Causes of Poverty in Nepal

In many underdeveloped countries like Nepal, a large portion of the population lives below the poverty line. Economic and non-economic factors are responsible for the poverty in these countries, which are explained as follows:

(a) Economic Factors: 

The important economic factors of poverty are as follows:

1. High Population Growth Rate: In underdeveloped countries like Nepal, the population growth rate is high, but the economic growth rate is low. In such a situation, per capita income and per capita consumption tend to decrease. As a result, the population living below the poverty line increases.

2. Increasing Unemployment: Many countries like Nepal face a significant problem of unemployment. In a country like ours where agriculture is the main occupation, underemployment is an even greater problem. Underemployment refers to the situation where people do not get work throughout the year or get work only during the planting and harvesting seasons. Therefore, in agricultural-dominated countries like Nepal, a large number of people are unemployed or underemployed, leading to low income and the creation of widespread poverty.

3. Low Productivity in the Agricultural Sector: In underdeveloped or economically backward countries, a large number of people are engaged in agriculture. However, productivity in the agricultural sector is very low due to various reasons such as unskilled labor, traditional technology, lack of irrigation, subsistence farming practices, etc. Therefore, their production is not enough to feed them throughout the year. Thus, the majority of the population engaged in the agricultural sector is forced to live below the poverty line.

4. Inequality: Inequality is also an important cause of poverty. In many underdeveloped countries like Nepal, the distribution of income and wealth is extremely unequal. Therefore, the children of the rich remain rich, and the children of the poor remain poor, a situation that persists.

5. Low Rural Development: In many countries like Nepal, a large portion of the total population resides in rural areas. In the context of Nepal, more than 80% of the population resides in rural areas. However, infrastructure and development activities including education, health, industry, etc., have not developed in rural areas as required. This has resulted in a lack of employment and other income-generating opportunities in rural areas. Consequently, a large portion of the population residing in rural areas lives below the poverty line.

6. Low Industrial Sector Development: Many underdeveloped countries like Nepal show low development in the industrial sector. In other words, although the industrial sector in these countries started relatively early, its growth rate has been very slow. Due to the lack of other sectors that provide employment besides agriculture, a large number of people are unemployed or underemployed, forcing them to live in poverty. Therefore, slow industrial development is a significant causative factor of poverty.

7. Inflation: Inflation refers to the increase in the price level of goods and services. It is a causative factor of poverty. Inflation reduces the purchasing power of money. Therefore, the consumption of people in the low and middle classes decreases, and their standard of living declines. This leads them to fall below the poverty line. As a result, poverty increases.

8. Low Effectiveness in the Implementation of Development Plans: Many underdeveloped countries like Nepal have formulated numerous programs for poverty alleviation. However, the effective implementation of these programs has not been possible. Therefore, poverty has not decreased as expected in these countries. For example, the development plans of Nepal can be taken. Although poverty alleviation has been included as a major objective directly or indirectly in various plans since the fiscal year 2047/48 BS (1990/1991 AD), poverty has not decreased as targeted due to various reasons such as the inability to reach the targeted groups, the inability to select appropriate projects, the inability to prioritize expenditures, corruption, mismanagement, political instability, etc.

(b) Non-Economic Factors: 

Along with economic factors, there are also non-economic factors of poverty. Non-economic factors include social, political, religious, educational, health, etc. 

The prevailing social class discrimination in underdeveloped countries, such as gender discrimination, untouchability, and caste system, prevents people from rising above traditional thinking. This hinders the development of new ideas, behaviors, and thoughts. 

Consequently, economic progress and poverty alleviation are not possible. During times of political instability, corruption, mismanagement, etc., increase, leading to an increase in poverty. Religious superstitions, ignorance, and rigidity also hinder economic progress and poverty alleviation. 

Illiteracy, disease, etc., also play an important role in increasing poverty.

Measures for Poverty Reduction

In underdeveloped countries, a large portion of the population is trapped in poverty, leading a miserable and unfortunate life. 

Therefore, the main objective of economic development in these countries is poverty reduction. Since this is also a challenge, these countries have given importance to achieving high economic growth and development along with poverty reduction. 

For example, poverty reduction has been a major objective from Nepal's Eighth Plan to the current plan. 

Therefore, the following measures need to be adopted to reduce or alleviate poverty:

(a) High Economic Growth: Poverty reduction is not possible without high economic growth. Economic growth refers to the increase in the country's total production or national income. Economic growth can increase per capita income, which helps in poverty reduction. To achieve high economic growth, investment needs to be increased in productive sectors as well as in infrastructure such as transportation, education, health, technology, electricity, etc. This will also increase the overall production capacity of the country.

(b) Development of the Agricultural Sector: Development of the agricultural sector refers to modernizing and commercializing the agricultural sector to increase productivity. Since a large number of poor people are involved in the agricultural sector, poverty reduction is not possible without the development of the agricultural sector. Therefore, countries like Nepal with low levels of development need to develop the agricultural sector for poverty reduction. For this, programs to increase agricultural productivity such as the expansion of irrigation facilities, improved and scientific agricultural practices, commercialization and diversification of the agricultural sector, etc., are necessary.

(c) Creating Employment Opportunities: Unemployment and underemployment are also causative factors of poverty in underdeveloped countries. Therefore, poverty reduction is not possible without addressing these problems. Thus, the government needs to create employment opportunities in various sectors. To create employment opportunities, the development of the industrial sector, as well as providing easy credit to poor communities in rural areas to promote self-employment, needs to be emphasized.

(d) Targeted Programs for the Poor: Programs for poverty reduction should be designed by targeting poor families. Development plans and programs should be implemented in a way that benefits the poor, marginalized, and disadvantaged groups by involving them. Poverty reduction programs should be launched in places where a large number of poor people reside and where they lack employment opportunities. Similarly, it is necessary to target poverty reduction programs towards marginalized castes and ethnicities.

(e) Social Security: Social security is an important measure for poverty reduction. Arrangements should be made for allowances for those who cannot work, the disabled, the unemployed, single elderly women, children, and single women. In Nepal, the distribution of elderly allowances started in 2051 BS (1994 AD). Recently, allowances have also been provided to the disabled, single women, and marginalized communities as social security. However, in reality, this is very limited. If the government could provide such allowances in a sufficient manner, it would greatly help in poverty reduction.

(f) Equal Distribution of National Income: Equal distribution of national income also helps in reducing poverty. In Nepal, 21.6% of people live below the poverty line, and a large portion of the national income is used by a few people. This has led to a large number of poor people. Therefore, equal distribution of national income can help reduce poverty in underdeveloped countries like Nepal.

(g) Investment in Human Development: Investing in human development is essential for poverty reduction. Therefore, the state should invest in areas necessary for human development such as education, health, sanitation, nutrition, etc. This will increase the work capacity of the poor, which will help in increasing their income, which is useful for poverty reduction.

In addition to the above-mentioned measures for poverty reduction, other measures such as subsidies in food, development of technical manpower, increasing the participation and access of the poor, political stability, ending corruption and mismanagement, decentralized development, controlling population growth, etc., also need to be adopted.