Nepal has a population of 23.2 million (2001 census). 48.5% of the population lives in the Terai, 44.2% in the Hills and 7.3% in the Mountains. The average population density is 157.73/km2, with the highest density (330.78/km2) in the Terai, medium density in the Hills (167.44/km2) and lowest in the Mountains (32.62/km2). In relation to Nepal’s five development regions, the Central Development Region accommodates 34.7% of the total population, followed by the Eastern Development Region with 23.1%, the Western Development Region with 19.6%, the Mid-Western Development Region with 12.9%, and the Far-Western Development Region with 9.5%.
The average annual growth rate was 2.08% between 1981 and 1991, but the figures from the 2001 census indicate a population growth rate of 2.27%. The growth rate is highest in the Terai and lowest in the Mountains.
Table 2.2 summarises the population data from the 2001 census.
Table 2.2 Population density and distribution in Nepal
Eastern Development Region (%)
Central Development Region (%)
Western Development Region (%)
Mid-Western Development Region (%)
Far-Western Development Region (%)
Density (per km2)
Source: Preliminary results of Population Census of 2001.
The rate of urbanisation in Nepal is low compared to other developing countries, and some 85% of the population still lives in rural areas with limited access to health and education services. The average literacy rate is now 39.6%, a significant improvement from 14% in 1971.
The 1999 Human Development Index (HDI) for Nepal is 0.463. While there has been a very slow but gradual improvement in human development in all years except for 1993, the current level is still low even by South Asian standards. The indices also show that deprivation in access to employment is much higher than deprivations in health or education. Residents of the Hills and Terai enjoy a higher level of human development than residents of the Mountains. A similar pattern appears when the HDI is disaggregated by gender, with the gender-sensitive development index being lowest in the Mountains, thus further accentuating an imbalance in this region, which is already very high on a national level.
2.2.2 Natural resources of economic significance
The economic well being of Nepal is very closely bound to its natural resources - agricultural land, wetlands, forests, and protected areas.
Although only comprising some 20% of land area, agricultural land is the major determinant of economic activities and the nation’s socio-political identity, according to the Nepal Human Development Report, 1998 (NSAC, 1998). Agricultural land is unevenly distributed, with 55.7% in the Terai, 37.3% in the Hills and 6.9% in the Mountains. Agriculture contributes over 50% of household income, provides employment for about 80% of the population, and has a significant influence on the manufacturing and export sectors of the economy.
Freshwater resources are abundant in Nepal, with approximately 200 billion m3/s flowing through its river systems. The commercial hydroelectric potential has been estimated at up to 45,000MW. The potential for crop irrigation is also very high, probably approaching 90% of cultivable land.
Forests cover some 29% of the land area. This is a mere fraction of the original forest cover, which has suffered increasing population pressures and demand for arable land, pastures, fuel, fodder and farm implements. The high demand for agricultural land has led to considerable deforestation and loss of land cover. This, together with natural phenomena such as floods and landslides, is thought to contribute to an annual soil loss of 20-25 tonnes/ha.
However, in spite of the decline in forest cover, forested land is still one of the most valuable natural resources of Nepal through its attraction for eco-tourism. The majority of protected areas, including the major National Parks, comprise forested land, and their contribution to the national economy, through foreign exchange earnings, is of major importance.
Tourism is the second most important source of foreign exchange for Nepal. Tourist arrivals in 1999 numbered 421,188 and the figure is expected to grow by 8-10% annually in the near future. Approximately 45% of tourists visited protected areas in 1998/99 (see Table 2.3). Four protected areas, Royal Chitwan National Park, the Annapurna Conservation Area, Sagarmatha (Mount Everest) National Park and Langtang National Park, received the bulk of tourists, and there is a lot of potential for increasing the numbers of tourists visiting other protected areas. As tourism-related activities in and around protected areas generate revenue, tourism will remain central to the economic sustainability of the protected areas system.
Table 2.3 Number of visitors in protected areas (1998/99)