Economics · Chapter 12
Study notes aligned to the official NEB syllabus.
An industry combines labour, capital, raw material and technology to produce goods that satisfy human wants. Nepal classifies industries by capital and workforce size: micro (up to about Rs 20 lakh capital, up to 9 workers), cottage (traditional skill, local material, labour intensive, under 50 kilowatts power), small scale (fixed capital up to about Rs 15 crore), medium scale (roughly Rs 15 to 50 crore), and large scale (above Rs 50 crore, modern machines). Modern industry is usually traced to the 1936 jute mill at Biratnagar; planned industrialisation began with the First Plan (1956-61), and post 1990 liberalisation shifted the state toward privatisation and private or foreign investment.
Manufacturing spans agro based industries (rice, oil, sugar, dairy, jute), construction material (cement, bricks), textiles, and cottage units like handicrafts and carpets that also feed tourism. Industry absorbs labour agriculture cannot, substitutes for imports, uses domestic raw material and hydropower, and earns foreign exchange through exports. Problems include shortage of capital and credit, outdated technology, irregular raw material supply, a small domestic market, weak infrastructure, and competition from cheaper imports; prospects lie in agro processing, hydropower based and export oriented manufacturing, and cottage units growing alongside tourism.