Impact of remittances on the socio-economic development of Nepal : A study on remittance contributions, challenges, and policy implications in Nepal (2014–2024)

Abstract

This thesis analyses the role and impacts of remittances in the progress of socio-economic aspects in Nepal from 2014 to 2024, with a particular focuses on their contributions, associated challenges, and implications for future policies. Based on Nepal’s long-standing tradition of labour migration, known by the term Lahure, originally used to refer Nepali youths serving in British and Indian armies, the migration trend now has evolved to encompass civilian workers as well in foreign destinations. Over the period, remittance has evolved as a major contributing factor in the national economy by supporting the poverty reduction, uplifting the human capital development and driving national economy smoothly Applying a mixed-methods approach, this study incorporates Key economic data of Nepal with the qualitative observations from semi-structured interviews conducted with remittance-receiving households across Nepal. Quantitative data, collected primarily through Nepal Rastra Bank (NRB), World Bank, and other published relevant journal and articles offer evidence-based findings of remittance patterns and their relations to national GDP, poverty levels, and household consumption behaviours. At the same time, in-depth interviews reveal remittance incomes are largely used in consumption, education and healthcare, with little portions channelled into productive investment, and expose the struggles faced by returnee migrants. The research findings indicate that while remittance inflows provides positive short term results, Nepal’s growing over reliance on foreign labour markets entails significant long term risks In absence of effective and on time policy measures, Nepal remains exposed to external economic shocks and prolonged marginal growth in key domestic sectors like agriculture and industry. This thesis also recommends for effective financial literacy programs, tailored investment schemes, and support policies for migrant returnees of Nepal. The study concludes that without the strategic governance remittance are like to remain as temporary economy supporting tool rather than a sustainable driver for long term development.