Economic Development In Nepal

Nepal is one of the poorest countries in the world. It is landlocked and covered by mountains as well as hills. The main profession of Nepalese people is agriculture. More than 70 percent of the people are found to be engaged in agriculture sector and rest is employed in service and industry. Unemployment is approximately 40 percent and country severely lacks skilled manpower. However, the productivity of agriculture is falling down and the population of the country is at an increasing trend. Therefore, the traditional occupation is not enough to meet the growing needs of Nepalese people. Now Nepalese people have started to think about the alternative sources of income where financial institutions have been regarded to be the core alternative

The Maoist war has led to the decrease of tourism which is the key source of foreign exchange income. Nepal has good prospects of expanding tourism and hydropower for the economic development. Low economic growth and persistent deficits in financial and trade balances in recent years have left Nepal with very limited resources for development funds needed for nation building. At present the major part of increase expenditure comes from other countries as loans and contributions. Nepal has adopted mixed economic policy 1. Many financial institutions were established within the country to achieve social economic development of the country in the study period (Economic survey

The king declared a state of emergency, imprisoned party leaders, and assumed power and took complete control of the government. The king allowed parliament to reconvene due to mass protests organized by the seven parties and the Maoists in 2006. The election of constitutional assembly is held in 2008 and the nation is declared as republic by the first meeting of constituent assembly (Khadaka, 2007). Due to such political instability the country failed to achieve satisfactory level of social and economic development and growth.

Nepal has a reasonably diversified financial sector as evidenced by the number and variety of institutions that play an active role in the society, relative to Nepal’s small and underdeveloped economic base over the past 20 years, Nepal’s financial sector has become deeper, and the number and type of financial intermediation has grown rapidly with in this period. The Nepalese financial sector has grown significantly both in terms of business volume and size of assets and market capitalization (Nepal Development Forum march