Economy of Nepal- Planned and Mixed Economy with Its Status in HDI, World Development and Poverty

Economy of Nepal

Nepal is a developing nation with an agriculture-based economy. The nation has attempted to capitalize on the manufacturing and technology sectors in recent years where it has made significant strides. The most prevalent activity is farming, which is followed by manufacturing, trading, and tourism. Exports of goods, services, tourism, and remittances are the main sources of foreign currency income. Nepal's Gross Domestic Product (GDP) is $ 4.3 billion each year. Agriculture: Over 80% of Nepalese citizens work in agriculture, which accounts for more than 40% of the country's GDP. Wheat, millet, barley, and maize are further significant crops. Food grains and cash crops like sugarcane, oilseeds, tobacco, jute, and tea are also grown in greater amounts. Only a small portion of Nepal's GDP, less than 10%, is accounted for by manufacturing, which is still in the development stage. Leather goods, paper, cement, woolen carpets, clothing, and textiles are among the industries. Steel cookware, cigarettes, drinks, and sugar are a few of the several goods produced in Nepal. Trade and commerce vocations are among the traditional professions practiced by individuals in Nepal. Importing manufactured goods and exporting agricultural raw materials make up Nepal's foreign trade. In a single year, Nepal imports a variety of manufactured goods and petroleum products worth over $1 billion USD. Tourism was the main industry in the Kingdom's tourism sector in 1998, with 463,684 people visiting Nepal on one single day. It is because of the diverse array of sightseeing and adventure activities offered, as well as the rich cultural legacy and natural beauty of Nepal.

• Planned Economy
  • A planned economy is one in which the government controls the production and distribution of goods and services. In a planned economy, the government owns some or all production facilities, and it sets the standards for what should be produced and how much it will cost. However, in a market economy, there is little to no government intervention and production and distribution are based on market forces. A planned economy has the advantage of allowing for the setting of objectives, such as full employment. A planned economy, according to proponents of this kind of system, benefits everyone in society, not just a lucky few. There is no correlation between the types of things produced and what is needed in terms of disadvantages. Decisions about planned economies are made by bureaucrats in the government who are completely disconnected from the market. In order to further society's objectives, such a government may disregard individual liberties.
• Market Economy
  • In a market economy, individuals can own and control the total amount of resources, which are distributed through voluntary market exchanges guided by the interaction of supply and demand. People transact in the market on the basis of their willingness, exchanging resources like money for other resources as goods or services. The importance of each resource and the quantity of people who need it determine its trade value. When a resource's availability is limited and demand is strong, the price will be high and lead to inflation. Deflation takes place when supply exceeds demand and prices tend to be low. Different elements, such as the proportional risks and rewards (or profits) that particular economic activities are offered to the individuals, have an impact on economic growth and development in a market economy. Such activities won't be pursued if the dangers are too great and the returns are more likely to be little. Government meddling in market exchanges Regulation in a market economy is limited to market regulations that are upheld and implemented equally to all participants in the market. Additionally, the government is less involved in organizing or guiding economic expansion. In reality, there wouldn't be any taxes on economic activity if there were a "pure market economy," and similarly, there wouldn't be any government control of economic activity at all.

Nepal Status in HDI

The current Human Development Report (HDR) 2014 of Nepal has an increased Human Development Index (HDI) value. According to the HDR 2014, Nepal's HDI value increased from 0.540 to 0.463. Nepal's position in the HDR 2014 was 145th, up from 157th in 2013. The two ranks are not directly comparable, though. We can consider Nepal's HDI value to be good because it is the highest among countries with "Low Human Development". In South Asia, Pakistan (146), Afghanistan (169), and Nepal are ranked higher than them. The Gender Inequality Index now places Nepal higher. Nepal is now ranked 98th in the Gender Inequality Index, up from 102nd in 2013. According to the paper, Sustaining Human Progress aids in reducing vulnerability and building occupancy. Similar to how it offers a new perspective on how people become vulnerable, vulnerabilities also suggests strategies to increase resilience. No country from the region is listed in the very high development group in the HDI report. Sri Lanka is the only nation that is included in the High Human Development category and has the highest HDI ranking in South Asia, coming in at number 73. According to the research, nearly a billion individuals in Asia and the Pacific live below the poverty line and earn more than $1.25 but less than $2.50 per day. The report also stated that regardless of whether a disaster or crisis happened, persons who experience several deprivations run the danger of falling into poverty. The report also asked governments to commit to providing basic social services to everyone and to safeguarding society to increase its capacity to withstand the impact of poverty and other vulnerable groups. It demonstrates that Nepal does not need to wait till it is wealthy in order to provide effective social security or fundamental social services.

