Industries operating with grants shutting down

By Naurate Nepali,Sinja (Jumla), Sep1: Over the past few years, industries operated through grants from government and non-government organisations in Jumla have failed to achieve sustainability and are now shutting down one after another.

Entrepreneurs complain that especially production-oriented industries have relied solely on grants rather than establishing sustainable foundations, making it difficult to ensure continuity. As industries close, both investors and local business owners are suffering losses. 

The closures have also negatively impacted local employment. Many unemployed youths are now being drawn towards foreign employment as a result.

According to the entrepreneurs, while grants may offer temporary support, the lack of attention to long-term business planning and market management has led to the current crisis.

Local entrepreneurs are urging the government to prioritise commercial loans, technical training, and market assurance over direct grants for production-based industries. Although many rushed to register industries in hopes of receiving grants, a recent tightening of grant distribution policies has led to a rise in industry cancellations and shutdowns.

Industries registered in a large number each year have neither been able to process and produce effectively nor contributed significantly to job creation. In Jumla, grant-driven industries outnumber sustainable, profit-oriented, and business-friendly production enterprises. 

The common practice of registering an industry to obtain grants and then shutting it down once the funds are exhausted has resulted in neither increased production nor employment generation.

According to data from the Industry and Consumer Interests Protection Office in Jumla, a total of 825 production-based industries have been officially cancelled to date. Office head Mandir Nath Yogi informed that the number of closures has increased ever since grant access has declined.

According to him, out of all registered industries, 1,535 production-oriented industries are inactive, having ceased operations or processing activities, although they have not yet been legally deregistered. In fiscal year 2023/24, 81 production-based industries were officially closed.

To date, a total of 7,682 industries have been registered in Jumla. Of these, 4,417 are in the production sector and 3,265 are in the trading sector, while 6,147 are currently operational and 1,348 industries have closed. 

In trading, out of the 3,265 registered industries, 3,078 remain in operation, while 187 have closed. 

Entrepreneur Narayani Chaulagain said that a lack of transparency in grant distribution has placed genuine entrepreneurs at risk. Some individuals receive grants multiple times, while others receive none at all. 

Poor dissemination of information means that only the well-connected benefit, further hindering industrial development in Jumla.

Bhrikuti Nepali, President of the Federation of Nepal Cottage and Small Industries, Jumla Chapter, said that policy-level initiatives would be undertaken to address the rising trend of industrial closures in the region.