Current 16th Periodic Plan of Nepal (2024/25 A.D- 2028/29 A.D) (2081/82 B.S - 2085/86 B.S)

Background

Nepal has a history of planned development starting from 1956, which includes the implementation of ten five-year plans and three three-year plans. The current plan, the Sixteenth Five-Year Plan (2081/82 - 2085/86), continues to address persistent issues such as poverty, economic disparity, and social exclusion. The overarching goal of this plan is to propel Nepal towards economic development, good governance, social justice, and prosperity, ultimately aiming for Nepal's graduation from a least developed country to a developing country.

Vision and Objectives of current 16th periodic plan of Nepal

The vision of the Sixteenth Plan is encapsulated in the slogan: "Good Governance, Social Justice, and Prosperity." The primary objective is to establish good governance across political, administrative, and judicial sectors. This involves eliminating structural barriers to development and ensuring social justice through structural transformation.

Strategies and Policies of current 16th periodic plan of Nepal

To achieve its vision and objectives, the plan outlines several strategies and policies:

1. Economic Base Strengthening: Focus on reinforcing the primary and secondary sectors while ensuring the stability of the service sector.
2. Financial System Development: Develop an accountable financial system, expand the scope of revenue, and stabilize external sectors.
3. Resource Utilization: Efficiently utilize financial resources, boost production, and create employment opportunities.
4. Supply Systems: Ensure reliable, timely, quality, and cost-effective supply systems to enhance production and productivity.
5. Human Resource Development: Produce and mobilize skilled and efficient workforce as per market demand, leveraging demographic dividends.
6. Economic Growth Targets: Aim for an economic growth rate of 7.3%, increase per capita income to $2351, reduce absolute poverty to 12%, and lower consumer inflation to 5% by the end of the plan period.
7. Human Development Index (HDI): Increase HDI from 0.601 to 0.650 and reduce the economic and environmental risk index from 29.7 to 24.

Quantitative Targets of current 16th periodic plan of Nepal

Source: NPC (Sixteenth Plan (2081/82 - 2085/86))

The Sixteenth Plan sets ambitious targets across various indicators, including:

• Economic Growth: Increase the annual average economic growth rate from 3.5% to 7.3%.
• Per Capita GDP: Raise from $1456 to $2351.
• Poverty Reduction: Reduce the population below the poverty line from 20.3% to 12%.
• Human Development Index: Improve from 0.601 to 0.650.
• Electricity Access: Ensure 100% population access to electricity, with per capita consumption increasing from 380 KW/hr to 700 KW/hr.
• Internet Access: Increase the population with internet access from 69.2% to 90%.
• Agricultural Productivity: Enhance productivity of major agricultural crops from 3.3 metric tons per hectare to 3.7 metric tons per hectare.
• Gini Coefficient: Improve from 0.24 to 0.22, indicating reduced income inequality.
• Gender Development Index: Increase from 0.885 to 0.967.

Long-Term Vision and Strategies of current 16th periodic plan of Nepal

The long-term vision "Prosperous Nepal, Happy Nepali" aims to establish a prosperous, independent, and socialism-oriented economy with happy, healthy, and educated citizens enjoying equality of opportunities and high standards of living. The main national objectives and goals are prosperity and happiness, supported by accessible infrastructure, high and sustainable production, equitable national income, a healthy and balanced environment, and comprehensive democracy.

To achieve these goals, the following long-term strategies have been identified:

Priority Areas of current 16th periodic plan of Nepal

To implement the long-term vision, priority areas include:

• High-quality transport systems and communication infrastructure.
• Quality human capital and entrepreneurial culture.
• Growth in hydroelectricity production and green economy promotion.
• Expansion of quality tourism services.
• Systematic urbanization and housing development.
• Strengthening provincial and local economies.

In conclusion, the Sixteenth Plan of Nepal aims to foster significant economic and social transformation through strategic policies, ambitious targets, and a commitment to good governance and social justice. With a clear vision and well-defined objectives, Nepal is set on a path towards sustainable development and prosperity.

Current 16th periodic plan of Nepal in Nepali

General Evaluation of Immediate Past Plan of Nepal (15th Periodic Plan)

Short Description of Past Development Plans of Nepal

First Periodic Plan of Nepal (1956-1961)

Sustainable Development Goals and Nepal

There are a total of 17 Sustainable Development Goals in the UN. The Sustainable Development Goals (SDGs) are 17 interconnected global goals. These are meant to make the future a better and more sustainable place for everyone. The UN General Assembly established the SDGs in 2015 AD to achieve them by 2030 AD. In this article, we will have a brief insight into some sustainable development goals and Nepal.