World Development Status of Nepal

Development revealed that there was an increase in the human population, which may be the result of immigration, high birthrates, or fewer deaths. This put pressure on Nepal's ability to sustain its natural resources and social infrastructure. There will be greater demands for food, energy, water, social services, infrastructure, and other resources as a result of population growth. This could have a detrimental influence on the area available for agricultural production. The government's commitment to preserving the services and goods may be impacted if there are fewer births than deaths or if people leave the country as a result of a decline in the population. The price paid by a consumer is the total gross value contributed by all domestic producers plus any applicable product taxes, less any subsidies not factored into the price of the goods. The estimate is done without taking into account natural resource deterioration or the depreciation of manufactured assets. GDP data are computed using current U.S. dollars. Using official exchange rates from the previous year, the GDP is converted from Nepali currency to dollars. The year a newborn child would be alive if current patterns of mortality rate had to continue throughout its life is shown by life expectancy at birth. The term "statistical capacity" describes a country's capacity to gather, analyze, and disseminate higher-quality data about its population and economy. With social monitoring and economic indicators, representation of politics and government resources, investment advice on private areas, and similarly informing the international donor community for program design, quality statistics are crucial for all methods of evidence for making decisions. Gross enrollment ratios demonstrate the required level of educational capacity, but a high ratio highlights the significant number of students who are enrolled in each grade because of repetition or late admission but are not part of a productive educational system. The system's coverage and internal efficiency are better and more precisely captured by the net enrolment rate because it excludes overage and underage pupils. The incidence of enrollments, such as overage and underage enrollments, is described by the difference between the ratio of gross enrollment and the net enrollment rate.

Poverty Status

Even though poverty has decreased in recent years, Nepal now ranks among the world's poorest nations. It is ranked 145th out of 187 nations in the 2014 Human Development Report by the United Nations Development Program, with a Human Development Index of 0.463. In Nepal, those living in poverty typically have big families, little to no land, or none at all. The illiteracy rate is very high. Additionally, they support particular ethnic, caste, and marginalized groups like women, persons from the lowest castes, and indigenous people. Women and men differ significantly when it comes to having access to health care, good nutrition, education, and decision-making opportunities. Women are much less educated than men, and infant mortality for girls is higher than for boys. The majority of rural women are forced to live in abject poverty with little access to resources to better their lives or those of their families. Women typically consume less food than men in a household, and the mothers' low calorie intake contributes to the infants' ongoing malnutrition. At the same time, the majority of women are the heads of homes and are responsible for supporting the rural economy. Women make up more than 60% of the labor force in agriculture, yet they have limited access to land, production technology, and education. Many of the most productive citizens in rural areas were harmed by violence and lack of economic opportunity, which caused them to migrate from Nepal in some previous years. In fact, Nepal is now the top beneficiary of remittances in the world, receiving almost US$5.1 billion from Nepalese expatriates in 2012. However, roughly 80% of remittance revenue goes toward everyday expenses, while 7% goes toward loan repayment. Only 3% of all remittances are used to create new capital. Because poor families cannot afford to send their children to school, the cycle of poverty is perpetuated by sending them to work. In Nepal, one-fourth of children are employed in wage or family labor.

References

Flippo, Edwin B. Personnel Management. London: Oxford Press, 1980.

Gynwal, Ram Prasad. Know Nepal. Kathmandu: Bhundipuran Prakashan, 2012.

Hamilton, Francis B. An Account of the Kingdom of Nepal. New Delhi: Manjushri Publishing House, 1971.

Heywood, Andrew. Politics. New York: Palgrave Macmillan, 2002.

heritage.org/index/country/nepal

slideshare.net/balaju/nepalese-economy-and-resources