Secondary and Tertiary Sector Development- Status,Contribution to National Economy, Challenges

Secondary Sector

The secondary sector combines raw materials and transforms them into finished goods. The manufacturing sector deals with the production of finished items like vehicles as well as the primary sector's raw materials like coke and iron. These manufactured commodities are offered for sale in the service industry. The manufacturing industries employ these industries to source raw materials before producing steel, which is then used to make other products like automobiles and bicycles. Between 2000-01 and 2012-13, the sector's per-capita reduction was 0.2 percent, and it decreased from 9 percent to 6.2 percent of the GDP.

According to a government, Nepal's manufacturing sector has experienced a fall in per capita growth over the past ten years. Manufacturing was the only industry that experienced a decline during that time among those that contributed to the national economy. Between 2000-01 and 2012-13, the Maoist insurgency, an unstable governmental structure, a power crisis, and labor issues caused a 0.2 percent per capita decline in the industry. According to the report Development of Manufacturing Industries in Nepal: Current State and Future Challenge, secondary sector GDP decreased from 9 percent to 6.2 percent in 2013 in addition to the reduction in per capita growth. When compared to the other South Asian nations, Nepal has the lowest manufacturing GDP contribution, with Bangladesh having the largest contribution (17.6%). According to the report, Nepal's manufacturing sector suffered in the last ten years. Fastest expanding industries were fisheries (5.1%), electricity and water (4.1%), transportation, storage, and communication (4.8%), financial intermediation (6.6%), and other services (all together approximately 6%). Another astounding finding according to the survey is that the manufacturing sector contributes to more traditional industries for comparatively high-tech ones. The value addition in manufacturing subsectors like food has increased from 22.8 percent in 1996 to 34 percent in 2011. Over the period, the cost of textiles ranges from 25.9 to 3.8 percent, while the cost of clothing and fur ranges from 6.3 to 0.5 percent.

Contribution to National Economy

Although Nepal's manufacturing is still in its early stages of development, it plays a significant role in the industrial sector in terms of both its share and growth. The manufacturing sector's contribution to GDP increased from about 6% during the period (1985/86-1989/90) to about 10% in recent years. The early 1990s saw the largest increase in the manufacturing value added percentage of the GDP. For instance, it rose by 2% in 1991–1992. Following extensive policy reforms, Nepal's industrial sector expanded more quickly—at a rate of 25 percent annually—in the early 1990s. It was unable to maintain the industrial sector's faster expansion throughout the years 1990/91 to 1994/95. Since 1992–1993, the growth rate has decreased, albeit with sporadic changes. Growth has recently decreased and is now even negative for the current year. The elimination of protection from non-Indian markets, which has exacerbated the issue of competitiveness in the absence of compensating policies for the promotion of infant industries, can be used to explain the stagnation and decline of the manufacturing sector in addition to the unstable political environment.

Tertiary Sector Status

Industries in the service sector have been essential to Nepal's development. Such industries have contributed to secondary industries as well as trade promotion. Tourism, transportation, communication, and information construction, as well as the finance industry, are all key service businesses. In 2000, Nepal had a net services trade surplus of US$ 217 million. This surplus gradually decreased, and by 2007, it had converted into a deficit of US$ 377 million. Although service imports climbed from 2007 to 2013 at an average annual pace of 11% to reach US$ 964.2 million, service exports have recovered significantly over the past two years at a rate of 22% p.a. and in 2013 had reached US$ 962 million. As a result, the net services trade deficit in 2013 was decreased to $ 2 million. Services now account for 13% of all exports, up from 11% in 2012. The significant subsector that has experienced the strongest growth is travel and communication services, which also export communications services. The government implemented a new trade strategy in April 2009 with the intention of boosting the economic contribution sector for trade by recognizing trade in services as a potential area of growth for the nation. the service industry includes

