Economics 11 Notes for Economics Notes

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Public Enterprise

Public Enterprise is an enterprise under government control. More than half of the total share of a public enterprise is owned by the government and effectively managed by the government.

Objective of public enterprises

  1. To improve economic activities.

  2. To provide goods and services to the public at fair prices.

  3. To generate the employment opportunities.

  4. For utilizing foreign aids.

  5. To develop the economic and social infrastructure.

  6. To correct the unfavorable balance of payment.

  7. To earn foreign exchange.

  8. To obtain economic, political and social objectives of the nation by mobilizing available capital and labor resources.

State the present situation of public enterprises in Nepal.

Public enterprises are operating under six broad sectors in Nepal. They are industrial, commercial, service, social, public utility and finance.

There are 36 public enterprises, 7 in industrial sector, 6 in commercial sector, 7 in commercial sector, 5 in social sector, 3 in public utility and 8 in financial sector.

S .N.   Sectors   Total   Capital investment   Gross profit (million)  
1.   Industrial   7   23884   -784.3  
2.   Commercial   6   54698   3033.1  
3.   Service   7   11733.5   1358.0  
4.   Social   5   1590.5   -292.5  
5.   Public Utility   3   121539.4   5032.4  
6.   Finance   8   79930.4   1056.6  
Total   36   222,652.0   10003.3  

Source: Ministry of Finance, 2010

The above table shows that only 4 sectors (commercial, service, public utility and finance) have earned profit and rest two (industrial and social) has faced loss during the fiscal year 2008/09, rest of the sector incurred losses. Thus, overall financial status of the public enterprises is very unsatisfactory.

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