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Class : 11
Unit : Economics

Explain the problem faced by medium and large scale industries in Nepal?

Ans : The problems faced by medium and large scale industries in Nepal are explained below: i) Lack of capital:- The development of medium and large scale industry required huge amount of capital investment. Nepalese investors don’t have adequate investment capacity due to low per capita income. Hence, lack of capital is the main problem of industrial development. ii) Lack of infrastructure:- Infrastructure like transport, communication, electricity etc. are most important factor for the development of large scale industries. But these basic infrastructures are not sufficiently developed in Nepal, which is an obstacle for the development of such industries. iii) Lack of raw materials:- Medium and large scale industries requires raw material in huge quantity regularly in Nepal, most of the raw materials are found in remote areas and their availability not act right time. Therefore, there is lacking of raw material in Nepal due to this such industries are compelled to import raw material from abroad. iv) Limited market:- The domestic market for industrial product is limited due to low purchasing power and the existing market is spoiling by open border with India. These industries are unable to compete with Indian product. v) Lack of managerial skill:- The development of medium and large scale industries depends upon managerial skill. But Nepal doesn’t have sufficient technical manpower. Therefore foreign experts have to imported, who are very expensive and not available when required.