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Class : 11
Unit : Economics

What are the main causes of poverty in Nepal?

Ans : The main causes of poverty in Nepal are explained below: i) High population growth rate:- The main cause of poverty in Nepal is high population growth rate. Growth rate of population of Nepal is 1.4% per annum as compare to the economic growth rate 4.5%. According to the increase in the number of people, working opportunities are not available. It brings mass poverty. ii) Dependence on agriculture:- In Nepal more than 66% of people are engaged in agriculture and method of cultivation are traditional. It causes low productivity in land and people remain unemployed for long period of time. So it brings poverty. Agriculture provides only seasonal employment only for 5 months in a year. There is widespread problem of disguised unemployment in agriculture. iii) Underutilization of natural resources:- One of the main reason of poverty in Nepal is underutilization of natural resources. Without proper utilization and mobilization of local resources, income cannot be generated. Therefore, there is mass poverty in Nepal. iv) Low industrial development:- Industrial sectors provides more employment opportunities to the people but the growth rate of industrial development in Nepal is very low due to lack of capital, infrastructure, modern technology and appropriate industrial policy. Therefore, there is lack of employment opportunities in other sector except agriculture. v) Regional disparity:- The extend of poverty in Nepal is also different in each region because of diversify geographical condition of Nepal. The life pattern in mountain and hill is more difficult than in Terai due to lack of infrastructure facility, low productivity etc. So under-developed regions significantly increase the figure of poverty. vi) Political instability:- Political instability often persists in Nepal. The frequent change in government, political power economic policies and program, etc. has created threatening in every sector. In such situation, the industrialist and investors cannot create an employment opportunity which is one of the reasons of poverty in Nepal. vii) Inflation:- Continuous rise in price level is another cause of poverty. When price raises the purchasing power of money decreases and it affects the middle and poorer section of the society, it is the cause of poverty. viii) Old technology in agriculture:- Farmers of Nepal are traditional. They use old technology for farming due to which their productivity is low, which causes poverty even though they work hard.
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