Govt invests Rs. 704 bn in PEs while gets returns Rs. 8.83 bn

Kathmandu, May 30: The investment of the government in public enterprises has reached Rs. 703.93 billion in the fiscal year 2023/24. 

However, the returns on this massive investment remain minimal, with dividends amounting to only Rs. 8.83 billion—a return rate of just 2.4 per cent on share investments.

According to the annual report of the Public Enterprises for the fiscal year 2023/24 presented by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel at the House of Representative on Thursday, the government investment in the public enterprises has increased by 5.86 per cent to Rs. 703.93 billion.

Of this, share investment is Rs. 364.86 billion and loans Rs. 339.07 billion.

Presenting the report, DPM Paudel said that the government has received only Rs. 8.83 billion in dividend from the public enterprises in the fiscal year 2023/24. 

When analysing the dividend ratio compared to the total share investment, it is 2.4 per cent in the fiscal year 2023/24, said DPM Paudel.

The dividend received from the public enterprises reduced during the review period as compared to previous fiscal year 2022/23. 

The government had received Rs 13.75 billion in dividends from public corporations in the fiscal year 2022/23.

In the fiscal year 2023/24, the total assets of public enterprises increased by 2.20 per cent from the previous fiscal year to Rs. 2,910.17 billion.

Only 28 entities making profit

There are currently 45 public corporations operating in Nepal, spanning various industrial, commercial, service, social, public utility, and financial sectors. Of these, 20 are fully government-owned and 25 are majority-owned by the government.

Of the operating enterprises, 28 are profitable, 15 are in loss, and two have been closed. 

The net profit of the government-owned public enterprises has decreased significantly in the fiscal year 2023/24. According to the annual report, the net profit of public enterprises decreased by 12.88 per cent to Rs. 42.62 billion in the fiscal year 2023/24. 

The net loss of loss-making enterprises is recorded at Rs. 3.63 billion. 

The net profit of profitable corporations has decreased by 11.50 per cent during the review period compared to the previous fiscal year, while the net loss of loss-making corporations has increased by 8.65 per cent compared to the previous year. The total operating income of the public enterprises reached Rs. 660.15 billion in the fiscal year 2023/24, which is 0.22 per cent less than the previous fiscal year 2022/23.

The ratio of operating income to gross domestic product is 11.57 per cent.

Stating that public institutions have been playing an important role in the economic and social development of the country, DPM Paudel said that there is a need for further improvement in the institutional structure, operation, policy, action plan, financial discipline, transparency, accountability, efficiency and service delivery of these institutions.