No poverty, and Nepal

The first of the Sustainable Development Goals (SDGs), which make up the 2030 Agenda for Sustainable Development, is to eliminate or nullify all forms of poverty. The SDG-1, "No Poverty," suggests the following goals:

• Eliminate extreme poverty for all people worldwide by 2030, which is currently defined as a person making less than $1.25 per day.
• Reduce the percentage of men, women, and children of all ages living in poverty in all manifestations by at least 50% by 2030, as determined by national definitions.
• Implement social protection systems and policies for all, including floors, at the national level, and by 2030, substantially all the poor and vulnerable will be covered.
• By 2030, make sure that all men and women, especially the weak and poor, have equal access to economic resources, ownership of land and other forms of property, inheritance, and natural resources, as well as to financial services, including microfinance.
• Develop the resilience of the underprivileged and those in vulnerable circumstances by 2030, and lower their exposure and susceptibility to extreme weather-related events and other economic, social, and environmental shocks and disasters.

Other goals in SDG-1 include: ensuring significant resource mobilization from a variety of sources, including through improved development cooperation, to give developing nations, especially least developed nations, adequate and predictable means to implement programs and policies to end poverty in all of its dimensions; and developing sound policy frameworks at the national, regional, and global levels.

Nepal's national defined poverty target for 2030 is less than 5%. Between 2015 and 2019, there has been remarkable progress in reducing poverty and increasing per capita income. Using an international standard for extreme poverty (US$ 1.25 per day), Nepal's national poverty rate was 21.6 percent in 2015 but dropped to 18.7 percent in 2019. Also, while Nepal's poverty rate was estimated to be 36% in 2015, it dropped to 15% in 2019.

The Multidimensional Poverty Index (MPI) (external link) is expected to fall below 6% by 2030. It was 44.2 percent in 2015 and 17.4 percent in 2022. Nepal plans to increase per capita income to $2,500 by 2030, up from $766 in 2015. It is expected to reach $1051 in 2019 and $1097 in 2020/21. To address poverty more quickly while maintaining average income growth, the consumption share of the bottom 20% of households is expected to rise from 7.6 percent in 2015 to 12 percent in 2030. In 2019, it increased to 12.05 percent. Similarly, social protection spending is expected to account for 15% of the federal budget by 2030. It was 11% in 2015 and had risen to 11.7 percent in 2019.

Zero hunger and Nepal

The following major targets are part of SDG: 02, "Zero Hunger," which aims to eradicate hunger, achieve food security, and improve nutrition:

• End hunger by 2030 and ensure that everyone has access to year-round, healthy food, with a focus on the poor and those in vulnerable situations, such as infants.
• End all forms of malnutrition by 2030, including reaching the goals for preventing stunting and wasting in children under five years old by 2025. Take care of the nutritional needs of older people, pregnant and lactating women, and adolescent girls.
• Double the agricultural productivity and incomes of small-scale food producers by the year 2030, with a focus on women, indigenous peoples, family farmers, pastoralists, and fishers. This will be accomplished by ensuring that all producers have equal access to land, other productive resources, knowledge, financial services, markets, and value-adding and non-farm employment opportunities.
• Implement resilient agricultural practices that boost productivity and production, support ecosystem preservation, bolster capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters, and gradually improve land and soil quality by 2030.
•  Maintain the genetic diversity of seeds, cultivated plants, domesticated animals, and their related wild species by 2020, including through well-managed, diverse seed and plant banks at the national, regional, and international levels. Additionally, promote access to and equitable sharing of benefits from using genetic resources and related traditional knowledge, per an international agreement.

In addition to the goals listed above, SDG-2 also has the following objectives: increase investment, including through improved international cooperation, in rural infrastructure, agricultural research and extension services, technology development, and plant and livestock gene banks to increase agricultural productivity capacity in developing countries, particularly least developed countries; correct and prevent trade restrictions and distortions in global agriculture.

Nepal has a score of 46 on the Global Food Security Index. The Global Hunger Index gives Nepal a score of 19.1 (external link), which is still high. The prevalence of stunting and underweight in children has decreased significantly, even though undernourishment decreased from 36.1 percent of the population in 2015 to 8.7 percent in 2019.

Over time, child malnutrition has decreased, but not quickly enough. In Nepal, the percentage of underweight children (aged 6-59 months) was 30.1% in 2015, fell to 27% in 2016, and has since fallen to 24.3% in 2019. By 2030, Nepal wants to bring this down to 9 percent. Similarly, the prevalence of stunting among children under five dropped from 36% in 2015 to 31.6 % in 2019. Underweight children tend to be born to mothers who lack education or come from lower-income families, and they are more prevalent in rural areas.

