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August 1, 1976 Regmi Research (Private) Ltd Kathmandu: August 1, 1976 Regmi Research Series Year 8 , No • 8 , Edited by Mahesh c. Regmi. ******* Contents 1. Industrial nev�l0pment in Page ••• Nepal 1936-57 141 2. King Prithvi Narayan Shah ••• 147 3. On Disciplinary Matters ... 156 4. Miscellaneous r::ocurrents of Magh 1887 Vikramu •• • 158 ********** Regmi Research ( Private) Ltd Lazimpat, Kathmandu, Nepal Compiled by Regmi Research (Priva te) Ltd for private study and research.Not rreant for p ublic sale or display. 141. Industrial Development in Nepal 1936-57 By Mahesh c. Regmi (First publishE..d in mimeographed form in 1957 under the title "Industrial Potential of Nepal"). Chapter 5 Recent Developments The interim Government was compelled forthwith to face .formidable problems in the sphere of industry as a lt:gacy le ft by tbe previous government. Moreover, the strikes in the Biratnagar mills c_r onnected with the political distur­ bances which had helped the new governrrent to corre into power, .had created new problems. The first action of tht:? new Government in the sphere of joint stock industry was to convene an Industrial Conference at Kathrrendu, in w hich the Minister for Industries and eomrrerce, Ganesh Man Singh, outlined a program for the establishment of an Industrial Finance·corporation, together with other measures designed to h�lp industry. No concrete results however emerged from tte c onference. It was al::out this time that the new companies Act drafted by the p revious government was put into operation. Attempts in the sphere of cottage industries during the early days of the interim governrrentr_rto effect a thoro­ ugh reorganization of the r::epartm ent of cottage I ndustries proved abortive. mainly because of the failure of the authorities to agree oo the f_undamentals of a n.aw policy. Though the Government recogni.zed that "owing to the hilly feature o f our country, the cottag� industrie s .Wi ll have a very important pla9e in our economy", (Government of Nepal, .oepartrrent of publicit y: "One year of democracy", May 1952, q u::ited in Y.P� pant ; Planning for Prosperity, pp. 72), yet very l�ttle wa s done beyond the expression contd. • •• 142. of pious hopes and intentions. Similarly, on April 1954, the Prime Minister, Matrika Prasad Koirala, announced a 40 po int program of devel0prrcnt, which also included the devei0pment of village industries and the establishment of industries fo r increased employment, (K.p. Srivastava: Nepal Ki Kahani, pp. 200-201 ), b ut this was all wriat t he country ever heard in the matter. Meanwhile a significant change in the 'situation took place in 19 53 wbe:n the Ford Foundation ·came forward w itn __ a grant o f $100,000 for the deve l0pment o f cottage industries< in Nepal. A survey o f snBll and cottage industries in the valley of Katlrrnandu was t2ken up conjointly with the Govern­ mGnt _of Nepal, and the t,epartrrcnt o f Cottage Industri'es emerged under the new appellation of'Tribhuwan Rural Deve­ lapment I:Epartment. cRe ently however, it has beenagai n o rgan izcd as a separate C::nti·ty. The mo st important measure adopted by the Government in recent years has wen the fran,ing of thE.! Draft Five Year Plan for the national davel0pment. This attempt at planning does not howev(:r seem to have reen the first one. Just before the out brGak of the ,:.,econd World War, the Rana Prime J'Yiinister, .Judd.ha Shumshere, · h-:=1d announced a 20-year plan, (Y.P. Pant: Planning for Prosperity, pp. 15),1 which presumably was droppGd b2causc o f the exigencies of. t;� war situation. On October 31,1949, Mohun Shumsh0re set up a ·' National Planning Committee which was entrusted wit,h the task of preparing a i5-year plan for the economic develcp- ment o f tre co untry (Ibid, pp, 15-lli). With the formatioo o f the Interim Government, however, the National Plannin� Corrrnittee, which never appears to have been taken seriously� bee ame defunct. On October 9, 1955 King Mahcndra issued a royal pro- -.t clamaticn rega(rding the necessity o f a Five Y8ar P�an for 1'.1epal for attaining national self-sufficiency and establi-. shing a welfare state. The Draft outline of the. plan ,was .... published, followed by the publication of th<.:? synopsis of the Draft Five Year Plan o n September 21, 1956. "The Draft· Five Year Plan fo r ·Nepal aims to present in outline a . ,,_:;J pr ctical ro � p gram fo r economic ar;a Sfl-::i al ';1evclopmcnt up �·\(·(- wh:1.ch. all elements of the population can un1t12 with confi. _( _,., _(..