Economics 11 Notes for Economics Notes

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Causes of Poverty

1. Rapid Population Growth
In Nepal, the growth rate of population is very high 1.40% per annum as compared to the economic growth rate is 4.5%, according to world Economic Outlook – 2011. Due to extreme high population, the living standard of people is degraded.

2. Gender inequality

The unequal distribution of income and wealth is another cause of poverty in Nepal. The gap between rich and poor is very high and the distribution of national income is not in favors of poor people. So, poor get poorer and poorer and rich get richer and richer.

3. Illiteracy

Illiteracy is also one of the causes of poverty. Illiterate people are unaware about family planning measures and birth spacing and are not familiar with the problem created by large population. So, the more population, the more requirement of job causes unemployment and ultimately arises poverty.

4. Lack of employment

Nepal, a country with poor, weak and fragile economy has very limited industries (large). The population is growth rate is high but industries are limited. So, rate of unemployment is growing rapidly leading to poverty.

5. Low saving

About 70 or more percent of total salary or income is spent in food which is very high and rest 30% is spent in other sectors such as education, health etc. The percent shared by saving is null or very less.

6. Old technology

Farmers of Nepal are traditional and are poor. They use old technology for farming and their production include max food crop (49.1%). Similarly, the production is low, which causes poverty even though they labour hard enough.

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