Nepal is a land-locked country situated between China in the North and India in the South, East and West. It lies along the southern slopes of Himalayan range. It covers the total area of 147,181 Square Kilometer. Its rectangular shape covers a length of approximately 885-Km from East to West and width varying from 130 – 240 Km. The width is non-uniform. The average width is about 193 Km from North to South. The country can be broadly divided into three parallel geographic regions extending from East to West. They are Mountain Region (4877Meter to 8848 Meters), Hilly Region (610Meter to 4877 Meters) and the Terai (the plain) Region (Below 610 Meter). The Mountain Region lies in the North and covers 35 percent of the land area of the country. The world famous highest mountain “The Mount Everest” lies in this Region. This region accommodates only 7.3 percent of the population. The Hilly Region lies in the central part of the country and covers 42 percent of the area of the country. This Region accommodates 46 percent of the total population. Kathmandu, the Capital of the country lies in this Region. The Terai Region lies in the Southern part of the country and covers 23 percent of the area of the country. This Region accommodates 46.7 percent of the total population of the country. Lumbini, the Birth Place of Lord Buddha, lies in this Region. This Region includes most of the fertile land and dense forest of the country. The major crops of this Region are Paddy, Maize, Wheat, Sugarcane, Vegetables, Tobacco, etc. The total population of the country is about 30 million. The population growth rate is around 3 percent per annum. There is only one international airport in Nepal, which is situated in Kathmandu Valley. As Nepal is a land-locked country, there is no seaport in the country.
Nepalese people are very simple and cooperative. The majority of Nepalese people do not possess higher economic status. The GDP per capita income is around USD 2400.00, which means that the purchasing power of majority of Nepalese is very low. The national urban consumer price index rose by only 3 percent in the current year. The GDP growth rate at current price is around 7.5%. The contribution of agriculture sector to GDP is about 38 percent and that of non-agriculture sector is about 62 percent.
Transportation and Communication
According to the latest Management Information system (MIS) report of Nepal Telecommunications Authority (NTA), 97.65 percent of 26.49 million people in the country have access to telephone service.The report includes data of up to mid-December, 2014. Telephone penetration increased by 12.88 percentage points in the one-year period. It stood at 84.77 percent in mid-December, 2013.
Nepal is a Himalayan country where transportation can be difficult due to its mountainous terrain. Nevertheless, there is road and water transportation. Cable transport is also an emerging mode of transportation in Nepal. Manakamana Cable Car and Chandragiri Cable Car are the two cable transport providers in Nepal. Road is Nepals primary transport mode with total of 13223 km of Highway. Of that 4073 km is paved and the rest 9150 kms unpaved. There is only 1 international airport which is located in Kathmandu but construction of 2 more international airports in Pokhara and Bhairahawa has already been started . There are in totl 46 small regional airports around the country.
In spite of the government’s endeavor to control pollution, some degree of pollution exists in Kathmandu valley. Dust and fume discharged by the vehicles are the main causes of increased pollution in Kathmandu Valley. Other parts of the country can be said to be free of pollution as compared to that of Kathmandu Valley. Kathmandu is a beautiful valley where the temperature comes down to -2 Degree Celsius in the winter (December, January) and goes up to 34 Degree Celsius in the summer (May, June).
With the implementation of liberal economic policy by the Government, participation of the private sector in the economy has increased. As a result of investor-friendly policy pursued by the government, new employment opportunities have been generated in the industrial establishments, bank and finance companies, insurance companies, non-governmental organizations, educational and health institutions, hotels and airlines services.
The present democratic Government with its liberalized economic policy has adopted supportive policy for the industrial growth in the country. Various incentives in the form of tax holiday period, tax exemption, reduction in corporate tax rate is being provided to certain types of industries. Most of the government owned enterprises have been privatized in last few years. Due to the liberalized economic policy of the government, many new industries and big projects are coming up with foreign joint venture. The Government has been pursuing a series of industrial reform measures in order to create a conductive environment for attracting foreign investment and private participation. Thus, for the overall economic growth of the country, the Government has given significant importance to the growth of the industrial sector particularly the export – oriented industries such as garments, carpets, handicrafts, etc.
The Government of Nepal has been adopting liberalized economic policy since last few years. It is trying to create investment friendly environment to attract foreign investments. Nepal Government has pursued open and market oriented liberal policy for economic development of the country. As a result, Industrial Enterprise Act and the Foreign Investment and Technology Transfer Act have been promulgated in 1992. In order to attract foreign investment, the Government has made following provisions:
Hundred percent ownership made possible – Foreign investors are permitted to own up to 100 percent equity share in small (investment in fixed assets up to 10 million Rupees), medium (investment in fixed assets from 10 million to 50 million Rupees) and large scale industries (investment in fixed assets for more than 50 million Rupees).
Areas open for Foreign Investment – Foreign investment is allowed in all areas except some specified areas like cottage industries, arm and ammunition industries, security printing, retail business, travel agency, trekking agency, internal courier service and so on.
Simplification in import of machinery and raw materials.
Repatriation of profits, dividend, technical and management fees.
Stability of Local Currency
The local currency (Nepalese Rupees) is not stable and it is very weak as compared to American Dollars. The exchange rate is around Rs.102.00 per US Dollar on an average.The devaluation of local currency is not the problem of Nepal only rather it is the problem for all other countries except the USA.