Economics

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An analysis on income of agriculure cooperatives of Lalitpur district
(Department of Economics, 2023) Ghimire, Deepak
Not available
An assessment of public capital expenditure and private investment in Nepal
(Department of Economics, 2023) Sharma, Sudip
Public expenditure is an important fiscal policy tool to achieve the macroeconomic objectives. Different forms of public expenditure have different effects on the private sector of a country and in many cases the desired results are not achieved due to the difference between actual and expected effect. In such context, this study is an important attempt to assess the desired effect of public expenditure in Nepal. The prime objective of this study is to determine the relationship between public capital expenditure and private investment in Nepal. In order to meet its objective, this study uses time series data covering a forty-five years period from 1975 to 2019, employing the ARDL (1,1,1,0) approach of co-integration. The growth trend of the variables revealed that the growth of public capital expenditure and private investment in Nepal is satisfactory during the current Republic System, as compared during the Panchayat Regime and Monarchy. It was observed that, in the long run, public capital expenditure crowds-in private investment. Other things remaining same, if the public capital expenditure increases by a percentage, the private investment of Nepal increases by 0.10 percentage. The short run dynamics and relationships between the variables were estimated using the Error Correction Model (ECM). However, it was observed that in the short run public investment crowds-out the private investment in Nepal. When real public investment increases by a percentage, change in real private investment is expected to decrease by 0.15 percentage, other things held constant. The existence of long run relation was further supported by the negative and significant error correction term, which indicated that the system converges to equilibrium at a speed of 38.42 percentage towards the long run equilibrium after a short-term deviation. In order to minimize crowding-out of private investment, the public investment should be concentrated in building quality infrastructures. Government policy should be strictly oriented to minimize the effect on the private sectors as a result of high inflation, exchange rate instability, and fiscal deficits. Policymakers should consider these short-term effects while designing and developing investment and fiscal policies of Nepal.
Cashless economy: Awareness and adoption among university students in Kathmandu Valley
(Department of Economics, 2023) Karki, Sagar
The study aimed to evaluate the level of awareness regarding the cashless economy among university students in Kathmandu Valley, providing valuable findings on demographics, questionnaire reliability, item, and factor rank analysis, percentage analysis as well as the results of the t-test and Kruskal Wallis test. The majority of respondents in the study were male, with a significant proportion falling within the age range of 21 to 35. Most participants held a bachelor’s degree, and the largest segment reported a family income between 100,001 and 300,000 Nepalese Rupees. The questionnaire’s reliability was assessed using Cronbach’s alpha, revealing satisfactory internal consistency reliability for factors like perceived usefulness and perceived trust. Moderately reliable outcomes were observed for factors of perceived ease of use and lifestyle compatibility while facilitating condition and social influence demonstrated lower reliability. Through the rank analysis of items and factors, valuable insights were gained into their perceived importance. Perceived usefulness, perceived ease of use, and lifestyle compatibility were ranked highly, highlighting their significance in shaping awareness of the cashless economy. The t-test results indicated no significant difference in the mean awareness of the cashless economy between male and female respondents, suggesting that gender does not exert a significant influence on awareness levels. Similarly, the Kruskal Wallis test results showed no statistically significant differences in awareness among the five payment method categories (Debit/Credit card, Mobile Wallet, Mobile banking, Internet banking, and Other). This suggests that individuals’ awareness of a cashless economy remains consistent, regardless of the payment method they use. This study provides valuable insights into the awareness of a cashless economy among university students in Kathmandu Valley. The findings underscore the importance of perceived usefulness, ease of use, and lifestyle compatibility in shaping awareness. Keywords: Awareness level, Cashless transaction, Cashless economy, Payment methods
Contribution of Old Age Allowance on Welfare of Senior Citizens in Nepal
