.
v) Lack of raw materials:- The small producers do not get enough raw materials. They are generally provided by lower quality raw materials. The goods become expensive when raw materials are imported from other country. This makes them less competitive in both domestic and international market.
vi) Lack of transport and advertisement:- Transport And advertisement both are most essential factor in order to develop these industries. Due to the lack of facilities, consumers are unaware about their product. So the demand of the product could not be increased.
vii) Limited market:- The market system has not been developed in Nepal. The size of market is small and there is open border with India too. There is influe of cheaper and superior goods in the foreign market. These industries cannot compete with Indian product within its on boundary.
viii) Lack of protection:- The Cottage and small scale industries of Nepal have been competing with the important products. Neither there is adequate tariff protection nor has subsidy been provided by the government to these industries. Discourages the small scale industries.
ix) Intermediaries exploitation:- The purchasing capacity of Cottage and small scale industries are low. Due to this, they cannot afford marketing of the product at huge level. So they compelled to sell their product to intermediaries and major proof it is taken by intermediaries.
3. What is Medium and large Scale Industries? Explain its importance.
Ans:- The industries which produces the goods in large amount by using more capital, efficient manpower, improved machine, equipment and technology are known as medium and large scale industries.
According to industrial policies, “the industries having fixed investment of more than. 500000 to Rs.15,00,00,000 are taken the medium scale industries and industries having fixed investment above Rs.15,00,00,000 have been classified as the large scale industries.”
# Importance of medium and large scale industries.
Ans:- The importance of medium and large scale industries are mentioned below:
i) Increase employment opportunity:- There is problem of unemployment in Nepal due to seasonal nature of agriculture. The development of medium and large scale industries helps to increase employment opportunity in Nepal.
ii) Proper utilization of resources:- Nepal has various important natural resources. These resources are not fully utilized due to lack of industrial development in Nepal. The development of medium and large scale industries helps to utilize the available natural resources and present exporting of these resources to other country.
iii) Raising standard of living:- The establishment and development of medium and large scale industries provides employment and increase the income of the people. The regular incomes of the people from the industries have to raise the living standard of people.
iv) Development of basic infrastructure:- Medium and large scale industries can’t developed without proper infrastructure like transport, communication, electricity, banking etc. So, along with the development of industries, developments of infrastructure also increase simultaneously.
v) Modernization of agriculture:- The development of industries helps to modernize agriculture sector because only large scale industries produces machinery, equipment, chemical fertilizers etc. which are required for modernization of agriculture.
vi) Increase in export:- Nepal imports consumer goods as well as capital goods from different countries. The development of medium and large scale industries promote export and reduce import. Therefore, it helps to balance of payment of a country favorable.
vii) Source of government revenue:- The Government received revenue from the industries in the form of income tax, VAT, custom duty, excise duty, etc. with the development of medium and large scale industries. Therefore, it helps to increase government revenue.
viii) Capital formation:- Medium and large scale industries helps to accelerate the process of capital formulation within the country. Development of these industries helps to expand the capital market by providing investment opportunity to the people which is the basis of economic development.
4. Explain the problem faced by medium and large scale industries in Nepal?
Ans:- The problems faced by medium and large scale industries in Nepal are explained below:
i) Lack of capital:- The development of medium and large scale industry required huge amount of capital investment. Nepalese investors don’t have adequate investment capacity due to low per capita income. Hence, lack of capital is the main problem of industrial development.
ii) Lack of infrastructure:- Infrastructure like transport, communication, electricity etc. are most important factor for the development of large scale industries. But these basic infrastructures are not sufficiently developed in Nepal, which is an obstacle for the development of such industries.
iii) Lack of raw materials:- Medium and large scale industries requires raw material in huge quantity regularly in Nepal, most of the raw materials are found in remote areas and their availability not act right time. Therefore, there is lacking of raw material in Nepal due to this such industries are compelled to import raw material from abroad.
iv) Limited market:- The domestic market for industrial product is limited due to low purchasing power and the existing market is spoiling by open border with India. These industries are unable to compete with Indian product.
v) Lack of managerial skill:- The development of medium and large scale industries depends upon managerial skill. But Nepal doesn’t have sufficient technical manpower. Therefore foreign experts have to imported, who are very expensive and not available when required.
5. Write the meaning of tourism. Discuss the importance/role of tourism industry in Nepal.
Ans:- An art of travel from one place to another place of a country as well as from one country to another country is called tourism. Such traveler is known as tourist. The main purposes of tourist are entertainment, mountaineering, sight seen, tracking, voting etc. Beside these the objective of tourism is to take political information, religious information, economic information, trade information etc. An activity ensured for necessary arrangement of tourist is called industries.
Tourism today is not only a fun activity. Rather It is also the industry which draws, accommodates, entertained tourism and helps to generate income for the country.