Government spending on agriculture accounted for 2.21 percent of the budget in 2017–18 and will rise to 2.8 percent in 2020–21. The target was to produce 376 kg of food grains per person in 2019–20. Though it accounts for 33 percent of all irrigated land, year-round irrigated land has not made much progress.

Quality Education and Nepal

The targets for SDG:4, or quality education, are as follows:

• Make sure that by 2030, both girls and boys have received a free, equitable, and high-quality primary and secondary education that produces useful and efficient learning outcomes.
•  By 2030, ensure that every boy and girl has access to high-quality pre-primary education so they are prepared for primary education.
•  By 2030 all men and women will have equal access to affordable and high-quality technical, vocational, and tertiary education, including higher education.
•  Increase youth and adult populations who possess the necessary skills—including technical and vocational ones—for employment, respectable jobs, and entrepreneurship—by a significant margin by 2030.
•  Eliminate gender disparities in education by 2030, and guarantee that all disadvantaged groups, including people with disabilities, indigenous peoples, and children in precarious situations, have equal access to all education and vocational training levels.
•  By 2030, most men and women and all young people will have mastered literacy and numeracy.
•  By 2030, make sure that all students have the knowledge and abilities necessary to advance sustainable development, including, but not limited to, education for sustainable development and sustainable lifestyles, human rights, gender equality, the promotion of a culture of peace and non-violence, global citizenship, and an understanding of cultural diversity and its role in sustainable development.

Besides the targets mentioned above, the other targets included in SDG-4 are to build and upgrade education facilities that are child, disability, and gender sensitive and provide safe, non-violent, inclusive, and effective learning environments for all; by 2020, substantially expand globally the number of scholarships available to developing countries, in particular, least developed countries, small island developing States and African countries, for enrolment in higher education, including vocational training and information and communications technology, technical, engineering and scientific programs, in developed countries and other developing countries; and by 2030, substantially increase the supply of qualified teachers, including through international cooperation for teacher training in developing countries, including through international cooperation for teacher training in developing States.

Nepal has pledged to fulfill its people's right to an education. It has made significant efforts to ensure that all people, including the poor and disadvantaged, have access to educational services. As a result, the Net Enrollment Rate (NER) in primary education reached 97.2 percent in 2019, just shy of the goal of 99.5 percent by 2030. The proportion of students who complete grade eight is 79.3 percent, while the total number of students enrolled in secondary school is 71.4 percent.

Similarly, the population aged 15-24 had an 88.6 percent literacy rate in 2015, which increased to 92 percent in 2019. As a result, it is close to meeting its target date of 2030. However, only 31% of the working-age population received vocational and technical training, whereas the target was 38%. The increase in Internet users is encouraging, with 58 percent of adults using the Internet in 2019.

In 2019, the Gender Parity Index (GPI) (external link) in primary school enrollment was 1.06, compared to the target of 1.01. In primary schools, girls outnumbered boys. However, the GPI for the secondary level in 2019 was only 0.95. This demonstrates that gender parity has improved. The government recently approved the National Framework for SDG 4 - Education 2030. Some provincial and local governments have also begun to develop educational plans and programs.

Decent work, Economic growth, and Nepal

The SDG 8 Goal of decent work and economic growth includes the following targets:

• Maintain per capita economic growth under national circumstances, with the least developed countries achieving at least 7% annual GDP growth.
• Increase economic productivity through diversification, technological advancement, and innovation, focusing on high-value-added and labor-intensive sectors.
• Encourage the formalization and growth of micro, small, and medium-sized enterprises, including access to financial services, through development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation.
• Improve global resource efficiency in consumption and production gradually through 2030, and strive to decouple economic growth from environmental degradation, under the 10-year framework of sustainable consumption and production programs, with developed countries leading the way.
• Achieve full and productive employment and decent work for all women and men, including young people and people with disabilities, by 2030, as well as equal pay for equal work.
• Reduce the proportion of youth not in employment, education, or training by 2020.
• Take immediate and effective steps to eliminate forced labor, modern slavery, and human trafficking, as well as the prohibition and elimination of the most heinous forms of child labor, such as recruitment and use of child soldiers, and end child labor in all its forms by 2025.
• Protect workers' rights and promote safe and secure working conditions for all employees, including migrant workers, particularly women migrants and those in precarious employment.
• Create and implement policies to promote sustainable tourism that creates jobs while promoting local culture and products by 2030.
• Increase domestic financial institutions' capacity to encourage and expand access to banking, insurance, and financial services for all.

Other targets included in SDG-8 are to increase Aid for Trade support for developing countries, particularly least-developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries, and to develop and operationalize a global strategy for youth employment and to implement the International Labour Organization's Global Jobs Pact by 2020.