(Department of Economics, 2023) Parajuli, Pratikshya
Social safety nets are the initiatives that assist the most vulnerable and underprivileged people in avoiding extreme poverty. Various social safety nets currently provided in Nepal are in-cash and in-kind services to senior citizens, Dalit community, and unmarried women above age 60, divorced women above 60, widow of all age, people with disability and for child care. This study attempts to analyze the utilization of old age allowances (OAA) by the beneficiaries and its contributions on their welfare. In order to fulfill the objective of the study, primary data were collected in Namobuddha Municipality of Kavrepalanchowk district, Nepal using structured questionnaire. Kavrepalanchowk, which lies in central Nepal was purposively selected as a representative district of Nepal in terms of ethnic diversity and rural-urban balance required for this purpose. A total of 120 senior citizens were interviewed. Simple descriptive statistics such as arithmetic mean, ratio and percentage have been used in the analysis while the findings has been interpreted through tables, graphs, t-test and chi-squared test using Microsoft excel and R software. This study showed that the percent of OAA the senior citizens spend on food and medicines were 30% and 17% respectively. With the help of OAA, majority of the respondents are able to meet their medical expenses, eat supplementary food, use their own pocket money and participate in religious activities. Otherwise 24% respondents and 39% respondents wouldn't be able to fulfill their basic food requirements and be able to spend for their health care respectively. This study showed that 76% respondents are not engaged in any economic activities and living their retired life utilizing OAA. Around 82% respondents have been financially independent and 55% respondents felt that they have gained better respect in the family after receiving OAA. The chi-squared test shows that there is uniformity in spending patterns among different ethnic groups but the individuals living alone has allocated their expenditure differently than those who are living with family or a spouse. This study shows that with the availability of old age allowances, senior citizens have been self-sufficient and live their life with respect, care, dignity and protection. Hence, this type of allowances should be continued in future and make more convenience and systematic in order to provide minimal level of protection and to increase the welfare of the senior citizens.
An economic analysis of Tunnel Tomato farming in Chandragiri Municipality Katmandu
(Department of Economics, 2022) Pal, Shyam Kumar
Agriculture is a major sub-sector of the Nepalese economy where 60.4 percent of the population are engaged producing varied fruits, crops, and vegetables throughout the year. Tomato cultivation is one of the most profitable and feasible crops to improve farmers’ socio-economic conditions and, about 21747 hectares of land is used to produce 413761 metric tons of tomatoes annually in Nepal. This study was conducted on order to analyze the tomato production and its market trend; to examine the cost benefit involved in tunnel farming of tomato; and to estimate the production function of tomato farming. The data was collected from 170 farmers involved in tomato farming in the Chandragiri municipality of Kathmandu district. using structured questionnaire. Three major cost components were taken, namely, total capital cost, total labour cost and total productivity cost. Net benefit per Ropani of land per year was calculated to examine the profitability of the tomato farming. Linear regression model by using Cobb Douglas production function was used where the variables are expressed in logarithmic form. The dependent variable is production output of tomato farming and independent variables are the total capital cost, total labour cost and total productivity cost. The results found that have not acquired the training for the farming as very few farmers are trained. Market price of tomato for farmers is determined by demand and supply of tomato in Kalimati vegetable market. Most of the farmers wanted assurance of stable selling price of tomato. There is very high fluctuation in selling price (Min Rs.5/kg and Max Rs.130/kg) of tomato. Average capital expense, productivity resource cost, labour cost, total cost of farmers during a year were found to be Rs. 128.5 thousand, Rs. 84.4 Rs. 138.8 and Rs.351.7 thousand per Ropani per year respectively. Average gross revenue per year is Rs.362.2 thousand per Ropani and average net benefit was Rs.10.5 thousand per Ropani per year. The coefficient of the total capital cost, total productivity resource cost and total labour cost in linear regression model in determining total production of tomato were 0.360, 0.311 and 0.256 respectively and statistically significant.