# Importance/role of tourism industry in Nepal.
Ans:- It is observed that tourism industries is established as one of the most important sector of Nepalese economy. It contributes to GDP, foreign exchange earnings, revenue to government and employment. The role of tourism in Nepalese economy is explained below:
i) Source of foreign exchange:- Tourism sector is one of the important sources of foreign exchange earning in Nepal. It helps in correcting trade imbalance. During the fiscal year 2014/15 total foreign exchange earning from tourism sector was Rs.53 billion and 42 crore which 5.3 % of total foreign exchange earning and 2.5 % of GDP.
ii) Increase in employment opportunities:- With the development of tourism sector, the problem of unemployment can be reduced. Because as tourism sector expands, different businesses like hotel, lodges, travel agency etc. also expands. This increases employment opportunities and increases the income of the people which in inturned helps to increase standard of living.
iii) Development of cottage industries:- Cottage Industry produces different product based on art and culture of the country. Tourists are interested to buy products. Tourism creates market for the handicraft products.
iv) Cultural exchange:- Tourism industries helps to exchange art and culture between Nepal and rest of the world. A tourist carries his culture with him. In the same way, tourists are also influenced by the culture of inhabitants of the country destination.
v) Increase government revenue:- Tourism is also a source of government revenue. The government earn revenue from tax, visa fee etc. This increases the government revenue.
vi) Development of infrastructure:- Tourist are interested in sight seen, tracking, Rock climbing, boating, rafting etc. for this purposes infrastructure should be developed. Therefore with the development of tourism industry, the development of infrastructure increases simultaneously.
6. Explain the prospect of tourism industry in Nepal.
Ans:- The prospect of tourism industry in Nepal are explained below:
i) Natural beauty:- Nepal has number of Himalayas, plenty of pleasant lacks, attractive dense, pleasant Waterfalls, rare animals. All these things enhance natural beauties of Nepal and these beauties attracts tourist from different parts of the world.
ii) Cultural variety:- Nepal is a multi ethnic and multicultural nation with over 60 different ethnic groups. Each ethnic group has its on culture who is top tourist enjoy cultural varieties. Therefore they are interested to study such cultural varieties.
iii) Climatic variety:- Nepal is a multi ethnic and multi culture nation with over 60 different ethnic groups. Each group has its own culture. Tourist enjoying cultural varieties. Therefore they are interested to study such cultural varieties.
iv) Climatic verity:- Nepal has different climates. Himalayan region has very cold climate, Hilly region has a moderate climate and Terai region has very warm climate. There for tourist from different countries can choose the climate as they prefer. Therefore climate verity also attract tourist.
v) Religious places:- There are many religion in Nepal. Among them Hindus, Buddhism, Christianity are more common. Hindus as well as Buddhism are main religion here. Pashupatinath, Krishna mandir, Ram Jhanki are Hindus temple all these attract the people from the word.
vi) Wildlife:- There are various types of wild animals in Nepal. The wild life conservation areas are located in different parts of the country. Tourist can see different kinds of animals, birds and plants. These things attract tourists from different part of the world.
vii) Ancient art and culture:- There are various temples and building which reflects specimen of ancient art and culture. Darbar square of Kathmandu, Patan and Bhaktapur are some of the examples. All these attracts tourist from different parts of the world.
7. What are the problems of tourism industry in Nepal?
Ans:- The problems of tourism industries in Nepal are explained below:
i) Lack of transport and communication facilities:- Transport and communication facilities has not been developed sufficiently. Due to this reason tourism industry is not well developed.
ii) Lack of quality hotels:- Foreign tourist needs five star hotel with modern facilities. But such good quality hotels are limited in number. Most of these are located only in Kathmandu, Pokhara, Chitwan and Lumbini.
iii) Lack of trained manpower:- The tourist guide are limited in number in Nepal. And they are not even well trained due to lack of training facilities. Therefore this is lack of qualified and well trained manpower.
iv) Lack of re-creation center:- Means of re-creation like clubs, cinemas, Park, rafting, boating etc. are very limited in Nepal. And due to absence of re-creation facilities the average duration of stay of tourist are very low.
v) Pollution:- Most of the towns of Nepal are suffering from environment pollution. Due to lack of proper waste management there is sound pollution, air pollution and water pollution. Due to this, the environment of tourism spot is spoiling. This has decreased the average duration of stay of tourist in Nepal.
vi) Lack of publicity and advertisement:- There is lack of publicity and advertisement of various tourist sights of Nepal in international market. Therefore they are unable to know various tourism sights of Nepal.
vii) Lack of security:- Due to existing political disturbance are strikes in Nepal, there is lack of security in tourism destination areas. This has created insecurity and unreliable situation to tourist.
8. What is Public Enterprises? Write down the objectives of public enterprises.
Ans:- A public enterprise is a business organization owned and managed by government with a view to maximize social welfare and economic goods and services.
