Study of Economics in Nepal

  Government Borrowing or Public Debt Government borrowing refers to the process by which a government raises funds to finance its expenditures when its revenue, primarily from taxes, is insufficient to cover spending. It involves borrowing money from domestic or international sources, typically by issuing government securities (treasury bills for short-term, government bonds for long-term) or direct loans.  Reason for Government Borrowing 1. Budget Deficit: To bridge the gap between revenue and expenditure.  2. Public investments: To finance large-scale infrastructure.  3. Economic stimulus: To boost the economy during the recession by raising public spending. 4. Emerging Funding: To address urgent needs such as natural disasters like floods and earthquakes; pandemics like COVID-19; or military conflicts.  5. To Control Inflation: To reduce purchasing power, the government issues public loans.  Sources of Government Borrowing 1. Internal Borrowing: D...

Sources of Government Revenue in Nepal In Nepal, the sources of government revenue are diversified, encompassing both tax and non-tax sources. Understanding these sources provides insights into the country's fiscal structure and the government's ability to fund its operations and initiatives. Tax revenue and total revenue exhibited similar patterns (due to dependency), with fluctuations and a net increase over the period. Non-tax revenue also showed growth, albeit with fluctuations. Foreign grants and repayment of internal loan investment displayed more volatile trends, while cash reserves and irregularities recovery remained relatively stable. The above table illustrates the government's reliance on tax revenue, particularly indirect taxes, as the primary funding source. Non-tax revenue, foreign grants, and other sources also contribute to government income, albeit to a lesser extent. Diversifying revenue sources helps ensure financial stability and supports various govern...

Growth of Nepalese Foreign Trade Nepal's ancient trade history dates back to the beginning of the Malla and Lichchhavi regimes, with trade categorized into three separate countries. With Tibet, Nepal's trade has been influenced by the commercial policy of the Malla rulers, who opened new Trans-Himalayan trading routes between Gangetic plains and Chinese cities. However, the Tibetans, enchanted by business speculation, closed trade routes to Nepal in 1770. To promote trade, treaties were signed with Tibet and India, but the number of Nepalese merchants in Lhasa dropped. With India, trade relations between Nepal and India have been connected since the ancient period, but due to cultural and social similarities and geographical conditions, trade activities have been limited. Nepal's main exports to India include metals, precious stones, species, tobacco, rice, timber, hides, honey, ghee, and artistic metal. With overseas countries, Nepal's trade has been limited due to its...