The per capita GDP growth rate increased from 2.3 percent in 2015 to 5.6 percent in 2019. However, due to COVID-19, the growth rate in 2019/20 was limited to 2.3 percent. One of the SDG-2 targets is to achieve full and productive employment and decent work for all women and men. Nepal's unemployment rate (15-59 years) was 27.8 percent in 2015, dropping to 19.6 percent in 2019.

The goal also includes making financial services available to everyone. 81.2 percent of the population had access to financial services within a 30-minute walk, and the population per financial institution was 3363. The population with access to cooperatives within 30 minutes of walking distance was 60%, compared to the target of 60.9 percent by 2019. The Nepalese labor market is mostly informal, with 59.2 percent of informal employment in the non-agriculture sector. Because more than half of the population works in the informal sector and is not covered by social security, the government is working to include this population in the social security scheme.

Employing the population that is now returning from various destinations as a result of COVID-19 will be a major challenge for the government. As a result, it is committed to putting a special emphasis on agriculture and the promotion of small and medium-sized enterprises, individual entrepreneurship, and skill development to create job opportunities for both returning and unemployed people.

The negative impact of COVID-19 on the tourism (external link) industry has impacted many people in Nepal. It is critical to reduce poverty and promote prosperity in the country by ensuring rapid, inclusive, and sustainable economic growth by developing agriculture, industries, and services sectors. As a result, the government has prioritized increasing productive capacity across sectors, developing technical skills and entrepreneurship, ensuring access to credit for small and medium-sized enterprises, encouraging the establishment of export promotion zones (EPZs) and special economic zones (SEZs), and facilitating enterprise export capacity.

Introduction to Globalization:

Globalization is the process that allows goods produced in one country or workers from one country to enter any country in the world without any restrictions. In other words, globalization is essentially the integration of a national economy with the global market.

In today's era, the entire world has become one. All countries in the world are interconnected from economic, political, social, cultural, technological, etc., perspectives.

People from one country go to another country for employment, business, etc. Goods produced in one country are sold in another country without any restrictions.

The main factors contributing to the rapid globalization in today's era are technological advancements, economic liberalization, development in the transportation sector, progress in the communication sector, the World Bank, the World Trade Organization, the International Monetary Fund, regional economic organizations, etc.

Nepal entered globalization with the start of privatization and liberalization from the decade of 2050 BS (1990s). However, Nepal has not been able to take full advantage of it. Nepal needs to increase its competitive capacity to take full advantage of it.

Positive Aspects of Globalization:

Globalization has many positive aspects. The main positive aspects are as follows:

1. Market Expansion: Globalization has made international markets accessible, significantly expanding the market for goods and services. Goods produced in the country can be exported to international markets, earning large amounts of foreign currency. This can increase production, employment, and income in the country, raising the living standards of the people.
2. Foreign Employment and Remittance Income: Globalization has played a significant role in solving the problem of unemployment in underdeveloped countries like Nepal. As of now, more than four million youths from Nepal have found foreign employment. This has resulted in a large inflow of remittance income. Currently, the remittance income received by Nepal is about 28% of the total gross domestic product.
3. Poverty Reduction: Globalization has played a significant role in reducing poverty in many underdeveloped countries like Nepal. In Nepal, in the fiscal year 2051/52 BS (1994/1995 AD), 42% of the population was below the poverty line. By the fiscal year 2082/83 BS (2025/2026 AD), the population below the poverty line had decreased to 21.6%. The main reason for this is that after globalization, Nepal gained access to foreign employment opportunities, and the resulting remittance income was distributed in Nepal.
4. Acquisition of Technology: Underdeveloped countries like Nepal, which were far behind in terms of technological development, have acquired new and high-level technology due to globalization. For example, mobile phones, computers, transportation equipment, etc., are imported from other countries. If globalization had not occurred, it would not have been possible to use these goods.
5. Benefit to International Consumers: Globalization has increased competition among international producers. They are forced to produce high-quality goods at low cost. This has benefited consumers in the international market, who have access to quality goods at reasonable prices.

