About 70 percent of registered cottage and small industries in Nepal have closed down operations as of first eight months of the current fiscal year as deteriorating business environment hit industries and investments severely, statistics disclosed in Kathmandu Saturday.

According to a statistics of Department of Cottage and Small Industries, 164,000 industries were registered with the department at the end of last fiscal year, ended on July 15, 2005.

However, only 33 percent of those are currently in operations, the statistics stated.

Concerned officials said escalating violence and political stir besides eroding competitiveness of local industries led to such a decline in industrial operations.

Executive director of Federation of Nepalese Cottage and Small Industries Manoj Bhattarai stated that every year, thousands of industries were closing down operations since the start of the conflict in the country in 1996.

"And the rate of closure have increased in recent years," he added.

The industries in hilly areas have closed down simply because of the anti-government guerrillas threat and extortion, Bhattarai added.

Forced migration of youth and entrepreneurs and fast growing trend of youths leaving villages for foreign employment also led to a rapid decline in number of industries, according to Bhattarai.

Source: Xinhua