Illegal imports hurt small industries

By Gopal Devkota

BIRGUNJ, Dec 26 - Most of the small and cottage industries of Parsa district have been badly affected by the influx of illegally imported Indian goods. Some of them have been forced to down their shutters as well.

Of the total 4 thousand 1 hundred and 2 industries registered with the Small and cottage Industries Office Parsa, only 7 hundred and 77 are still in operation. Of them, 1 thousand 4 hundred and 91 industries were liquidated about a month ago, and only 1 thousand 32 renewed their licence in the current fiscal year.

Local entrepreneurs, businessmen and government officials attribute the reason behind ailment of the industries and subsequent closure, mainly to the illegal inflow of the Indian goods. Federation of Nepalese Chambers of Commerce and Industry (FNCCI) reports that Indian goods worth Rs 10 billion have been entering illegally, annually.

"The local cottage industries’ produce cannot compete with the Indian products," says Ram Prasad Sainju, Chief Industry Officer. And, the industries still in operation are mostly packaging industries, he adds.

The rice mills, incense and spice industries are the ones especially affected by the ever-increasing unlawful import of Indian rice, incense and spices. Another reason behind their weak performance is the lack of industrial skills.

Though a number of skill development training was imparted in the district, there is still a dearth of skilled manpower, it is said. And a very small number of trained people are working in those enterprises.

According to Sainju, most of the worker-participants are not keen on being trained rather they participate in the training programmes for the sake of training allowance. Another reason behind the poor performance of the small and cottage industries is that the loans taken to start those industries are siphoned off to other sectors. Even the closed industries have taken loans. This is an instance of the misuse of loan facilities, he adds.

To arrest this malpractice, all banking transactions of the industries should be routed through the District Office of the Small and Cottage Industries. Above all, the first step to revive the industries would be to stop the flow of the unauthorised import of Indian goods immediately, he says.

Apart from the small and cottage industries, big industries too are facing adverse affect by the illegal import of Indians products. Annapurna Textiles can be taken as an example. Similarly, steel and cement factories are also threatened by the illegal imports of Indian products.

The closure of small and cottage industries has rendered over 10 thousand people jobless, according to a local entrepreneur.

Financial sector performance impressive in FY 1999/2000

Post Report

KATHMANDU, Dec 26 - Despite impressive performance of the primary and the secondary markets, which saw a good leap in paid-up value, the Nepse Index and market capitalisation, among others during the fiscal year 1999/2000, the annual securities turnover dropped by over 22 per cent, according to the annual report issued by the Securities Board, Tuesday.

The annual securities turnover in the last fiscal year, as compared to 1998/99, dropped by over 22 per cent to touch Rs 1.16 billion. As such, securities transaction in 1999/2000 occupied only 2.68 per cent of the total market value, against 6.38 per cent the previous year.

However, Nepse Index had showed a tremendous growth from initial 143.78 points to a year-end index of 360.70. Similarly, flow of capital in 1999/2000 touched Rs 537 million, an increment of over 108 per cent as compared to the capital float in the previous year. While 4 joint companies in 1998/99 issued shares, the number increased to 9 in the following year, the report reads.

Similarly, the secondary market in 1999/2000 saw the listing of three more new companies, pulling the number of listed companies with Nepal Stock Exchange (Nepse), the only secondary market of the country, to 110 from 107. The paid up value of listed companies in the last fiscal year touched Rs 7482.2 million, up by 15.35 per cent as compared to the value at the end of 1998/99. Commercial banks lead the list with share of total paid up capital of 33 per cent, followed by producing and processing companies at 30.67 per cent and hotels by 13.78 per cent.

Market capitalisation in the same period has increased by 83.44 per cent to touch 43.12 billion rupees, the maximum participation being that of commercial banks at 65.75 per cent followed by producing and processing companies at 13.50 per cent, according to the report.

Finally, the report also includes the annual evaluation of Mutual Funds and Unit Schemes. In addition, it also includes the initiatives undertaken by the Securities Board to upgrade securities legislation, including drafting of the new Securities Act, amending the Company Act and preparing new bye-laws and guidelines, among other reform initiatives.