An Economic Analysis of Tunnel Tomato Farming in Chandragiri Municipality, Kathmandu
(Faculty of English, 2022) Pal, Shyam Kumar
Agriculture is a major sub-sector of the Nepalese economy where 60.4 percent of the population are engaged producing varied fruits, crops, and vegetables throughout the year. Tomato cultivation is one of the most profitable and feasible crops to improve farmers’ socio-economic conditions and, about 21747 hectares of land is used to produce 413761 metric tons of tomatoes annually in Nepal. This study was conducted on order to analyze the tomato production and its market trend; to examine the cost benefit involved in tunnel farming of tomato; and to estimate the production function of tomato farming. The data was collected from 170 farmers involved in tomato farming in the Chandragiri municipality of Kathmandu district. using structured questionnaire. Three major cost components were taken, namely, total capital cost, total labour cost and total productivity cost. Net benefit per Ropani of land per year was calculated to examine the profitability of the tomato farming. Linear regression model by using Cobb Douglas production function was used where the variables are expressed in logarithmic form. The dependent variable is production output of tomato farming and independent variables are the total capital cost, total labour cost and total productivity cost. The results found that have not acquired the training for the farming as very few farmers are trained. Market price of tomato for farmers is determined by demand and supply of tomato in Kalimati vegetable market. Most of the farmers wanted assurance of stable selling price of tomato. There is very high fluctuation in selling price (Min Rs.5/kg and Max Rs.130/kg) of tomato. Average capital expense, productivity resource cost, labour cost, total cost of farmers during a year were found to be Rs. 128.5 thousand, Rs. 84.4 Rs. 138.8 and Rs.351.7 thousand per Ropani per year respectively. Average gross revenue per year is Rs.362.2 thousand per Ropani and average net benefit was Rs.10.5 thousand per Ropani per year. The coefficient of the total capital cost, total productivity resource cost and total labour cost in linear regression model in determining total production of tomato were 0.360, 0.311 and 0.256 respectively and statistically significant.
Economic Cost of Safe Drinking Water and Sanitation in Lekbesi Municipality
(Department of Economics, 2022) Kunwar, Bal Mukunda
The economic cost of safe drinking water and sanitation in Lekbesi municipality, Surkhet explored the cost for safe drinking water. Socio-economic, consumer’s preference over treatment methods, costs associated with human health, water-borne diseases, was studied. The descriptive research design was followed supported by quantitative evidence, supplemented by microbial water quality testing at the point of use in systematic random samples of 121 households. 58.7% of the respondents are drinking water directly, followed by 38.8% using a ceramic candle filter, 9.1% and 6.6% are using chlorine and boiling to drink water, respectively. It has been observed that 30.3% and 9% of water samples of filters are in intermediate and high risk, respectively. Out of 625 people in 121 households, 38 households and 62 persons had suffered from diarrhea or worm and had to take rest for 85 working days. The economic cost for selection of water treatment methods was estimated to be NPR 1632.8 with maintenance cost per annum NPR 146.3. The cost of treatment for water-borne disease (diarrhea) was NPR 1500 for all travel, medicine and logistic arrangements the opportunity cost for caretaker was NPR 2436. Overall, the gross economic cost of treatment for unsafe water was NPR 3936 per person per annum.
Effectiveness of door-to-door deposit collection on saving and borrowing behavior of small business in urban Nepal
(Department of Economics, 2023) Khatiwada, Shraddha
This study holds significant importance as it offers a comprehensive examination of doorto-door collection services for small business enterprises in urban Nepal. It also provides valuable insights into the potential of door-to-door collection services to promote smallscale savings in a diverse urban context. Furthermore, study presents an in-depth analysis of door-to-door collection services for small business enterprises, examining the characteristics, behaviors, and perceptions of 121 individuals participating in such services. The main objective of the study is to examine the nature of the door-to door services and its effectiveness in promoting small scale savings in urban Nepal. The study encompasses a diverse range of respondents, exploring factors such as age distribution, ethnicity, education, gender, family type, industry/business type, annual turnover, trust in service providers, motivations for engagement, and the subsequent impact on saving and borrowing behavior. The study shows a diverse age distribution, with a significant portion of participants falling within the 36-45 age range. Ethnic diversity is highlighted, indicating a representation of various groups, with Janjati being the largest followed by Madheshi, Brahmin/Chhetri, Dalits, and Muslims. Educational attainment predominantly features individuals with a bachelor's degree. Gender distribution shows a male predominance among the respondents. The study examines the industry/business type distribution, revealing that the retail sector dominates with varying annual turnovers. Respondents' satisfaction levels with the trust and reliability of door-to-door collection service providers are assessed, along with motivations for engagement. Engagement patterns reflect a preference for daily involvement in door-to-door collection, driven by the benefits of increased access to capital, business expansion opportunities, and financial stability. The practice has notably impacted saving behavior, with a significant majority reporting increased savings, and borrowing behavior, as a majority experienced decreased borrowing. Negative incidents or risks associated with door-to-door collection are acknowledged, though the majority of respondents express satisfaction with the services and willingness to recommend them to fellow small business owners.
