Youth programmes announced but not executedAlmost all youth programmes focused on entrepreneurs have not been implemented, Auditor General's report says.
The government has been announcing youth programmes focused on entrepreneurs and the entrepreneurship ecosystem for several years, but none of them has been implemented, says the Auditor General's report.
Observers say the government does not do enough to nurture entrepreneurial skills among the country's young people.
According to the 59th Auditor General's report published on July 13, almost all youth programmes focused on entrepreneurs have not been implemented.
In 2015-16, the government set aside a Rs500-million fund to groom start-ups and innovators. The programme has not been heard of since.
In 2018-19, the government announced providing loans to youths against their educational certificate as collateral, this programme too disappeared into thin air.
In 2019-20, the government proclaimed a cash subsidy of up to Rs5 million for promising new businesses. It started preparing a work procedure, but that got nowhere.
In the fiscal year 2020-21, the government created a Rs500 million start-up fund to issue loans at 2 percent interest to encourage innovative entrepreneurs hit by the pandemic. But hopeful start-ups have not seen any of that money.
In the fiscal year 2021-22 ended Saturday, the government announced providing Rs2.5 million loans at 1 percent interest to start-ups under the Youth Entrepreneurship Challenge Fund. That programme never saw the light of day either, the audit report said.
According to the report, 700 hopeful borrowers applied for the loans, but the scheme was cancelled.
In fiscal 2021-22, the government launched a Rs15 billion project to provide subsidised loans of Rs1 million each to youths returning from foreign countries to start their own businesses. This scheme too unravelled.
The government has not been able to carry out its plan to establish business incubation centres either.
“There is lack of clarity in the government’s policies,” said economist Bishwambhar Pyakurel. "A huge budget is allocated to such programmes annually, but only a few people have benefited from them."
According to Pyakurel, only 4 percent of the applicants received assistance from the much-touted Prime Minister’s Employment Programme launched in fiscal 2020-21.
"The young people who have been toiling in foreign countries and sending back remittance and contributing to the national economy have received no benefits from the government," Pyakurel said.
“The way youths are going abroad due to lack of entrepreneurship development domestically will cause a huge loss in the long run, mostly in the country’s economic development.”
Education Ministry figures show that 12,000 to 15,000 foreign-bound students obtain no-objection certificates monthly. As of the first 11 months of fiscal 2021-22, the ministry had issued no-objection certificates to 102,873 individuals.
A total of 313,367 people received labour permits in the first 11 months of fiscal 2021-22, four times higher than in the same period in the previous fiscal year, according to Nepal Rastra Bank.
During the same period, 259,091 foreign employment permits were renewed.
Entrepreneurship has never been easy in the country due to lack of skill, entrepreneurship-oriented programmes and access to finance, said entrepreneurs.
"Lack of entrepreneurship development will have a direct impact on job creation in the near future," Pyakurel said.
In the past decade, the manufacturing sector has been able to create employment for only 1.18 percent of the population, or 3.5 million persons.
“This is very low compared to the number of people entering the job market annually,” Pyakurel said. "Nepal does not lack a productive age group, but the contribution of the youth force to the economy is less as the government has failed to create such an environment."
Santosh Pandey, co-founder of OHO Cake and Offering Happiness, says frequent changes in government and unstable political situation hinder the proper implementation of programmes and the creation of an entrepreneurship environment.
The government inserts programmes in the budget statement without any clue how to implement them, and is later forced to dump them, he said.
“Nepal does not even have a clear definition of start-up or a start-up policy,” Pandey said, adding that it would definitely create confusion when implementing programmes for start-ups.
"Making announcements through the budget statement without proper studies often leads to weak implementation of the programme with the targeted people not being able to benefit from it," he said.
"Starting a business is totally different from what is taught," said Pandey. “The government’s policy too does not help young entrepreneurs.”