Role of Industrial District Management in

Industrial Development

Amrit Khanal
Baburam Subedi
Himalaya Ban
Muna Baral
Ritu Malekoo
Suas Amatya

January 10, 2014
Presented by:
General Background
Industrialization process began 75 years ago when
Udyog Parishad (Industrial Council) was constituted
in 1935 and Company Act was enacted in 1937 with
an aim to promote agriculture, industry and
commerce.
Nepals industrialization process got momentum
from 1936, the year when Indian capital began to
flow into Nepal to take advantages of the available
cheap raw materials and labor.
The first known industry was established was
Biratnagar Jute Mill, a collaborative venture of India
and Nepali entrepreneurs with initial capital of
160,000 Indian rupees

Industrial District Management (IDM)
GON established Industrial District Management Limited as
a separate corporate entity in July 1988.
It was entrusted with the overall management and
supervision of all Industrial Districts and performs tasks
such as conducting feasibility studies of Industrial Districts
in potential areas, materializing new Industrial Districts and
planning and promotion of industries therein.
IDM is wholly an undertaking of GON incorporated under
the Company Act in the form of a Public Limited Company.
Its shareholders are GON, Ministry of Industry, The Office
of Comptroller General and NIDC
It has an authorized capital of NPRs.150 million and issued
capital of NPRs.140 million.

Contd.
Balaju is the first industrial district established
with the financial assistance of USA in 1960 A.D.
GON has established 11 IDs in different parts of
country under the assistance from various donor
countries
Out of 11 IDs, 10 IDs : Balaju, Patan, Hetauda,
Dharan, Nepalgunj, Pokhara, Butwal, Bhaktapur,
Birendranagar and Gajendranarayan
Singh(Rajbiraj) are in operation and one at
Dhankuta, is in Work In Progress.
Organization Structure
Industrial District Management Limited
Board Of Directors
General Manager
Administration &
Finance
Operation
Division
Planning &
Development
Company
Secretarial
Finance HRM
Internal Audit
Objectives of IDM
To provide infrastructure facilities to industries in Industrial District
To study potentiality for establishment of Industrials District and
promote new Industrials District in feasible areas.
To stimulate private sector in setting up Industrials District in
promising area and extend technical and other services if required.
To promote industries in the Industrials District and undertake the
overall management and supervision of the Industrials District
To identify problems of industrial units set up in the Industrials
District and provide management consultancy and extension
services for their smooth operation and productivity improvement
To disseminate information on feasible projects, facilities available
in the IDs and opportunities therein for investment.
To study the implication of government policies and make
recommendations to Government
Statement of the problem
What is the role of Industrial District Management Company in
Industry development of Nepal?
What could be the possible causes for the poor functioning of
IDM?
Why many industries are closed in different industrials district?
What is the problem behind this?
Why government investment is too low as compared to private
investment?
How would you encourage and facilitate new manufacturing
industries?
What are the current problems for IDM?
How can you increase your role in industrial development of
Nepal?

Objective of Study
The study mainly focuses on exploratory
analysis of role of IDM in industrial
development of Nepal.
The study mainly tries to find out the
working and functions of IDM.
The present and future prospective of
analysis is also found out. Likewise the
problems and necessary recommendations
are also performed.
Significance of Study
The study would be significant to
students, researchers, academicians
and business people for the general
understanding of industrialization in
Nepal and IDM roles in its
promotion.

Organization of study
The study has been divided to 4 parts.
The chapter 1 deals with the introduction, objective,
significance o study.
The chapter 2 deals with research methodology and
deals with various tools used to conduct the study.
The chapter 3 deals with presentation and data
analysis. It specifies the current and future position
of IDM and problems faced by IDM in performing its
role.
The chapter 4 deals with the summary and
conclusion section.

Research Methodology
Research Design
This research is based upon theoretical analysis and uses
only simple graphical and tabulation methods.
Data Collection Procedure
Primary Sources
The data were collected through face to face interview
methods with the employees of IDM.
Secondary Sources
Secondary sources of datas were also collected from
website of IDM. Meanwhile, several journals, articles
and newspaper were also referred regarding the working
of IDM.

