The ownership of assets by households is strongly associated with the level of income and consumption. The holding of assets are the measuring rod of the well being of people. The higher the possession of assets the higher is the access to credit and better is the well being of the people. The more skewed the distribution of assets is implies the more vulnerable the livelihood of the majority of the people is. The current pattern of assets holding in Nepal is unequal. It means the richer have more assets than the poor because of the skewed distribution of income, consumption and opportunities. There are various components of assets: land and monetary value of property (livestock, jewelry and other goods which can be traded in the market), cash and fixed deposit, shares and employee provident fund etc. This article attempts to compare the distribution of assets and associated inequality based on the results of Nepal Living Standard Survey (NLSS) of 1995/96 and 2003/04. The poor have limited share of assets. It was 1.2 % and 1.0 % in 1995/96 and 2003/04 respectively. While the share of per capita assets of the rich were 80.3 % in 1995/96 which increased to 82.6 % in 2003/04. It indicates that the share of assets is more skewed over the years. The rich have above 80% share of assets in both the period under consideration while the rest of the groups have only 20% share of assets. This indicates that holding of assets by the poor is nominal. The variation in the distribution of per capita assets is extremely large. The growth rate of per capita assets distribution for the poor is 14.5% while it was 16.4% for the rich with a marginal variation from its mean. The variation in the distribution of per capita assets is extremely large. The affluent had 69.4 and 79.6 times more per capita assets than the poor in 1995/96 and 2003/04 respectively. The variation in land distribution is not large. The share of average land for poor was 17.6% and 15.6% in 1995/96 and 2003/04 respectively with annual average growth rate of 11.6%. While the same for the rich was 19.0% and 19.4% in 1995/96 and 2003/04 respectively with annual average growth rate of 13.6%. The affluent have 1.1 and 1.2 times more average land than the poor in 1995/96 and 2003/04 respectively Inequality is rising in the distribution of per capita assets and average land. The Gini coefficient (GC) is a popular method of the measurement of inequality. Its value lies between 0 and 1 in which 1 indicates perfect inequality. Sources of inequality today are more complex and rooted in history and the political and institutional structures of society. Moreover, the extent of inequality in society depends on the distribution of political power. The GC was 0.96 and 0.93 in 1995/96 and 2003/04 respectively showing the perfect /extreme inequality in the distribution of per capita assets. However, the result shows that there is marginal improvement in the inequality of the distribution of per capita assets in 2003/04 with an annualized growth rate of (-) 0.4 % during the period 1995/96-2003/04. There is an improvement in the distribution of land. The inequality in the distribution of average land is being decreased by an average annualized growth rate of 2.7%. The value of GC has decreased to 0.50 in 2003/04 from 0.62 in 1995/96. Nepal achieved a remarkable progress in reducing the number of poor amidst the political instability and conflict during 1995/96-2003/04. However, the distribution of assets among the different group of people is highly skewed as evidenced by the rising inequality. As discussed above, of the per capita share of assets over 80% was attributed to the rich with the annualized growth rate of 16.4% during the same period of time. Similarly, the value of GC high is above 0.90 in both the period showing extreme inequality in the distribution of per capita assets. Thus, the inequality in the distribution of per capita asset is high in both the period under consideration. The inequality in the distribution of average land is improving over the years albeit the inequality is still high. It reveals that the current pattern of assets holding is unequal. The main reason for this has been apportioned to the high inequality in the distribution of income and consumption. This is because the initiatives after 1990 have not been under taken by government and, if any, they were not effective to significant equalization of asset holding. Moreover, market forces and policy induced distortions have tended to work. The progress achieved so far in reducing poverty will not be sustained for long unless the nation pays attention to improve the distribution of assets equally for each of the groups of people. For this to happen, implementation of land reform policies could be the effective measures to reduce high inequality in the distribution of land while imposition of tax to other assets of the rich and investing it for the development of infrastructure in return will provide gainful employment for the poor. Dr. Dhungel is Associate Professor, Department of Economics, TU