National Economic Census: A Window To Progress

Nandalal Tiwari

The preliminary results of the first ever National Economic Census (NEC) made public recently by the Central Bureau of Statistics showed that there are 922,445 business enterprises across the country employing about 3,408,746 people as of April 2018. The NEC has given a picture about the spread of businesses at provincial and local levels as well. With the final result of the Census which is expected to come out within a year, it will be clearer about what kinds of enterprises were being operated in which places and what their business status was.

However, the preliminary results can be taken as baseline with regard to number of businesses and people employed in them for the government to show its progress in terms of increase in employment and business firms. The preliminary results are doubly important also because they have been published at a time when the country has a stable government for the next four years. The Industrial Survey which is planned for 2077 BS (2020) will further help to see the spread and status of the industries across the country. The statistics will certainly help the government to make appropriate policy for industrial growth which undoubtedly contributes to economic development.
In the annual budget for this fiscal year, the government announced that it will establish industrial estate in each of the local level within the next three years. The NEC report will surely provide a big help in this regard. With the data about the number of enterprises in each of the local level presented in the NEC report, now the policy planners can focus on what kind of industrial estate can be established where and what are the possible difficulties in different levels.
Similarly, the government in the budget also pledged that it would create additional 500 thousand jobs for the people in this fiscal year and economic growth would be 8 per cent. Now, as the NEC report has in a way collected data about the total number of businesses operated in the country (although the data is yet to be verified or compared with the other government agencies which register the businesses) and the number of people employed in them, it will be easy for the government to prove its achievement in this regard by showing increased number of enterprises or people employed in them. However, from now onward, the government should use data, not words, to present its progress. And this is the most important aspect of the NEC report. It should be noted here that over 500,000 youths enter the Nepali labour market per year.
According to the World Bank report in April 2018, Nepal needs to create at least 286, 900 jobs per year to keep the employment rate of 68 per cent as recorded in the same time, April 2018. In the other way, unemployment rate in Nepal is over 32 per cent despite the fact that over four million people are working abroad. According to the 2008 Labour Force Survey (LFS), wage employment accounted for 16.9 per cent of total employment while self-employment accounted for 83.1 per cent in 2008. It is highly likely that the trend has not increased much given the fact that about 70 per cent people are still engaged in agriculture. Increase in wage employment certainly indicates increase in the industrial firms.
Recent data shows that Nepal’s trade deficit is alarmingly widening. In the first month of this fiscal year, import went up by 57 per cent while export increase meagerly by about 3 per cent. Trade deficit for the month stood at Rs. 120 billion. If this trend continues, it is likely that trade deficit for this fiscal will be over Rs. 1.2 trillion or 12 billion USD. Given the country receives about 8 billion USD as remittance and earns about a billion USD from tourism and export, Nepal will need additional 3 billion UDS to cover its trade deficit. This situation demands that the government should take appropriate measures to establish enterprises for import substitution products or focus opening businesses that produce export items.
The NEC preliminary results show that an enterprise employs on average 3.7 people in Nepal, which is very low compared to other countries. In other ways, many enterprises in the country are run single-handedly, for instance stationery. As the NEC is focused on business firms of all kinds, we have to wait for industrial survey to get a picture of industries in Nepal. But, industrial survey is to be conducted after two years and it is a long period given the fact that the country is in dire need of urgent actions to tackle challenges posed by skyrocketing import or widening trade deficit. For the time being, the NEC should be taken as a basis to move forward for a comparatively self-reliant economy.

Programmes such as Prime Minister Employment Programme, Prime Minister Agriculture Modernisation Project that are included in the budget should be implemented strictly, effectively and promptly. It should be noted here that Nepal imports agricultural products worth Rs. 50 billion a year. The budget also states that infrastructure will be built within this fiscal year for at least 20 industrial villages in each of the 7 provinces.
It is high time that the government took steps for implementing these plans. Moreover, the government should also take measure so that national products are preferred to foreign items. Ever widening trade deficit, status of enterprises as presented in the NEC and unemployment rate in the country should be put together to make a plan for achieving the vision of Prosperous Nepal, Happy Nepali.

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