According to concerned government officials, Finance Minister Surendra Pandey has already instructed senior officials of the Ministry of Finance (MoF) to initiate groundwork for necessary amendment. "The legal division of the ministry has started consultations with all concerned stakeholders for the changes and it can be expected that the MoF will be able to table the amendment before parliament within two months," said the official.
The main purpose of the planned changes is to curb growing bad practices of awarding bonus to employees in government enterprises that were able to generate profits in a fiscal year but have huge cumulative losses.
"We have many instances where boards of the directors of government enterprises with chronic financial condition were compelled, often forcefully, to declare bonus even though they have a huge amount of accumulated loss," said the official.
The main purpose of the planned amendment is to stop such bad practices and bar PEs from declaring bonus, if they have accumulated loss as the government cannot take unlimited financial liabilities of loss-making PEs.
According to Economic Survey issued by the MoF, currently 36 PEs are operating under full or majority ownership of the government of which seven are in the industrial sector, six in the trading sector, seven in the service sector, five in the social sector, three in the public utility sector and eight in the financial sector.
In fiscal year 2007/08, the government received Rs 1.51 billion as dividend from four PEs, which was about 1.85 percent of the total share investment. The overall net profit of the PEs dropped to Rs 4.94 billion 2007/08 from Rs 7.74 billion in 2006/07.
The PEs mainly contributing to the net profits were Nepal Telecom and Rastriya Banijya Bank, which earned net profit of Rs 7.94 billion and Rs. 1.77 billion respectively. Likewise, the loss of Nepal Oil Corporation sharply rose to Rs. 5.57 billion in 2007/08 from Rs 1.92 billion in preceding year, leading to the decline in overall net profit. Net fixed asset of the 36 public enterprises reached Rs 124.89 billion at the end of 2007/08 from Rs. 110.61 billion in 2006/07.
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