Overview of Nepalese Economy

Nepal is a geographically landlocked country situated between two large countries, India and China. It is a small country with an area of 1,47,181 square km. Economically, Nepal is a least developed country and agriculture is the main occupation. Only about 18 percent of the total area is cultivated. Although Nepal has high potential in water resources, this potential is not utilized.

Contemporary Features of Nepalese Economy

i. Mass poverty

Poverty is the major problem of the Nepalese economy. According to the economic survey 2022/23, 18.7% of people are still living below the poverty line. The future of the poor is also not bright due to the vicious circle of poverty. There is high economic inequality alongside poverty, and the volume and ratio of poverty are even higher in the hill and mountain regions.

ii. Dualistic economy

The Nepalese economy is dualistic in nature. Complete monetization, developed trade and commerce, developed industries, and money and capital markets are found in city areas. On the other hand, the barter system still exists in villages and rural areas, where agriculture and other occupations are run at subsistence level. Due to low agricultural productivity, lack of employment and high population growth, people migrate from rural areas to urban areas and foreign countries.

iii. Heavy dependence on agriculture

Nepal is an agricultural country. About 65 percent of the total labour force (active population) is involved in agriculture. According to the economic survey 2022/23, the contribution of agriculture (agriculture, forest and fisheries) to GDP was 28.95 percent, and agriculture makes up 50-60 percent of export trade. Lack of irrigation, low productivity, traditional methods and disguised unemployment are some features of Nepalese agriculture.