Negative Aspects of Globalization:

Globalization has not only positive aspects or benefits but also negative aspects or disadvantages. These are as follows:

1. Adverse Impact on Underdeveloped Countries: Underdeveloped countries like Nepal are behind in terms of technology, skills, knowledge, etc. The industries in these countries cannot compete with the industries in developed countries and other industrialized countries. Therefore, the industries in underdeveloped countries, unable to compete, face the possibility of closure. This can lead to the loss of domestic employment.
2. Brain Drain: Brain drain refers to the migration of educated, skilled, and trained citizens of a country to another country in search of better opportunities. Due to globalization, there is a rapid trend of educated, skilled, trained, and capable human resources from underdeveloped countries seeking better opportunities in developed countries like the United States of America, Canada, Australia, Britain, etc. This is a significant loss for the nation.
3. Environmental Degradation: Globalization has led to market expansion, significantly increasing the demand for goods. To meet this expanded demand, large-scale production of goods leads to emissions of smoke, dust, toxic substances, etc., causing environmental degradation.
4. Decrease in Savings and Investment: Due to globalization, cheap and luxurious goods have been imported into poor countries like Nepal. This has led to a decrease in national savings. When national savings decrease, national investment also decreases. The lack of investment can trap poor countries in poverty. Therefore, a situation has been created where poor countries remain poor.
5. Economic Dependence: Due to globalization, no country is forced to produce all goods themselves. Every country produces only those goods that are profitable or can be produced cheaper than others, while importing other goods. This has increased economic dependence among countries worldwide.

Introduction to Economic Liberalization:

Economic liberalization is the process of freeing a country's economy from government control or intervention and encouraging the private sector to participate in economic activities.

In other words, liberalization is the economic policy of giving the authority to decide things like what to produce, how much to price, where to sell, what quality of goods to produce, etc., to the individual or enterprise that is actually producing.

In such an economic policy, the government does not unnecessarily interfere with the private sector. Therefore, entrepreneurs can work independently. This leads to the proper circulation and use of resources, and consumers can obtain good quality goods at reasonable prices.

Economic liberalization started in Nepal from the fiscal year 2048/49 BS (1991/1992 AD). After economic liberalization, private banks, private universities, private hospitals, etc., have come into operation in Nepal. Simultaneously, after adopting the liberalization policy, the Government of Nepal started the process of privatizing public enterprises. 

As of now, 30 public enterprises have been privatized in Nepal.

Positive Aspects of Economic Liberalization: 

Economic liberalization has many positive aspects. These are as follows:

1. High Economic Growth: Economic liberalization encourages the private sector, leading to increased investment. It also attracts direct foreign investment. Increased investment leads to increased national production, resulting in a higher economic growth rate for the country. For example, Nepal achieved a high economic growth rate due to the economic liberalization implemented by the Government of Nepal in 2050 BS (1993 AD). However, later, internal conflict and political instability caused Nepal's economic growth rate to decline.
2. Industrial Development: Under economic liberalization, as the private sector can invest independently, and it also helps attract foreign investment, it contributes to the industrial development of the country.
3. Increase in Employment: Economic liberalization leads to increased investment and rapid industrialization, creating new employment opportunities. This helps in solving the problem of unemployment in the country.
4. Benefit to Consumers: In economic liberalization, competition among producers leads to the production of quality goods at lower prices. Consumers also have the freedom to consume goods according to their preferences. Therefore, economic liberalization benefits consumers.
5. Reduction of Trade Deficit: Economic liberalization plays a significant role in increasing foreign trade. In economic liberalization, there are no restrictions on imports and exports. Therefore, as domestic industries produce goods based on comparative advantage, exports increase, and the country's trade deficit decreases.

Negative Aspects of Economic Liberalization: 

Although economic liberalization has many positive aspects, it also has some negative aspects or disadvantages. 

These are as follows:

1. End of Traditional Technology, Skills, and Knowledge: Economic liberalization creates fierce competition among producers, forcing them to produce quality goods at lower prices using modern technology, skills, and knowledge. This leads to the end of traditional technology, skills, and knowledge.
2. Unhealthy Competition: In economic liberalization, any entrepreneur or producer has to produce quality goods at low cost to survive. This can lead to unhealthy competition among entrepreneurs or producers.
3. Increase in Unemployment: In economic liberalization, modern technology has to be used to compete. This displaces labor, leading to an increase in unemployment in the country.
4. Pollution and Other Environmental Problems: Due to economic liberalization, large industries from wealthy or developed countries are established in underdeveloped countries in search of cheap labor. The smoke, dust, toxic substances, noise, etc., emitted from these large industries cause pollution as well as other environmental problems.
5. Increase in Economic Inequality: Economic liberalization has increased economic inequality. Currently, in the world, the rich are becoming richer, and the poor are becoming poorer. Economic liberalization is one of the reasons for this.

Introduction to Privatization

Privatization is the process of transferring ownership of assets, industries, businesses, etc., that are under government ownership to the ownership of the private sector. 

In other words, privatization is the transfer of ownership of industries, businesses, or government organizations that are under government ownership to the private sector, either partially or fully, or involving the private sector in the management of such organizations. 

Its main objective is to reduce the role of the government and to make the private sector strong and involve it in productive businesses.

