People can never stop getting proud and happy while talking about ‘Nepal’, a small country with enormous beauty and deep cultural value. People living in Nepal are known for their friendly, caring, and cheerful behaviour, however, the majority of them succeed in hiding their problems with their wide smiles.
With every passing day Nepal is getting fame in the international field with a growing number of foreigners visiting the country everyday. Despite all the achievements, Nepal still has a long way to go and get renowned for its development and upgrading of the living standard of people living in the country.
Many people living in Nepal still have a persisting problem i.e. poverty. Though certain improvement has been observed in the economy and development, poverty has still been a serious issue.
62 Lakhs People in Nepal Living Below Poverty Line
A recent survey conducted by the World Bank based on the Nepal Living Standards Survey highlighted the uneven economic reality of Nepal. As per the survey, 20.27 percent of the total population 62 lakhs live below the poverty line. The National Statistics Office (NSO) showed that Sudurpaschim Province is the least developed region whereas Gandaki Province marked its position at the top.
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| Source: Habitat for Humanity |
Nepal measures poverty using the Cost of Basic Needs (CBN) approach which shows that anyone with an annual per capita expenditure of less than Rs 72,908 is listed in the poor category. A sharp inclination can be seen in the measurement of per capita income as it was just Rs 19,261 in Fiscal year 2009/10. However, with the increase in income coinciding with an enormous increase in expenses, people still have problems with their daily livelihood.
Talking about the current economic situation of the country Finance Minister Rameshwor Khanal said,
“Poverty alleviation remains one of Nepal’s most pressing social challenges and a priority for the federal, provincial and local governments.”
He added,
“Until now, many policies were designed on the basis of broad estimates. With this evidence-based approach, public investments can be better targeted, ensuring more efficient and effective use of limited resources.”
Moreover, the report highlights a prominent urban-rural divide. As per the reports 18.34 percent of population live below the poverty line in urban areas whereas it measures 24.66 percent in rural parts of Nepal. Sudurpaschim faces the highest poverty with 34.16 percent while Gandaki marks the least poor province with 11.88 percent.
Economic Inequality Creating Income Divide Driving Youths Abroad
Nepal is witnessing an alarming trend of people leaving the country in search of better lifestyle, opportunities, and studies. This mass emigration is an outcome of economic division, lack of opportunities, and political instability. Though the poverty rate has dropped, the gap between rich and poor groups of people has widened over the period of time.
Remittances are a crucial lifeline for poverty control and management in Nepal. It is a main driver for the substantial drop in Nepal’s poverty rates over the last two decades. Most importantly, remittance helps boost household income, funding essential basic needs like food, health and education but it aids in income inequality between receiving and non-receiving households.
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| Source: New Business Age |
As of the fiscal year 2024/25, inflow of remittance marks Rs 1.723 billion (approx. $12.9B) making it a major contributor to GDP. The inflow reached Rs 870.31 billion a 35.6% increase with monthly increase exceeding Rs 200 billion.
According to the current scenario, Nepal’s employment shows a low employment-to-population ratio of around 35-37%. 32.4% of the total population are employed, 62.9% are outside the labor force and 10-12% are unemployed.
Nepal is currently classified as Least Developed Country LDC but is expected to graduate to a developing country status by the end of November 2026. Though Nepal is still facing a lot of issues and economic fragilities like poverty and import dependence, smooth transition is expected in the upcoming years.
