Nepal’s economy moving towards non-agriculture sectors
Himalayan News Service
Kathmandu, January 29:
Although 80 per cent of Nepal’s population is dependent on agriculture, the share of farm income out of the total income has declined by 13 per cent in the last decade, showing a gradual shift towards non-agriculture sector.
But, the average household income saw a quantum leap of over 80 per cent during 1995-96 to 2003-04, according to Nepal Living Standard Survey (NLSS-II). During the period, annual per capita income increased from Rs 7,690 to Rs 15,162, thanks to an increase in non-farm income sources, particularly remittances.
The Central Bureau of Statistics (CBS) survey states the share of farm income declined to 48 per cent in 2003-04 from 61 per cent in 1995-96. However, the non-farm income increased to 28 per cent from 22 per cent and of other sources, remittances increased from 16 to 25 per cent. The percentage of agricultural households has decreased from 83 in 1995-96 to 78 in 2003-04. On the other hand, the proportion of irrigated land area has increased sharply from 40 to 54 per cent in the same period. The percentage of holdings operating less than 0.5 hectares of land (small farmers) increased from 40 to 45 per cent.
The per cent share of agriculture wage employment has decreased from 53 to 37 per cent, while the non-agriculture wage has increased by 16 percentage points. The average nominal daily wage has increased by 88 per cent in agriculture and by 80 per cent in non-agriculture sector during the period. The survey reports that the country’s economy is largely dependent on remittances sent in by large number of workers in the Middle East, Malaysia and other parts of the world. The proportion of households receiving remittances has increased from 23 per cent in 1995-96 to 32 per cent in 2003-04.
Average amount of remittance per recipient household in nominal terms has increased from Rs 15,160 to Rs 34,698. Share of remittance from outside Nepal has increased from 55 per cent to 76 per cent over the period. The share of remittances from India, which was 33 per cent in 1995-96, has slipped to 23 per cent in 2003-04.
With all these, the annual per capita consumption has increased from Rs 6,802 to Rs 15,848 during the period. The survey shows that the growth in per capita consumption is 91 per cent for the bottom quintile of the population, whereas 177 per cent for the top quintile as a result of an impressive growth across all population groups.
It also shows a widening disparity of consumption pattern in between rich and poor. The bottom 20 per cent of the population accounts for a mere six per cent of total consumption while the richest 20 per cent of the population accounts a whopping 53 per cent.
The percentage of people classified as employed has increased from 67 to 74 per cent. The group classified as inactive has decreased by six percentage points and remained at 23 per cent. Unemployment rate is 3.8 per cent in 2003-04 compared to 4.9 per cent in 1995-96.
A good point to note is that the country’s social front witnessed a relative progress during the period, as access to electricity, piped water, education and health services all have fairly increased. Households’ access to electricity and piped water has increased from 14 to 37 per cent and from 33 to 44 per cent respectively. Access to primary schools within 30 minutes stands at 91 per cent from 80 per cent in 1995-96.
Similarly, access to commercial banks, market places, vehicle passable roads and paved roads increased by 7, 10, 10 and 13 per cent, respectively.