Effects of labour migration on productivity and technical efficiency in rice farming in Kanchanpur, Nepal
(Department of Economics, 2023) Bhatt, Bina
Labor migration for employment is one of the most significant economic phenomena in a country like Nepal. However, there is no consensus among past studies on whether smallholder agricultural systems are deteriorated, are reinforced or remain unchanged due to the labour migration for foreign employment and the remittance received. This study aims to examine the effects of labour migration for foreign employment on productivity and technical efficiency of rice farmers applying it to the case of Nepal. The study is based on primary data obtained through cross sectional single-visit survey of randomly selected representative samples of migrant and non-migrant households during January 2022. Sample for the study consist of 140 households, comprising 67 migrants and 73 non-migrant households. The study employed Cobb-Douglas production function and stochastic production frontier analysis to estimate productivity and technical efficiency respectively. T-test was conducted to see the difference between the socioeconomic and farm-related characteristics of migrant and non-migrant households. The study found that the average yield of rice was lower in the migrant households than that of non-migrant households. The mean value of marginal productivity of land was estimated 0.89 quintal per kattha for migrant households and 1 quintal per kattha for nonmigrant households. The mean value of average productivity was estimated 1.33 quintal and 1.43 quintal for migrant and non-migrant households, respectively. Similarly, the estimated mean technical efficiency level was 82 percent for migrant household and 94 percent for non-migrant households. Moreover, the migrant households lagged behind in socio-economic and farm-related characteristics including land holding, access to irrigation, mechanization, education, use of inputs and output compared to non-migrant households. Based on the findings of the study, it can be concluded that labour migration for foreign employment has negative effect on farm productivity and technical efficiency. There is a need for more in-depth analysis at a greater scale.
Government spending on transport and communication and economic growth in Nepal
(Department of Economics, 2023) Neupane, Dirgha Narayan
The objectives of this study is to analyze the trends of transport and communication capital expenditures of Nepal, and to evaluate the relationship between government capital spending on transport and communication and its impact on real GDP in Nepal. It applied regression techniques with domestic time series annual data sets for the period 1990 to 2021. Data and measurement issues are addressed. Summary statistics, partial correlations, and unit root test are carried out along with t, F, R- squared, adjusted R-squared and DW statistics to find out accurate coefficients of estimated regression equation. The results showed that government capital expenditures on transport sector has significant positive effect on real GDP of Nepal along with the control variables broad money supply, total trade and gross capital formation. However, the impact of capital expenditures on communication sector was insignificant. To increase economic growth, government capital expenditures on transport sectors were friendlier in Nepal.
Impact of agricultural credit finance on food production in Nepal
(Department of Economics, 2023) Dulal, Anuj
The institutional credit has always been perceived as a critical factor for agricultural development in Nepal through complementing working capital, easing liquidity and investment constraints. The present study has examined the trends and variations in institutional credit flow to agriculture in Nepal for the period 2005 to 2020 using compound annual growth rate. Further, impact of agricultural credit on food production was also assessed using time series data. The study is based on the secondary data collected from various published sources. Results indicated that institutional credit to agriculture in real terms has registered a significant positive growth during the past one and half decade and the highest annual growth was observed during 2007 and the overall compounding annual growth rate of sixteen year is 29.99 percent. The study further analyses the short run and long run impact of agricultural credit on food production in Nepal. This study used annual data covering the period 2005–2020. The autoregressive distributed lag (ARDL) approach is applied to explore the cointegration between underlying variables. The findings of the ARDL Long-Run Bounds Test suggest that there is long term relationship among food production, agricultural credit and cultivation land area. The empirical results reveal that food production, agricultural credit, and cultivating land area have a positive and signiﬁcant impact on agricultural production in both the short-run and long-run. Therefore, the study has suggested for better access to agricultural credit to farmers for enhancing food production.It is desirable for both the government and the NRB to consider amendment current policies, investing more in actual farmers and enhance credit flow to the agriculture sector to ensure that they have access to the agricultural needs and facilities to drive agricultural transformation. Keywords: food production; agricultural credit; CAGR; ARDL approach; Nepal
Impact of exchange rate on foreign direct investment: A comparative study of Nepal, India and China