According to A H Hansen, “a public enterprise means state on ownership and operation of industrial agricultural, financial and commercial undertakings.”
# Objectives of public enterprises
Ans:- The public enterprises are established with the following objectives:
i) To distribute goods and services to the public at reasonable price..
ii) To achieve balanced socio-economic development by providing basic infrastructure.
iii) To achieve social, economic and political objectives of the country.
iv) To generate employment opportunities.
v) To correct unfavorable balance of payment by import substitution and export promotion.
vi) To mobilize public saving.
vii) To utilize and safeguard the national resources and heritage.
viii) To control private sectors monopoly.
ix) To help generate National revenue.
9. What are the importance of public enterprises?
Ans:- The importance of public enterprises are as follow:
i) Establishment of basic industries:- Public enterprises invest a large amount of money in establishing large scale industries. They take risk to establish basic industries in which private sectors hesitate due to high risk.
ii) Planned development:- The public enterprises are playing important role for the planned economic development of the nation. It helps to maximize the volume of production and utilization of resources. The proper use of national resources supports for economic development.
iii) Balance development:- The main objective of establishment of public enterprise in different regions is the balanced economic development. All the region of Nepal by supported for proper utilization of resources of those regions.
iv) Creation of employment:- Government can create employment opportunities by establishing public enterprise in various regions of the country. Therefore people can get employment opportunities in the enterprises according to their qualification, experience and knowledge.
v) Development of infrastructure:- The development of infrastructure is very important for the promotion of trade in the country. So that public enterprises have more contribution for the development of infrastructure facilities. Search as communication, electricity, Bank Ltd., transportation, etc.
vi) Source of government revenue:- Public enterprises pays various taxes to the government. Such as custom duty, import duty, export tax etc. Government can utilize such revenue for infrastructure development of the country.
10. Discuss the characteristics of public enterprises.
Ans:- The characteristics of public enterprises are discussed below:
i) Government ownership:- Public enterprises are established under the ownership of the government or at least 51% of total shares or totally 100% share are held by the government.
ii) Government management and control:- Government earned 51% of total shares or totally 100% of shares. So it is fully owned by government. Government authorities take active part in management and control of public enterprises.
iii) Separate legal entity:- Public enterprises have separate legal entity. It is established in its own name. It can hold property, borrowed debts its etc. only its own name. It is created by law and dissolved by the law.
iv) Perpetual succession:- Perpetual succession is another important feature of public enterprises. It is not affected by death, change government policy in its regular business activities. It can be dissolved only after completion of certain legal proceedings.
v) Service motive:- The concept of public enterprises is developed in the principal to provide goods and services to the public at minimum cost. Its main motive is to provide renders service to the general people at reasonable price. Secondary motive is to earn minimum profit to meet higher expenditure.
vi) Monopoly in business:- Some public enterprise have a Monopoly power in their own sector of business . Public enterprises involved in those sector where private undertaking do not show interest in the initial stage due to huge investment and low rate of return. Public enterprises have Monopoly power in business like Nepal oil Corporation, Nepal electricity authority.
vii) Public accountability:- It is accountable to the general public. The board of directors and executives of the enterprises are accountable for their performance to the parliament.
11. Write about current status of public enterprises in Nepal.
Ans:- Nepal has been adopting the mixed economic system which shows that there is existence of both public and private sectors in the economy. Public enterprises are operating under six broad sectors in Nepal. At present there are 37 public enterprises in Nepal. The six sectors based on their functions or services as shown below:
| S.N | Nature of public enterprises | Numbers |
| i. | Industrial sector | 7 |
| ii. | Commercial sector | 6 |
| iii. | Service sector | 7 |
| iv. | Social sector | 5 |
| v. | Public utility | 3 |
| vi. | Financial sector | 9 |
| Total | 37 |
Economic survey 2015/16
The government is investing large amount of money in public enterprises every year. Many of these enterprises in the initial years of their establishment recorded satisfactory performance. But the overall performance of public enterprises in Nepal is not satisfactory. The large amount of investment of the government is miss utilize. Therefore the Government of Nepal started privatization. In the year 2016/17 public enterprises has shown satisfactory performance to some extent.
Public enterprises earn net profit totaling rupees 42.67 million in 2017, growth of 18.5% compare to previous fiscal year. This shows that there is certain improvement in their financial position.
Among 37 public enterprises in the country, 26 made profit while 11 were suffering from Loss. Nepal Telecom made the largest net profit of RS.15.37 billion. Nepal bank limited has recorded the net profit of Rs.3.11 billion and agricultural Development Bank profit is Rs. 2.56 billion. On the other hand, Nepal water supply Corporation suffer a loss of Rs.207.9 million and Nepal drug limited suffered a loss of Rs. 138 million.