Govt’s Rs 703 billion investment in PEs yields only Rs 8 billion dividends

KATHMANDU: The government’s investment in public enterprises (PEs) has exceeded Rs 703 billion.

According to the Annual Performance Review of Public Enterprises presented by Finance Minister Bishnu Prasad Poudel on Thursday, the government has invested Rs 364.86 billion in these enterprises in the form of share capital and Rs 339.07 billion as loans.

However, these enterprises delivered returns of mere Rs 8 billion to the government. The dividend ratio, which measures the return on the government’s share investment, stood at just 2.4% in 2023/24, according to the report. This means that the government received only Rs 2.4 as dividends for every Rs 100 invested.

According to the report, 45 public enterprises generated a combined profit of Rs 42.62 billion, a 12% decrease compared to the previous fiscal year. Only 28 of these enterprises were profitable, while 15 operated at a loss and the remaining two were not in operation.

Minister Paudel stressed the need for comprehensive reforms in institutional frameworks, governance structures, operational efficiency, financial discipline, transparency, accountability, and service delivery to enhance return on public investment and ensure fiscal sustainability in these enterprises.

Of the total public enterprises, 10 are in the industrial sector, four in the trade sector, 11 in the service sector, five each in the social and utility sector and 10 in the financial sector.