(Department of Economics, 2024) Bhandari, Surya Bahadur
This paper empirically investigates the impact of exchange rate volatility on FDI in Nepal, India and China respectively using time series data from 1990-2022. Data used in study is from secondary source specially from UNCTAD. It observed that the foreign direct investment in Nepal increased by 10.96 times in absolute terms, the FDI in India increased by 208.52 times in absolute terms whereas, the FDI in China increased by 54.24 times in absolute terms during the study period. The percentage of FDI inflows to GDP at current price range is - 0.10% to 0.54% in Nepal, 0.03% to 3.72% in India and 0.88% to 5.98% in China, during the study period. The exchange rate shows that, the 4.26 times decrease in value of Nepalese rupee in terms of US dollar, the 4.49 times decrease in value of Indian rupee in terms of US dollar and 1.41 times decrease in Chinas Yuan in term of US dollar during the study period. For the selection of the model’s lag duration, the Akaike information criteria (AIC) is employed. The Autoregressive Distributed Lag (ARDL) model is used to investigate the effects of exchange rate volatility on Foreign Direct Investment (FDI). The empirical results show that the estimated coefficient of nominal exchange rate volatility is negative in all the selected countries but significant only in India and China. In short, the currency volatility of the host country leads to decrease the FDI inflows into that country. Keywords: Foreign Direct Investment, Exchange rate, Currency Volatility
Impact of Tourism Development on Economic Growth of Nepal
(Department of Economics, 2023) Khadka, Kapil
Nepal has a good potential for tourism development. Tourism development could lead to economic growth of destination country, however, there is a debate whether tourism causes economic growth or not. Hence, this study is conducted to examine the trend of inbound tourist arrival and tourism receipts in Nepal and to examine impact of tourism on economic growth of Nepal. To conduct study, secondary data were used which is taken for the year 1975 to 2021. The variables are rebased into common base year i.e., 2010/11. The independent variables are government consumption, gross fixed capital formation, tourism receipts and trade volume with the dependent variable gross domestic product. Unit root test was applied to examine the presence of unit root using Augmented Dickey Fuller test.Autoregressive Distributed Lag model was used to examine the impact of different independent variables on dependent variable. The results of the study showed that arrival of inbound tourist in Nepal is increasing. The foreign exchange earnings from tourism is also increasing. India, China, UK, USA, and Sri Lanka are the major countries from where the most of the tourists come to visit Nepal.The estimated long-run coefficients for government consumption, gross fixed capital formation, and trade volume are found to be positive and statistically significant, suggesting a positive relationship between economic and these independent variables. However, the results of the study showed that there is no relationship between tourist receipts and economic growth in the long run.
Macroeconomic determinants of VAT revenue in Nepal
(2024) Panta, Bishumna; Ananta Raj Dahal
Available in full text
Marketing and Supply Chain Analysis of Onion Sub- Sector in Siraha District
(Department of Economics, 2023) Sah, Anjali
Available with full text
Relevance of New Democratic Economic Policy of MAO Tse-Tung in Contemporary Nepal
(Faculty of Economics, 2011) Shrestha, Pradeep
This thesis entitled ‘Relevance of New Democratic EconomicPolicy of Mao Tse-Tung in Contemporary Nepal,’ try to analyze therelevance of New Democratic Economic Policy of Mao in contemporaryNepal. New Democratic Economic policy of Mao and its relevance incontemporary Nepal are chronologically analyzed. The writing style ofthis thesis is both analytical and descriptive. New Democratic EconomicIdeology/Policy of Mao is nothing more than mixed economic systemwhich is weighted heavily on socialist side and give moreemphasis on‘equalization of land ownership’ and ‘control of capital’. ThisIdeology/Policy aims to secure the interest of not only public andcooperative sector but also the private sector. There is the co-existenceof public, cooperative and private sector. In the history of economic development of Nepal, neo-liberaleconomic policies adopted could not found successful in achieving thegoals set by these policies. As a result, the country is politically unstable,socially decaying, economically stagnant and institutionally frustrating.Therefore, it becomes urgent to frame a alternative ‘New EconomicModel’ based on our geo-political, geo-morphological, geographicallocation, social diversity and resources of the country to transform ourcountry into independent, self-reliant and modern industrial economy.In this context, New Democratic Economic Ideology of Mao is beingmore relevant in contemporary Nepal. It favors state capitalism. Understate capitalism, state coordinate and regulate the activities of allenterprises – large and small, whether state, cooperative, individualpeasant, private capitalist or joint state-private capitalist owned-in thespheres of operation, supply of raw materials, markets, labour and trade,so that all units of the economy contribute to the rapid industrialization and transformation of the whole economy. Therefore, it may be the best policy prescription to transform our country into self-reliant, independent and modern industrial one with social justice and equity.
