Main
article: Economy
of Nepal
Nepal
is among the poorest and least developed countries
in the world with nearly half of its population living
below the poverty line (with, as of 2001,
a per
capita income of just over US$240).
Agriculture is the mainstay of the economy, providing
a livelihood for over 80% of the population and accounting
for 41% of GDP.
Industrial activity mainly involves the processing
of agricultural produce including jute,
sugarcane,
tobacco,
and grain.
Production of textiles and carpets has
expanded recently and accounted for about 80% of foreign
exchange earnings in the past three years. Most industrial
activity is focussed around the Kathmandu
valley and the Terai cities such as Biratnagar
and Birgunj. Agricultural production
is growing by about 5% on average as compared with
annual population growth of 2.3%.
Since
May 1991,
the government has been moving forward with economic
reforms, particularly those that encourage trade and
foreign investment, e.g., by reducing business licenses
and registration requirements in order to simplify
investment procedures. The government has also been
cutting expenditures by reducing subsidies, privatizing
state industries, and laying off civil servants. More
recently, however, political instability - five different
governments over the past few years — has hampered
Kathmandu's ability to forge consensus to implement
key economic reforms. Nepal has considerable scope
for accelerating economic growth by exploiting its
potential in hydropower
and tourism, areas of recent
foreign investment interest. Prospects for foreign
trade or investment in other sectors will remain poor,
however, because of the small size of the economy,
its technological backwardness, its remoteness, its
landlocked geographic location, and its susceptibility
to natural disaster. The international community's
role of funding more than 60% of Nepal's development
budget and more than 28% of total budgetary expenditures
will likely continue as a major ingredient of growth.
| Nepal's
Budget at a Glance |
Value
in '000 Rs
|
Heading |
2002/2003
Actual |
2003/2004
Rev. Estimate |
2004/2005
Estimate |
|
Revenue |
56229791 |
62227000 |
70320000 |
|
Tax
Revenue |
42586935 |
47978900
|
53770000 |
Existing Sources
|
42586935 |
47978900 |
50513640 |
Tariff Adjustment
& Administrative Reforms
|
-- |
-- |
3256360 |
|
Non-Tax Revenue |
12103197 |
12698100 |
14550000 |
Existing Sources
|
12103197 |
12698100 |
13751000 |
Tariff Adjustment
& Administrative Reforms
|
-- |
-- |
799000 |
Principal Refund
|
1539659
|
1550000
|
2000000 |
Total Expenditure
|
84006081
|
92107250
|
111689900
|
Recurrent
|
52090485 |
56720493 |
67608431 |
| Capital |
22356102 |
24469325
|
31577521 |
Principal Repayment
|
9559494 |
10917432 |
12503948 |
|
Surplus (+) Deficit (-)
before Foreign Grant |
-27776290 |
-29880250 |
-41369900 |
|
Foreign Grant |
11339146 |
11457500 |
15350730 |
|
Bilateral |
9387208 |
9506500 |
11724586 |
|
Multilateral |
1951938 |
1951000 |
3626144 |
Surplus(+) Deficit
(-) After Foreign Grant
|
-16437144 |
-18422750 |
-26019170 |
| Foreign Loan |
4546423 |
11111035 |
16959170 |
|
Bilateral |
657221 |
453500 |
767984 |
|
Multilateral |
3889202 |
10657535 |
16191186 |
Domestic Borrowings
|
8880000 |
7311715 |
9060000 |
|
Cash Balance Surplus (+) Deficit (-) |
-3010721 |
0 |
0 |
Compiled
by Research and Information Division of FNCCI from
Budget Speeches and Public Statement on Income and
Expenditure published by Ministry of Finance.
|
Economic
Ratios, 2004 |
