Dimension of nepalese economy

Prepared for an assignment

1. 1

Major Assignment
Business Environment BBA 3755








Submitted To: Mohan Basnet
Prepared By: Romina Shrestha
LC00016000038
Nepal Business College







Annotation: This Assignment is prepared as the second major assignment of
Business Environment headed by our faculty teacher Mohan B. Basnet. It is
about the theoretical framework on the dimensions of Nepalese economy.

2. 2

32%
13%
55%
Agricultural Sector
Industrial Sector
service sector
In Context of theoretical framework. Explain the dimension of Nepalese
economy.
The dimension of Nepalese economy consist of various sectors. The national income is not
solely generated by one of the facets of economy but it includes various facets that contributes
for national income as well as growth of economy. These dimension of economy are also
known as structure of economy consist of; demographic forces, income level, income
distribution, growth of industrial and agricultural development, balance of payment, rate of
inflation, urbanization, globalization.
In context to Nepalese economy we have 3 sectors that contributes for national income they
are;
1. Agricultural sector (32%)
2. Industrial Sector (13%)
3. Service Sector (55%)








Economic Sectors in Nepal (% of GDP at current prices)
Sectors 2000/01 2005/06 2010/11 2015/16
Agriculture 36.58 33.58 36.50 31.7
Industry 9.46 8.09 6.7 13.4
Service 53.56 58.11 56.8 54.9
Total 100 100 100 100

Note: Agriculture includes forestry and fishing, Industry includes Manufacturing and mining,
Service includes trading and retailing.

3. 3

The dimensions of economy may be analyzed through four facets which are interrelated
they are explained below:









1. The Economic Dimension: This dimension showcase the performance of nation on the
basis of level division to external, internal, demand side and supply side. Similarly, it
indicates how well everything has been executed throughout for the purpose of
achieving plans and goals. This indicates the status of the nation as well as symbolizes
on how sound the economy of the nation is. This is a frame from where investors sees
favorable and unfavorable situation to invest for the nation.
 The Internal Economic performance: Includes Gross domestic products, income
distribution, poverty level, personal consumption, saving, debt, and credit
availability, budget position (surplus/ deficit), inflation, interest rate, fiscal and
monetary policy.
 The External Economic performance: is reflected by Balance of payment,
exchange rate and foreign trade volume. The economic dimension indicates the
purchasing power and pattern of consumption of the people. The economic
performance maybe classified into demand side performance and supply side
performance.
 The demand side performance is reflected by per capita income and income
distribution among the population.
 The supply side performance includes saving, investment, productivity, and
capacity utilization.


The Economic Dimension
gross domestic product,income
distribution,poverty level,personal
consumption,saving,debt,credit
availability,budget
position,inflation,intrest rate,fiscal and
monetory policy
The Socio-Economic Dimension
Size,distribution,density,growth,age and
gender mix,urbanization and migration of
population
The Agricultural and Industrial
Dimension
potentials to supply goods,services to the
consumer and raw material to the industry
The Economic-Development Dimension
Development policies and strategies
allocation of resources.

4. 4

2. The Socio- Economic Dimension: This dimension of economy indicates the
demographic features that directly or indirectly affect business environment. It is
composed of both quality and quantity attributes of people that has certain or major
influences on market. The size, distribution, density, growth, population, age, gender
mix, migration are some of the factors that are underneath of this dimension. Similarly,
it includes cultural values, society’s perception. For example every society has unique
identity different among others, which is also responsible for creating distinctions and
variations where in context to Indian society either religiously or personal beliefs
Indians, they reject beef product and most of them prefer vegetarian hence, beef, buff
butchers shops are in low rate.

3. The Agricultural and industrial dimension: Agriculture includes forestry and fishing
whereas industry includes manufacturing and mining. Agriculture is the major
occupation of Nepalese people, farming, growing crops, cattle, fishing and so-on seems
favorable here in Nepal. Industry is related to the production of goods and services it is
the secondary sector of Nepalese economy. This dimension of an economy reflects the
potential to supply good and services to the consumer and raw materials for industry.

4. The Economy- Development Dimension: the pattern of economic development of a
country largely depends upon the system of national planning. The direction and
priority of the development of different sectors are reflected development plans. They
also portray the development policies and strategies along with the allocation of
resources in different sectors of the economy.



Conclusion
In conclusion, these four facets of dimensions of an economy collectively determines
the soundness of economy which means that the synergy of these 4 (economic, socio-
economic, agricultural & industry, and economic – development) dimensions
represents the economy of a country.