The government earned a modest 2.4 percent return on its share capital invested in public enterprises during the 2023/24 fiscal year, underlining the persistent underperformance of state-owned entities. According to the Annual Performance Review of Public Enterprises 2025, total government investment in these enterprises reached Rs 703.93 billion by the end of the last fiscal year, up 5.86 percent from Rs 664.94 billion the previous year. Of this amount, 51.83 percent represented equity investment, while loans made up 48.17 percent.
Despite this considerable financial outlay, dividend income dropped significantly. The government received just Rs 8.83 billion in dividends, marking a sharp 35.78 percent decline from the Rs 13.75 billion earned in 2022/23.
Currently, 45 public enterprises operate across the country. Twenty of them are fully government-owned, while the remaining 25 operate with majority government stakes. Among these, 28 enterprises posted profits, 15 registered losses, and two were non-operational during the review period.
Only seven enterprises, primarily in utilities, services, and finance, contributed dividends. Manufacturing, commercial, and social sector entities failed to provide any returns. The report noted that Nepal Dursanchar Company Limited alone contributed 74.56 percent of total government returns. Government-run banks and financial institutions added Rs 1.90 billion, while the service sector contributed Rs 342.2 million.
Overall, the net profits of public enterprises fell by 11.50 percent to Rs 42.62 billion in 2023/24. Meanwhile, cumulative losses among loss-making enterprises increased by 8.65 percent, reaching Rs 3.63 billion. Nepal Airlines Corporation recorded the highest loss at Rs 1.04 billion, despite the government holding Rs 3.10 billion in equity in the company. Other major loss-making entities included 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).
Public enterprises’ total assets grew by 2.20 percent to Rs 2.91 trillion. Their annual operating income reached Rs 660.15 billion, contributing 11.57 percent to Nepal’s gross domestic product.
The poor financial results have raised concerns about the efficiency of public investment. Bimal Wagle, former chairperson of the Public Enterprises Board, attributed the disappointing outcomes to weak government oversight and ineffective management practices within these institutions.