__( ­ and enthusiasm. 11 (Gove(rnment of Nepal, Ministry of PlannmJ'}• . ""'� .-,J. contd. • •• 143. and D evel opn ent ,.Dr aft Five Ye a r Plan , A synop s is, pp. 1) . In the sphe re of industr ies, the general objec t ives, "W ill incl ude a revival an d expan sion o:f cottage industrie s se le cted on the basis of their q uality and capacity t o surv ive ; encourage ment to private savings and inve strrent · in pro ductive enterprises , and o f fore igi:1 capital un de r appropriQte safeguard s, as sistance to e xist ing indust ires req ui ring he lp when there is a ba sis for reasonable c onfide nce in the future soundne s s of the ente rpr ise s 1 inten­ si fication of surveys and re se arch essential t o wise p lann ing; fo ste ring technological . tra in ing ,e· technological advancesi n product ion , and a j isc riminating use of fo re ign te chnical aid ; a bro adening of the channe l s of communication and understandi ng between Gove rnment and Industry; study an d recomme nd at ions on needed le gi s lat jOp;and the mainten anc e of clo se work ing re lations among all departmen ts of the Government concer ned directly o r in directly with proble ms 11 relating to industrial deve 10prrent . (Ib id, pp. 55)e. However , "Specific obj ect ive s and targets w ill be set onlye. after s urv ey s and re search provide ht e data essential for making such de term inat ions in regard to spec ific industrial p lant s. 11 ( Ibid, pp . 5 5) • The Dra ft Plan a lso envisages the division of the industrial sphe re into two sector s-, publ ic and p r ivate. The problem will however be approached from a pract ical rattier than a the ori tical or doc trin aire st andpoint. "Our a im is a mixed economy, with government a-Jner ship an d ope rat ion where this is clear ly neede d in the publ ic. interest , or where private capital is unable to launch an -urgently neede d and s o und enterpr i se • • •••'. But it is not proposed that Gover nment shall undertake , w ith its already hea v i ly taxe d personnel ·and financial r esources' the burdens-of inve s tm8 nt an d management when private i ntere st, which should c arry a substantial share of new investme nts, ar� able to do the job as we ll. or bet ter. In such c asesr,i the policy of th�e- Government w ill be to encourage private initiat ive in deve l0ping a diversi fied p attern o f indust rial producti cn i- by assuring opportunity fo r a profi table re turn up on invcsmt net, by provid ing in forma­ t ion and guidance wheD fea sible, and ·by exerc izing only suc h regulatory authority a s may ·be -needed to proetecte· the Contd••.• 144. t intere st of the community as a whol e. A t he samc ,tirre, it is proposed that the Governmen t shall' take steps to improve the "climate " for i nve sment thro uqh such mea s ure s as tax revision s and currenc y stabil izat ion .e" (Ibid , p p . 7-8)e. Tentat ively, pri or ity con s ide rat ion will be given to industr ies fo r the product ion of cement , forest , products, sugar, text ile s , c i gare ttes., irone. (Ibid, pp . 55) • · In the sphere of cottage in dustries, the .plan e nv i s age s the creation oe f trainin g-cum-production centre s in different p art s of the country, at l east one each ye ar , to dev elop and improve de signs , quality production, and �k ill s, There is prov isi on for sma ll loans to be made to trainees to start the ir OMn operations on an in dividual or co0perat ive bas i s , and sale of tools and m achines on in stalrrE::nt payme nt terms. Help will al so be provide d to them in procur ing r aw mate ­ rials economically and marke t ing their finished products. ( Ib id, pp . 5 5 -56) • Other me asures fo r the encourageme nt of the industrial devel0p�en t of the coun try me nt ioned in the Dra ft Plan are the e stabl i shoo nt of an In dustrial Rese arc h Bureau, t he ma in purp o se: of which w ill be to colelect and an al ys e in formatiCO '"' and then p ass it on to Governme nt an d to private firms for :· nece ssary .:1c tion ; th-:! training of techn ic al and o thE'.
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