ECONOMIC TIMELINE OF NEPAL

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Economic development in Nepal has been challenging, since time immemorial, due to the frequent changes in the political leadership. The political isolation of the early Nepali kingdom fostered an economic system of rent seeking elites and resulted in increased income inequality. The subsequent economic liberalization, with the end of absolute monarchy, led to economic growth and improvement in living standards of the people. As a Federal Democratic Republic, Nepal embarks on a new journey where it can hopefully, progress towards sustainable economic growth.

The following timeline highlights the key economic activities as the country transitioned from autocracy to democracy:

PERIOD SALIENT FEATURES
Rana Regime
  • Divided the country into sub-region for administrative purpose
  • Military establishment
  • State took the ownership of mineral resources
  • Jagir system for civil administration was introduced
19th Century
  • Jhara System for labor services was introduced
  • Four infrastructure agencies were designed – Rajya, Guthi, Birta and Kipat
  • Started collected revenue from the citizens by the King
1935 AD (19 BS) – 1940 AD
  • Tejarath Adda – Started providing credit to people
  • Industry Council was introduced
  • Company Act and Nepal Rastra Bank Act was drafted
  • Biratnagar Jute Mill was established under Company Act
  • Development board for industry, trade and agriculture was established
  • Nepal Bank Ltd. was established under Nepal Bank Act
1946 AD (2002 BS)
  • Sadar Muluki Khana printed Nepali notes for the first time in Nepal
1952 AD (2008 BS)
  • First Budget Prepared by the then Finance Minister (Subarna Shumsher)
1955 AD (2012 BS)
  • Planning Commission was started
1956 AD (2013 BS)
  • Nepal Rastra Bank as central bank was established
  • First 5-year plan introduced – Yojana Mandal Act
1960 AD (2016 BS)
  • Nepal Rastra Bank started printing Nepali Note
  • Establishment of National Industrial Development Corporation
1961 AD (2017 BS)
  • Introduction of partyless Panchayat system
  • NPC council formed under the then King.
1963 AD (2019 BS)
  • NPC dissolved and new planning body formed under chairman of council of ministers
1966 AD (2022 BS)
  • Establishment of Rastra Banijya Bank
1967 AD (2023 BS)
  • Establishment of Insurance Board
1968 AD (2024 BS)
  • Establishment of Agriculture Development Bank
  • Taska related to national budgeting and foreign aid handed over by Ministry of Economic Planning to Finance Ministry
  • National Planning Council morphed into National Planning Commission under the chairmanship of the Prime Minister
1970-1980 AD (2026 – 2036 BS)
  • Reconstruction of NPC as the central planning agency
  • Exports stagnated and imports surged
  • Country experienced severe economic crisis
  • Adaptation of structural and economic reform programs of International Monetary Fund and World Bank – NPR devalued, import regimes liberalized, system of industrial licensing eased and simplified export procedures.
  • Adopted regional approach in developmental planning
  • Adopted distributive approach
  • Priority was given to integrated rural development
1990 AD (2046 BS)
  • Re-establishment of democracy
  • NPC formed again by the newly elected government
1992 – 1997 AD (2048 – 2054 BS)
  • Implementation of 8th plan
  • NPC introduced free market oriented economic system for development
  • Government became the regulator and promoter of private investment
  • Tariff reduced, import restrictions abolished, duty drawback and bonded warehouse introduced
  • Abolished export duties and dual exchange rate
  • Banking sector deregulated (Commercial banks started holding foreign exchange bonds)
  • Industrial Enterprise Act, 1992 introduced
  • Introduction of National Air Policy. Foreign Exchange and Technology Transfer Act 1992 and system of Value Added Tax
  • Reduction of personal income tax
  • Nepal joined World Trade Organization and South Asia Free Trade Area.
  • Attention to education, health, rural drinking water, sanitation, reduction of human poverty and quality of life.
1997-2002 AD
  • Set back in growth of industrial production
  • Financial progress due to establishment of bank and financial institutions
  • Implementation of 9th Plan
  • Implementation of Agricultural Perspective Plan
  • Adoption of more liberal and market-oriented policy
  • Trade, industry and tourism affected by global recession
  • Huge developmental expenditure growth due to Maoist conflict
  • Nepal-India Trade treaty
2005-2009 AD
  • GDP per capita declined
  • High energy on peace accord
2015 AD
  • Huge economic impact due to earthquake
  • Earthquake followed by blockade from India
2016 AD
  • Focus on Sustainable Development Goals
2017 AD
  • First plan of Federal Political System of Nepal
Ankshita Chaudhary

About Ankshita Chaudhary

Ankshita is working as an intern in the Research as well as the Communications and Outreach Department at Samriddhi Foundation.

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