Industries established by the government are called public enterprises. In Nepal, before 2007 BS (1950 AD), only two public enterprises were established: Nepal Bank Limited and Raghupati Jute Mills. After the implementation of the First Five-Year Plan in 2013 BS (1956 AD), the establishment and development of public enterprises gained momentum. 

By the end of the Seventh Five-Year Plan (2042-2047 BS, 1985-1990 AD), 65 public enterprises had been established.

Some of the major public enterprises included Bhrikuti Paper Mills, Bansbari Leather and Shoe Factory, Nepal Telecommunications Corporation, Nepal Oil Corporation, Birgunj Sugar Factory, Lumbini Sugar Factory, Nepal Transport Corporation, etc. However, after the political change of 2046 BS (1990 AD), the then government formulated a policy to privatize public enterprises. As of now, 30 public enterprises have been privatized in Nepal.

Positive Aspects of Privatization: 

Privatization is an important economic policy. It plays a significant role in the expansion and development of the economy by making optimal and maximum use of the available resources and means in the country.

The main positive aspects or benefits or importance of privatization can be mentioned as follows:

1. Increase in Competition: Public enterprises receive government subsidies and operate under a monopoly. Therefore, they lack competitive capacity. However, after privatization, such industries or businesses have to compete with other industries or businesses. This forces them to increase production capacity by adopting modern technology and effective management. Consequently, competitive capacity increases, leading to the production of better and cheaper goods.
2. Reduction in Government Intervention: Public enterprises are under the control of the government. Therefore, there is unnecessary government intervention in their operation. Due to government intervention, their work efficiency is negatively affected. Thus, privatization is very important to eliminate unnecessary government intervention.
3. Increase in Revenue: After the sale of loss-making industries under government ownership to the private sector, the government levies various types of taxes on the income and profits earned by them. This increases government income or revenue.
4. Creation of Employment Opportunities: After privatization, as government intervention ends, industries and businesses are operated efficiently. Simultaneously, with the expansion of these industries, the number of other related industries also increases. This creates new employment opportunities.
5. Increase in Consumer Satisfaction: Public enterprises often neglect consumer demand, preferences, taste, choice, etc. However, private industries and businesses produce goods and services according to consumer demand, preferences, taste, choice, etc., which increases consumer satisfaction.

Negative Aspects of Privatization:

The negative aspects or disadvantages of privatization are as follows:

1. Neglect of Public Welfare: The main objective of the private sector is to maximize profit. Therefore, it only produces goods and services that generate high profits. It does not pay attention to the production of essential goods and services for the public, such as education, health, public transport, drinking water, electricity, etc., which have lower profit margins.
2. Unemployment: The private sector always aims to minimize costs and maximize profits. For this, it uses modern technology, which can displace workers and create unemployment.
3. Labor Exploitation: The private sector often pays low salaries or wages to workers and makes them work for longer hours. Thus, there is extensive exploitation of labor in privatization.
4. Increase in Economic Inequality: When industries or national assets under government ownership are privatized, only a few wealthy individuals can afford to buy them. They become owners, while people from poor communities become workers. The income of the owner class increases, making them even wealthier than before, while the working class remains poor, leading to an increase in economic inequality in the country.
5. Neglect of Backward Areas: Since the main objective of the private sector is to maximize profit, it does not want to do business in backward areas where there is less infrastructure and market potential. This hinders the development of backward areas.
6. Misuse of Resources: Instead of producing essential goods, the private sector prioritizes the production of fashionable, luxurious, and convenient goods and services with the aim of maximizing profit. This neglects the needs and interests of the majority of the population and the nation. Therefore, in privatization, resources are misused by producing unnecessary goods and services rather than essential ones.

Meaning of Economic Inequality

In our society, some people are rich, while many are poor. The rich have many income-generating assets such as houses, land, industries, businesses, etc. On the other hand, the poor have no income-generating assets, or if they do, they are very few. 

In other words, the distribution of income and wealth among the citizens of the country is unequal. Some people are rich, but many are poor. 

This unequal distribution of income and wealth among the citizens of a country is called economic inequality. Economic inequality is a problem in almost all countries in the world.

In countries with economic inequality, a few individuals, who are very wealthy or in a small number, receive a large portion of the national income, while the majority of the poor, who are in large numbers, receive only a small portion of the national income. 

The unequal distribution of national income or economic inequality creates social conflict, revolution, political instability, unemployment, poverty, etc. 

Therefore, it is considered undesirable and unjust from a political, economic, and social perspective.

Causes of Economic Inequality

There are various causes of economic inequality. These causes are influenced by the economic, social, political, cultural, religious, etc., aspects of a country.

