Literacy
Very few studies on literacy at the national level have been carried out. Consequently census data are the main source of literacy in Nepal. In earlier censuses of Nepal, literacy is defined as the ability to read and write. In 1991 census the definition of literacy was changed and it included the ability to read and write with understanding and to perform simple arithmetic calculations (CBS, 1995). This same definition has also been followed in the 2001 census. The literacy rate has increased gradually over the last 45 years.

From a very low level of literacy in 1950s, Nepal has made a substantial progress in increasing literacy over the years. The census of 2001 has indicated that currently the literacy rate among the population of 6 years or older in Nepal is 54 percent with male literacy rate of 65 and female literacy rate of 43. Yet there is a lot to be done to reach a universal literacy target. For this HMG has already embarked on both the formal and non-formal education system in Nepal. Detailed data from the 2001 census on literacy and education is till not available, however earlier differentials indicated by the 1991 census are still valid. For example, there is a wide gap in literacy figures for rural and urban areas. Current gender gap in literacy rate is nearly 23 percentage points and data have indicated that the gap between male and female literacy is decreasing.

Formal Education
The schooling system in Nepal has been divided in four levels viz.; a) primary (grade I-V), b) lower secondary (VI-VIII), c) secondary (IX-X) and d) higher education.

Education in Nepal and primary education in particular has developed significantly since 1971 when the New Education Plan was introduced. In recent years the number of primary schools increased by nearly three fold between 1971 and 2001 (from 10,600 to 26,036). Between 1991 and 2001, on an average more than 900 new primary schools were added each year and the number of primary school teachers has reached nearly 100,000 in 2001.

The net enrollment rate for the primary level of education is 80.4 percent while the rate for boys and girls are respectively 86.0 and 74.8. The overall drop out rate in the primary level grade 5 is around 17.7 while for the boys and girls separately are 18.4 and 16.9 respectively (MOE 2002). These data suggest that there have been positive developments in the enrollment at primary level as well as decrease in dropout rates over the years.

The lower secondary level begins at grade 6 and is completed at grade 8. Most of the lower secondary schools are either integrated with the primary schools or with the secondary schools. The number of lower secondary schools increased by nearly three times between 1971 (2700) and 2001 (7289). On an average, nearly 400 new Lower secondary schools were added each year. In fact this growth in number of lower secondary schools is a big achievement.

The net enrollment rate in this level is 33 i.e. only a third of school going children for this level are attending school. Despite a large increase in number of schools, number of children enrolled in these schools is still low indicating a high drop out and low percent graduating to lower secondary schools. Like the primary level of education enrollment for girls is nearly 11 percentage point lower than that for boys (28% vs. 39%).

The secondary level of education in Nepal comprises grades 9 and 10. Like the expansion of primary and lower secondary level schools there has been a substantial increase at this level as well. For example, between 1971 and 2001, the number of secondary schools increased by more than four fold, from 918 to 4350. Between this period on an average more than 110 new secondary schools were added each year. Because of high drop out rates at earlier grades as well as lower promotion rates, currently the net enrollment rate is only 20 percent. The differentials in net enrollment rate at this level indicate that more boys are enrolled at this level compared to girls (24 vs. 16).

Higher secondary education, which comprises schooling at grades 11 and 12 is a new concept in Nepal's educational history. Approximately 65,000 students were enrolled at more than 500 higher secondary schools in 1999 (MOF, 2000). Although, access to tertiary i.e. after school education has also been expanding over the years only 0.64 percent of population was enrolled at these levels. Corresponding figure for women was only 0.23. Tertiary education is being provided through the umbrella of five universities, Tribhuvan University (TU), Mahendra Sanskrit University, Kathmandu University, Pokhara University and Purwanchal University. About 250 campuses are being run under these universities.

Non-formal Education
In order to increase the literacy (among adults) as well as entice children to formal schooling HMG has been implementing non-formal literacy/education programmes. These programmes can be divided in two categories, first, is for adults and elders and mainly attempts to increase literacy in this group. The second part is being implemented for school-age children. Non-formal education programmes for school age children focuses on out of school children between 8 and 14 years of age. The Basic and Primary Education Project is the main provider of this type of education. The adult literacy programme is much larger and under this scheme between 1992 and 2001, nearly 950 thousand people have acquired literacy.