Relevance of New Democratic Economic Policy of Mao Tse-Tung in Contemporary Nepal
(Faculty of Economics, 2011) Shrestha, Pradeep
This thesis entitled ‘Relevance of New Democratic EconomicPolicy of Mao Tse-Tung in Contemporary Nepal,’ try to analyze therelevance of New Democratic Economic Policy of Mao in contemporaryNepal. New Democratic Economic policy of Mao and its relevance incontemporary Nepal are chronologically analyzed. The writing style ofthis thesis is both analytical and descriptive. New Democratic EconomicIdeology/Policy of Mao is nothing more than mixed economic systemwhich is weighted heavily on socialist side and give more emphasis on‘equalization of land ownership’ and ‘control of capital’. ThisIdeology/Policy aims to secure the interest of not only public andcooperative sector but also the private sector. There is the co-existenceof public, cooperative and privatesector. In the history of economic development of Nepal, neo-liberaleconomic policies adopted could not found successful in achieving thegoals set by these policies. As a result, the country is politically unstable,socially decaying, economically stagnant and institutionally frustrating.Therefore, it becomes urgent to frame a alternative ‘New EconomicModel’ based on our geo-political, geo-morphological, geographicallocation, social diversity and resources of the country to transform ourcountry into independent, self-reliant and modern industrial economy.In this context, New Democratic Economic Ideology of Mao is beingmore relevant in contemporary Nepal. It favors state capitalism. Understate capitalism, state coordinate and regulate the activities of allenterprises – large and small, whether state, cooperative, individualpeasant, private capitalist or joint state-private capitalist owned-in thespheres of operation, supply of raw materials, markets, labour and trade,so that all units of theeconomy contribute to the rapid industrializationand transformation of the whole economy. Therefore, it may be the bestpolicy prescription to transform our country into self-reliant, independentand modern industrial one with social justice and equity
A study on financial repression in the context of Nepal
(Department of Economics, 2022) Gautam, Bidur
American Economists Ronald McKinnon and Edward Shaw in 1973 labelled the set of well-intended but counterproductive financial policy as financial repression (FR) in relation to slower development of South Korea. Major tools for financially repressive policy are interest control, capital control, foreign exchange control, forced reserve requirement and appropriation of credit. They have huge implication in savings, consumption, and investment and government finance from macroeconomic perspective. For example, the forced interest rate below market clearing rate may increase demand of loan causing imbalance with supply which may bring the uneconomic rationing of loans and may cause inefficiency and dead weight loss. It may distribute the financial welfare from savers to burrowers. This study tries to study the FR policy tools from the perspective of the development of economic theories and policies globally from different angle: for and against. Also, this study tries to analyze the Nepalese macroeconomic indicators. It mainly focuses in three parts: the effect of FR in government finance, relation of FR to economic growth and finally the channels (saving-investment or volume channel and efficiency channel). Since, the present study is only indicative, simple tools of analysis such as time series plot, correlation, lagged correlation were used. The findings revealed that the government revenue is positively correlated with FR policy tools. Saving and investment are not very well correlated with FR policy tools. The reason may be the price signal distortion due to capital and foreign exchange control. Efficiency of investment is negatively correlated to FR policy tools such as interest rate and money supply. In the existing scenario, long term growth may have relation to long term growth through efficiency channel. Almost all of government practices includes some form of FR for the purpose of optimization of revenue, to mitigate the future risk of default and to direct financial resources in the desired directions. As compared to tax policy for the government, the financial policy tools are intricate, complex and less debated, but their effect are long term in nature. So, it is very important that the effect of financial policies should be examined periodically to ensure that they do not create FR and adversely affect savinginvestment channels and their efficiencies.

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