KATHMANDU, June 2: The government earned a mere 2.4 percent return on its share capital invested in public enterprises during the 2023/24 fiscal year, reflecting the poor performance of these state-owned entities.
The Annual Performance Review of Public Enterprises 2025 reveals that the total government investment—comprising both share capital and loans—in public enterprises reached Rs 703.93 billion by the end of last fiscal year. This marked a 5.86 percent increase from Rs 664.94 billion in the previous year. Of this total investment, 51.83 percent was equity shares, while loans accounted for 48.17 percent.
Despite this substantial investment, the government received dividends amounting to just Rs 8.83 billion in the last fiscal year, a sharp decline of 35.78 percent compared to Rs 13.75 billion in 2022/23.
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Currently, 45 public enterprises operate nationwide; 20 are fully government-owned, while the government holds majority stakes in the remaining 25. Among these, 28 posted profits, 15 recorded losses, and two are currently non-operational.
During the review period, the government received dividends from only seven entities, mainly those in public utilities, services, and financial institutions. Enterprises in the manufacturing, social, and commercial sectors contributed no returns to the state treasury.
According to the Ministry of Finance report, Nepal Dursanchar Company Limited accounted for 74.56 percent of total government returns. Government-run banks and financial institutions generated Rs 1.90 billion, while service sector entities contributed a modest Rs 342.2 million.
Net profits of public enterprises stood at Rs 42.62 billion in 2023/24, down 11.50 percent from the previous year. Conversely, losses from loss-making entities rose by 8.65 percent to Rs 3.63 billion.
Nepal Airlines Corporation suffered the largest loss at Rs 1.04 billion; the government’s share investment in the national carrier stands at Rs 3.10 billion. Other major losses were recorded by Nepal Water Supply Corporation (Rs 407.6 million), Hetauda Cement Udyog (Rs 334.2 million), Janak Education Materials Center (Rs 265.9 million), and Public Service Broadcasting Nepal (Rs 258.4 million).
Total assets of public enterprises increased by 2.20 percent to Rs 2.91 trillion in 2023/24. Their annual operating income reached Rs 660.15 billion, contributing 11.57 percent to the country’s gross domestic product.
The dismal performance of government-run enterprises raises serious concerns over the effectiveness of public investment. Bimal Wagle, former chairperson of the Public Enterprises Board, attributed the decline in financial performance to government neglect and inefficiency in managing these entities.