The main causes of economic inequality can be mentioned as follows:

(a) Inheritance of Property: In Nepal, since sons inherit the property of their fathers, the sons of rich fathers become rich, and the sons of poor fathers remain poor. Thus, the economic inequality of the past continues to be maintained in the present and the future.

(b) Unemployment: Nepal faces a significant problem of unemployment and disguised unemployment. Unemployed individuals cannot earn income. Therefore, unemployed people remain poor, while employed people earn income, leading to an improved economic situation. Thus, unemployment is also a causative factor of economic inequality.

(c) High Population Growth: High population growth is also a cause of economic inequality. Poor people tend to have more children, resulting in larger families. When their family splits, the little property they have is also divided, becoming even smaller. On the other hand, rich people have fewer children, so they do not face this problem. Consequently, economic inequality is created in the country.

(d) Unequal Distribution of Wealth: In less developed and agricultural-dominated countries like Nepal, the main sources of income are land, livestock, houses, etc. These sources of income are mostly owned by a few people, while many people own very little. The rich earn a lot of income from these sources, while the poor earn little income. Therefore, the unequal distribution of wealth creates economic inequality.

(e) Differences in Inherent Abilities: People have different inherent abilities. Even brothers and sisters born to the same parents and having received the same education are found to have different abilities. Individuals who are inherently talented earn more wealth and income, while individuals who are inherently weak earn less wealth and income. Thus, differences in inherent abilities create economic inequality.

(f) Inequality in Education, Training, and Opportunities: Not all people can get equal opportunities. People who have received good education, training, and opportunities earn higher salaries or income, while people who have not received good education, training, and opportunities earn lower salaries or income. Thus, inequality in education, training, and opportunities creates economic inequality.

Measurement of Economic Inequality

There are various methods to measure economic inequality. Among these various methods, the Gini coefficient is the most popular method. 

It measures the level of inequality in the distribution of income and wealth using a statistical method. Its value ranges from 0 to 1. A value of 0 indicates perfect equality, while a value of 1 indicates perfect inequality. 

If the Gini coefficient is close to 0, it means that economic inequality is low. Conversely, if the Gini coefficient is close to 1, it indicates that economic inequality is high.

Measures to Reduce Inequality

Many countries around the world, including Nepal, face a significant problem of economic inequality. Therefore, it is essential to reduce inequality. 

The following measures should be adopted to reduce inequality in Nepal:

(a) Economic inequality can be reduced by implementing a progressive tax system. In a progressive tax system, the tax rate is higher for individuals with higher incomes and lower for individuals with lower incomes. 

(b) Economic inequality can be reduced by providing employment to the unemployed population. 

(c) Economic inequality can be reduced by controlling high population growth, which is a significant cause of economic inequality. 

(d) Economic inequality can be reduced by increasing the salaries and wages of workers in both the formal and informal sectors in Nepal. 

(e) Economic inequality can be reduced by providing free education, skill development, and training opportunities to low-income families. 

(f) Economic inequality can be reduced by providing allowances and pensions to the disabled, sick, single women, elderly, etc. 

(g) Inheritance of property is also a causative factor of economic inequality. Therefore, the legal right of sons to inherit ancestral property should be abolished, and there should be a legal provision allowing parents to distribute property according to their wishes. This will help reduce economic inequality.

Problems of Foreign Employment and Measures for Solutions

(a) Problems of Foreign Employment: 

Most Nepalese workers going for foreign employment are unskilled. They also lack information about foreign languages, laws, regulations, and the skills and knowledge required for the work they will be doing. Therefore, they have to face many problems in the process of foreign employment. 

The main problems of foreign employment are as follows:

1. Unskilled Laborers: Most Nepalese going for foreign employment are unskilled. Therefore, they receive lower salaries compared to workers from other countries.
2. Risky Work: Most Nepalese going for foreign employment are unskilled, so they have to do difficult and risky jobs. This leads to deaths, injuries, and disabilities in the workplaces. However, there is a lack of related records.
3. Lack of Protection: Nepalese going to work in countries where Nepal does not have an embassy are not protected or monitored. Even in countries where Nepal has an embassy, the embassy staff often do not pay attention, leaving the workers helpless when they face problems.
4. Use of Illegal Routes: Many Nepalese are found to go to conflict-ridden countries like Afghanistan, Iraq, etc., using illegal routes through India. Those who go for foreign employment using illegal routes face the most problems. There are also complaints of physical exploitation and forced prostitution of women going for foreign employment using illegal routes.
5. Expensive: Foreign employment has become very expensive due to various reasons such as having to stay in Kathmandu for a long time while waiting to go, and recruitment agencies charging high fees.

