Sunday, 9 August, 2020

Reviving Sick Industries

Public enterprises (PEs), which are established, owned and controlled by the state, play a vital role in providing goods and services to the people at an affordable price. The idea behind the operation of public undertakings is that the government has responsibility towards the citizens. For this, it must ensure the basic services such as health, education, food and social security. The public enterprises involve the commercial and industrial ventures where the private sector is unwilling to step in and invest. It is an open secret that the private sector is guided by profit motive. There are many areas of economy that must not be allowed to be run by the private sector because the common people can’t afford the expensive services and products catered by the private sector operating under the ruthless competitive market system. The public enterprises bear the rationale that they check the market monopoly, reduce artificial shortage, make sure the fair distribution of essential goods and services, and enhance the access to financial facilities.

However, in the absence of efficient management and professionalism as well as political interference, many public enterprises have been unable to fare well in the country. Of altogether 37 PEs currently operating in their various capacities, many are struggling to find their feet and largely rely on the government for administrative and running costs. Nonetheless, there are tragic stories of PEs which were privatised impetuously under the whim of neoliberal policy in the mid-1990s. A number of PEs, which were sold dirt cheap, were in profit and had employed thousands of people but they became the victim of reckless privatisation drive. The then government and its policy makers suffered from economic delusion that the government should not run business and industries. As a result, public sector weakened with the private sector ruling the roost. The ongoing COVID-19 pandemic exposed the fault lines of pro-market economy and asserted the importance of public institutions committed to the services of commoners.

Against this backdrop, the government is mulling to revive various state-owned sick enterprises. A six-member task force, recently formed by the Ministry of Industry, Commerce and Supplies, is studying the prospects of restarting the ailing PEs. According to the news report carried by this daily, the ministry will begin the process to resuscitate those industries which have been shut down or are facing serious problems. The task force has been given a three-month period to submit the report that should analyse various industrial dimensions such as physical, financial, technical, market systems and managerial parts in accordance with the Industrial Enterprises Act 2076. It is expected to devise the modality for the revival, strengthening, operation and management of all sick, closed and problematic industries separately. It will also assess the conditions of similar industries belonging to the private sector. The ministry is gearing up to re-operate some important industries such as Butwal Dhago Udhyog, Hetauda Kapada Udhyog, Gorakhkali Rubber Udhyog, Oriental Magnetite Industry, Janakpur Cigarette Factory and Biratnagar Jute Mills. It is imperative for the committee to recommend the clear policies with regard to the reformation of industrial sector and necessary discount and facilities to the defunct industries.


How do you feel after reading this news?