DATA PRESENTATION AND
ANALYSIS !!!
Facilities provided by IDM
Low cost initial investment Land
Warehouse
Basic physical infrastructures RDCWF
Supporting facilities - Bank, Post Office,
Clinic.
One window services - Approval of layout
plan/ design/ construction work proposed
by industrial units or reduce Admin cost.
Industrial
District
Developed Leased
Not
Leased
Service
sector
Undeveloped
Total
Area
Balaju 670 540 0 130 0 670
Patan 293 220 0 73 0 293
Hetauda 2506 1904 0 602 323 2506
Dharan 202 134 6 62 0 202
Nepalgunj 233 189 0 44 0 233
Pokhara 501 397 0 104 0 501
Butwol 406 348 0 58 28 406
Bhaktapur 71 58 0 13 0 71
Birendranagar 90 66 0 24 0 90
Dhankuta 0 0 0 0 63 0
G.N.Singh 171 17 13 141 123 171
Total Area 5680 19 537 5143
Area Utilization
0
10
20
30
40
50
60
70
80
90
100
A
r
e
a

i
n

P
e
r
c
e
n
t
a
g
e

Industrial District
Area Utilization
Developed
Leased
Service sector
Undeveloped
Not Leased
Industrial District
Government Investment Private Investment
Total
Ropani % Ropani %
Balaju 62.2 2 3120 98 3182.2
Patan 40.1 2 1700 98 1740.1
Hetauda 53.3 1 5020 99 5073.3
Dharan 13 4 300 96 313
Nepalgunj 17.5 1 1952 99 1969.5
Pokhara 28.2 2 1830 98 1858.2
Butwol 23 1 2701 99 2724
Bhaktapur 22.4 4 590 96 612.4
Birendranagar 15.4 51 15 49 30.4
Dhankuta 5.6 100 0 0 5.6
G.N.Singh 48.6 58 35 42 83.6
Total 329.3 17263
Investment Portfolio
0
10
20
30
40
50
60
70
80
90
100
2 2
1
4
1
2
1
4
51
100
58
98 98
99
96
99
98
99
96
49
0
42
P
e
r
c
e
n
t
a
g
e

Industrial District
Investment Portfolio
Government
Investment
Private
Investment
Industrial Districts
No. of
industries
Running Under construction Closed
No. % No. % No. %
Balaju 131 97 74 26 20 8 6
Patan 112 102 91 5 4 5 4
Hetauda 100 63 63 17 17 14 14
Dharan 34 24 71 9 26 1 3
Nepalgunj 35 30 86 4 11 1 3
Pokhara 76 61 80 5 7 10 13
Butwol 71 62 87 2 3 7 10
Bhaktapur 37 35 95 0 0 2 5
Birendranagar 28 22 79 6 21 0 0
Dhankuta 0 0 0 0 0 0 0
G.N.Singh 4 2 50 1 25 1 25
Situation of Industries
0
10
20
30
40
50
60
70
80
90
100
74
91
63
71
86
80
87
95
79
0
50
I
n

P
e
r
c
e
n
t
a
g
e

Industrial Districts
Industry Situations
Running
Under
Construction
Closed
Company Future Plan
Expanding the Hetauda Industrial
Districts - Occupied by Hetauda
Textile
New IDs/IEs, IDM has conducted
feasibility study and preliminary
surveys has finished and they are in
pipeline
Proposed IDs/IEs
District Location Remark
Nuwakot Battar Feasible
Janakpur Dhalkebar Feasible
Sankhuwasabha Jaisi Gaon Conditionally Feasible
Illam Golakharka/Godak Conditionally Feasible
Chitwan Bharatpur Feasible
Kanchanpur Mahendranagar / Dhaiji Feasible
Lamjung Sundar Bazar/Benisahar Feasible
Kavrepalanchowk Subba VDC Feasible
Jhapa Charali Feasible
Mahottari Jaleshwor Feasible
Dang Lamahi(Kulmod) Feasible
Tanahu Groiund Naya Basti Feasible
Kailali Dhangadi (geta) Feasible
Butwol Ramnagar(Near Butwol ID) Feasible
A Critical Analysis of IDM Nepal
with IDC South Africa
What they Do!!!
IDC provides finance for industrial
development projects, playing a
catalytic role in promoting
partnerships across industries
within and outside our borders,
promoting regional economic
growth
How they Do!!!
By proactively identifying and funding of
high-impact and labor-intensive projects.
By leading the creation of viable new
industries;
By using their diverse industry expertise
to drive growth in priority sectors; and
By taking up higher-risk funding projects.
IDC in Sustainable Environment
Protection
Encouraging compliance by all their
applicants;
Managing the impacts of all projects
Promoting the responsible use of all
resources; and
Encouraging the use of
environmentally-friendly products.
Development Funds for Industrial
Development
IDC provides support to projects
that have a high developmental
impact and will, over time, grow
the economy.
Emphasizes growth, employment
creation and equity generation.
IDC hands-on approach for
Industrial Development
They provide expertise and
knowledge to each project.
Monitor the progress of the
Project
Gather regular reports from our
investees.
How their Support help the
Economy!
Job creation;
Developing small and medium enterprises;
Developing rural areas and underdeveloped
provinces and regions; and
Boosting Broad-based Black Economic
Empowerment and empowering people who were
previously excluded from participating in the
economy.
What we Experience!!!
These all Lacks In IDM
We dont have prioritize our industries
We do not Enhance Manufacturing
Competitiveness
We do not Provide funds for project
development, planning, & Expansion
We do not provide Expertise Service

