Economic Entities and Employment Distribution in Nepal: Where to Focus for Post-Pandemic Recovery?

Distribution of Economic Units by Broad Industrial Classification Table I presents that there were 9,23,356 business units (establishments) in 2018 by division of economic sector.  There are equal numbers of registered, 50.1 percent, and non-registered, 49.9 percent, establishments in Nepal. 

In Nepal, the main activities of the economic units are Wholesale and retail trade including repair of motor vehicles and motorcycles (53.9 percent); followed by accommodation and food (14.1 percent); manufacturing (11.3 percent) and ather  activities (20.7 percent).

In Nepal, ‘wholesale and retail trade’ is main establishment is followed by ‘accommodation and food’ while 'manufacturing' is in the third position in terms of number of establishments in Nepal. However,  if we observe in terms of employment (engagement) ‘wholesale and retail trade’ is followed by ‘education’ and ‘manufacturing’ in the third and ‘accommodation and food’ is in the fourth position in terms of number of establishments in Nepal. This reflects, service sector is the main sector in terms of  employment of people in Nepal.

Table 1 Main Economic Activities in Nepal
Types	Share (%)	Total Businesses		Employment or Engagement of Persons
				1-10	11-50	51-100	101 &over
	100	923,356		96.0	3.6	0.2	0.2
Wholesale, retail trade	53.9	498,069		53.6	0.3	0.0	0.0
Accommodation, food	14.1	130,540		13.9	0.2	0.0	0.0
Manufacturing	11.3	104,058		10.8	0.4	0.1	0.1
Others Remaining	20.7	190,689		17.6	2.7	0.2	0.1
Source: Economic Census, 2018 available at www.cbs.gov.np www.sumanneupane.blogspot.com

In 9,23,356 economic units, most are small and medium size industries. Where 96 percent of economic units have engaged (employed) 1-10 people, while there are 3.6 percent businesses which have engaged (employed) within 11 to 50 employees.

Table II: Employment (Persons Engaged) in Number (based on Economic Census, 2018)
Sectors	% Share	Total
All Industries		3,228,457
Wholesale, retail trade	30.6	988,346
Education	15.9	513,336
Manufacturing	15.8	510,523
Accommodation, food	10.7	346,273
Financial, insurance	6.4	206,979
Others All	20.5	663,000
Source: Economic Census, 2018 available at www.cbs.gov.np
www.sumanneupane.blogspot.com

The economic census shows that out 9,23,356 business units provide employment to 32,28,457 people in Nepal. It includes only registered businesses in agriculture and both registered and non registered business in all other sectors. Thus, to cushion the loss in employment, the government should focus to revive small and medium size business that employs 1-50 people per businesses and it is 98 percent of the total businesses in Nepal. 

to be continued .....