(b) Measures for Solutions for Foreign Employment: 

The following suggestions can be given to solve the problems of foreign employment mentioned above:

(a) Youths wishing to go for foreign employment should be encouraged to go only after acquiring skill development or training. This will enable them to find easier jobs and also receive higher salaries. 

(b) If a mandatory insurance law is enacted for those going for foreign employment, it will provide some financial relief to their families even if they die or become disabled in an accident. 

(c) Embassies should be opened in the countries where Nepalese go to work, and arrangements should be made for labor agreements. This will help in protecting Nepalese who have gone for foreign employment and in developing and expanding the labor market. 

(d) Since many problems arise when many Nepalese go to conflict-ridden countries and countries not approved for foreign employment using illegal routes through India, this should be completely discouraged. Cooperation with India and other South Asian countries is necessary for this. 

(e) Arrangements should be made to complete all processes through local administration to end the situation of having to stay in Kathmandu for foreign employment. 

(f) Foreign employment agencies should be encouraged to establish themselves at the local level. This can significantly reduce the cost of going for foreign employment.

Concept of Foreign Employment

Foreign employment refers to the situation where citizens of one country go to work in another country for the purpose of earning income. In the present context, many young people from underdeveloped countries like Nepal are forced to migrate abroad due to the lack of domestic employment. 

According to the decision of the Government of Nepal, 110 countries have been opened for foreign employment so far. The main destination countries among them are Malaysia, Saudi Arabia, UAE, Kuwait, South Korea, etc. 

By the end of the fiscal year 2082/83 BS (2025/2026 AD), the number of Nepalese who have gone abroad for employment has reached around 4.5 million. This trend has not stopped and is increasing day by day.

The money sent by citizens of one country working in another country to their own country is called remittance. As the number of Nepalese citizens going for foreign employment has increased, remittances have also increased rapidly. 

In the fiscal year 2081/82 BS (2024/2025 AD), Nepal received approximately 917 billion rupees in remittances, which was about 28% of the total gross domestic product.

Importance of Foreign Employment

Foreign employment and the remittances received from it have significant importance for less developed or underdeveloped countries like Nepal. Since Nepal's economy is based on remittances, it is also called a remittance economy. 

The importance of foreign employment for underdeveloped countries like Nepal can be mentioned as follows:

(a) Solution to Unemployment Problem: Nepal faces a serious problem of unemployment. A large portion of the population is trapped in underemployment and disguised unemployment. Foreign employment has played a significant role in solving this type of unemployment problem.

(b) Remittance Income: Remittance income is received from foreign employment. As the number of Nepalese going for foreign employment has increased, remittance income has also been increasing. The importance of this remittance income is increasing day by day because it is the main source of foreign currency. A large trade deficit of Nepal is being filled by its help.

(c) Poverty Reduction: Income received from foreign employment is distributed in the households of the concerned workers. This increases the family income and also increases consumption. This leads to improvement in the standard of living, which helps in reducing poverty. Remittance is the main causative factor of the recent reduction in poverty in Nepal.

(d) Skilled and Trained Human Resources: People who go for foreign employment become familiar with high and new technologies. They also gain experience while working. After returning to their home country, they can use the skills, knowledge, and experience learned abroad.

(e) Increase in National Income: Remittances received from foreign employment play a significant role in increasing national income. This leads to capital formation, which helps in increasing production, and consequently, national income also increases.

Disadvantages of Foreign Employment

Despite the significant importance of foreign employment in Nepal, it also has disadvantages. 

The disadvantages of foreign employment can be mentioned as follows:

(a) Increase in Dependency: Although foreign employment is beneficial in the short term, it is very harmful in the long term. It increases dependency. Instead of developing the feeling among people to do something in their own country, it increases the habit of working abroad and using foreign goods.

(b) Brain Drain: Due to foreign employment, skilled, trained, educated, and healthy human resources in the country migrate abroad for attractive salaries. This creates a shortage of skilled human resources within the country. Nepal is currently facing this problem.

(c) Difficulty in Economic Development: When the country's skilled and capable human resources are attracted to foreign employment, there is a shortage of human resources needed in the country. This creates a significant difficulty in the country's economic development.

(d) Family Problems: Families of individuals who have been in foreign employment for a long time often face many problems. Misuse of income earned from foreign employment, children going astray, children dropping out of school due to the absence of parents, etc., are some of the problems that have arisen. Similarly, many cases of strained relationships and divorces between husbands and wives are found.

(e) Human Cost: The income or remittances received from foreign employment come at a high human cost or sacrifice. Living away from family, doing difficult and risky work in other countries, etc., are some of the costs of remittances received from foreign employment. Additionally, many Nepalese have lost their lives in foreign lands during the process of foreign employment.