Our Proposed Model !!!
Manufacturing
Industries
Energy-Based
Industries
Agro and
forest-Based
Industries
Mineral
Industries
Tourism
Industries
Ser vice
Industries
Construction
Industries
How it Work?
Need Sufficient Budget for Smooth Operation
Work as Integrated Body
Why we need NIB ??
Why We need SEZ , rather they should be part
of IDM or IDC??
Same type and Same Nature organization should
merged on IDM
It must be autonomous Body of Ministry of
Industry
Result
Industrial Innovation
Increased Employment
Increased Economic Activity
Increased National Production
Increased in GDP
Increased NI
Increased Income Level
Improve Living Standard
Finally National Prosperity
Summary
The establishment of industrial council in 1935 and
promulgation of the Company Act 1937 was the first
milestone for industrialization growth in Nepal.
Furthermore, as time passed government of Nepal felt a
strong emphasis to the development of industry for the
economic development of Nepal. Thus Industrial District
Management Limited was established in July 1988.
It was entrusted with the overall management and
supervision of all Industrial Districts plus other tasks such
as conducting feasibility studies of Industrial Districts in
potential areas, materializing new Industrial Districts and
planning and promotion of industries therein.
Contd.
The IDM has now developed 10 such districts and
proposed to develop about 14 such districts in
various parts of the country.
Meanwhile, the fact however still remains that
government of Nepal has been only playing an
assistance role and not fully being involved in the
set up of government industry.
In most of the district the investment of
government to private sector was 20% to 80%.



Major Finding:

Poor infrastructure within industrial district or
industrial state.
Lack of micro management in industrial estates
such as Road, Drainage, Culvert, Electricity, Water
supply, Water filtration.
No any systematic arrangement of industrial site
and location like no proper care given for
Occupational Health and Safety when establishing
the new industry.
Limited operation area. IDM does not concern
with the industries outside the industrial district

Contd
Lack of sufficient budget for smooth operation
and functioning. The revenue source of IDM is
only rent and lease from land and building that is
comparatively lower than existing market rates.
No proactive planning and no new research of
industrial districts on timely basis for promoting
industrial innovation.
No proper coordination between different
ministry and department of Govt.
Conclusion
The study emphasis towards role of IDM in Industrial
Development of Nepal.
The industrialization started by the Panchayat
Government was followed and developed by the
Multi party democracy party after 2046 peoples
revolution and same continued throughout the
Maoist insurgency periods and till now,
The research concludes that although much has been
changed and developed in other developing nation.
It is still not so worthy from Nepalese perspective.
The strong private sector and weak government and
IDM have profited the private sector. However, the
condition of IDM that helped to promote and grow
industrialization is not degrading day by day.
Recommendation
It is suggested to search new source of revenue for IDM operation
and management
It is advised for micro management of industrial districts like Road,
Drainage, Culvert, Electricity, Water supply, Water filtration
services.
Establishment of proper system for establishing new industry
within industrial district
It is suggested on proper maintenance of existing infrastructure of
IDM.
Reduction of centralized power and authority to different regional
office of IDM should be done.
Identification of the national priority sectors for industrial
development should be performed.
Contd.
It is advised to bring special schemes to increase the
competitiveness of manufacturing of manufacturing
industries.
Hiring of professional manpower for proper functioning
of IDM is vital for proper functioning of IDM.
International co-operation for technological know-how
and new innovation in industrial development of Nepal
should be performed to be globally competitive
The electing of different member in BOD of IDM in from
Business community and employee community and
should be based on transparent and uniform manner to
implement timely and concrete decisions.
Speaking Picture
Speaking Picture
Speaking Picture
Short Glimpse