• Tourism Industry
  • Through the protection and promotion of Nepal's natural, cultural, biological, and man-made legacies, the country can be developed into an alluring, enjoyable, and secure tourist destination. In order to contribute to the economy, the nation must grow its tourism industry; quality services must be offered to visitors in order to increase foreign exchange profits from tourism; and employment possibilities must be created.
• Transportation Industry
  • In Nepal, the transportation sector is still in its infancy. Road, air, and water transportation are all related industries. The growth of transportation is essential for the development of the nation's economy, trade, and other management-related auxiliary sectors. Since Nepal is a landlocked nation, there is no water transportation system there. Thus, the only modes of transportation in Nepal are by road and by air.
• Information and Communication Industry
  • The growth of information and communication services is impacted by scientific and technological advancements. The introduction of the internet, email, and mobile phone services revolutionized the field of information technology. Postal service, telecommunications service, broadcasting service from television, radio, printing service, motion pictures, and other similar services are vital components of information service.
• Financial Institutions
  • Financial institutions are comparable to cooperatives, non-cooperatives, commercial banks, development banks, and finance corporations. Financial institutions, liberalization policies, and the financial sector's acceptance all contributed to the increase's desirable scale. Rural areas do not experience the development or establishment of many institutions.

Contribution to National Economy

If the potential and specific policies are in the correct location, investment and growth related to services help in contributing to poverty alleviation and human development. The GON is placing more attention on the service sectors by taking into account how much such sectors contributed to GDP (more than 51% in 2007–2008), employment, foreign commerce, and payments. A number of nations throughout the world have adopted Nepal's new series of national accounts statistics, which were prepared in 2006–07. These statistics follow the SNA 1993 system. Prior to then, SNA 1968 data from Nepal was used to construct income figures. Economic activity is segmented into 15 sectors in SNA 1993 compared to 9 sectors in SNA 1968. The entire economy has been depicted or divided into 17 sectors by the ISIC. There are 15 sectors in Nepal's private households, and as foreign missionary work and INGOs account for a tiny portion of the country's gross domestic product, these sectors fall within the social and individual services category. The new series includes new tasks that weren't previously thought of, like services for microbuses and cable cars that fall under the category of transportation, PCO, mobile phones, internet, cable, and communication, as well as rent, employment agency, cooperative, consultancy, computer and photography, private postal, private sector education, community forestry, and other services. The sector contribution is indicated in the figure below.

Service contribution, http://sapkotac.blogspot.com/2013/09/nepalese-economy-in-fy2013-real-sector.html

Challenges

• Exports are replaced by the high quality of goods produced, the decline in unemployment rate brought on by the growth of the industrial sector, the production of high-quality goods to compete on 158 different international markets, and the development of an environment that is conducive to investment, which is still a challenge.
• In order to preserve their rights, which is a difficult undertaking, consumers' prices are checked via the supply system.
• The development of the Nepal Oil Corporation bottling plant that enhances and provides the stock of LPG, reduction of petroleum products reliability and LPG through the development and hydroelectricity optimum utilization, strike, agitation, and road blockade are all discouraged, and it has been a difficult task to increase the warehouse capacity of petroleum depots.
• The development of the tourist sector for the national priority through trustworthy quantification made a contribution to the economy of the country by creating the satellite account and tourism information system in order to measure the key indicators as respects tourism is full of problems.
• Building and reconstructing cultural heritage for a site that can be included to the list of World Heritage Sites by using resources for building and assisting them in being added to such site is a difficult task.

References

bbc.co.uk/schools/gcsebitesize/geography/economic_change/characteristics_industry_rev2.shtml

Flippo, Edwin B. Personnel Management. London: Oxford Press, 1980.

Gynwal, Ram Prasad. Know Nepal. Kathmandu: Bhundipuran Prakashan, 2012.

Hamilton, Francis B. An Account of the Kingdom of Nepal. New Delhi: Manjushri Publishing House, 1971.

Heywood, Andrew. Politics. New York: Palgrave Macmillan, 2002.

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