Report says, the contribution of the private sector to employment is 85 percent

A study report has shown that the private sector's contribution to Nepal's gross domestic product (GDP) is 81.55 percent. The study report conducted by the Federation of Nepal Chamber of Commerce and Industry and the International Finance Corporation (IFC) on 'Contributions and Obstacles of the Private Sector in Nepal' has shown this.

The report also claims that the private sector has contributed 85.6 percent to the country's total employment. Therefore, the report concludes that the role of the private sector is very important for the expansion of Nepal's economy. According to the report, 28 thousand 660 industries were established in 1983 and 923 thousand 356 were established in 2018. According to the report, private sector industrial establishments have come significantly in the last three decades.

Chanda Prasad Dhakal, President of the Federation of Nepalese Industries and Commerce, said that for the first time in Nepal, a study report on the contribution of the private sector to the economy has been published and it has given a solid basis why the private sector should be respected. He said that the report pointed out the need to address private sector-friendly policies and practical issues.

The study has shown that the private sector contributes 81 percent to the economy. This means that if the private sector does not flourish, the economy itself will be in trouble," President Dhakal said in a public program on the contribution of the private sector to the economy on Thursday. The industry, trade and construction sector is negative.'

As a result, the expected economic growth rate of 8 percent has been limited to 2 percent. Dhakal also said that as the revenue has decreased by 16 percent, it is becoming difficult for the government to meet its current expenses.

He also claims that since the private sector cannot provide more jobs in such a situation, 6 lakh youths are forced to go abroad for work in 9 months. There is no longer any doubt that the leading role of the private sector is necessary for sustainable economic development. The starting point of that reform should be this time's budget,' said Dhakal.

The report mentions that opportunities should be given to the private sector in investment areas with comparative advantage and in new areas. "There is a need for a special program in the production and export of minerals including iron in Nepal," the report said. Gravel, stones and sand are piled up in various rivers. Dhakal said that since the report shows that it is possible to earn about two billion dollars annually from its use, we should promote the items of comparative advantage while minimizing the environmental impact.

A major share of employment is in agriculture, forestry, fisheries, 57 percent and 12.5 percent in wholesale and retail trade, including vehicle repair. Such industries are mainly operated by the private sector. In 2018, the private sector employed only 5.5 million and the public sector employed only 427,000, it is mentioned in the report.

The report analyzed the data from the financial year 2011/12 to 2020/21 and assessed the contribution of the private sector in Nepal and the current context. The report claims that it is the first attempt to create a comprehensive baseline for the entire private sector of Nepal.

It combines the analysis of both published and unpublished secondary data to provide the contribution of the private sector in the Nepalese economy. Babakar S. Fai, resident representative of the corporation for Nepal, said that the report further sheds light on the important contribution of the private sector in the socio-economic development of Nepal.

According to the report, it will help to better inform and encourage the dialogue between the public and private sector, as well as create policies that will reveal the full potential of entrepreneurs.

Industries Minister Ramesh Rizal says that the private sector has a significant role in the country's revenue collection and job creation. "Necessary policies and rules will have to be made to bring in more investment in the private sector," he said.

Minister Rizal said that the report will help to make the private sector more active by creating an investment-friendly environment and create necessary policies. He said that the government is also positive on this issue as the issue of dignity of the private sector has also been raised.

"The private sector and the government should work together to improve the economy in the long term," he said.