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6 Advantages and Disadvantages of Remittance in Nepal

6 Advantages and Disadvantages of Remittance in Nepal  
6 Advantages and Disadvantages of Remittance in Nepal  

Remittance

      Remittance is a process of receiving money from foreign employment or worker. Remittance plays a very significant role in the economic and social development of the recipient country. It helps to alleviate poverty as well as improve the living standards of Nepalese by increasing their access to education and health. Remittance brings a positive effect on foreign exchange resources and the balance of payments. In the 1990s many Nepali workers are working in different countries, especially in the Gulf countries. 
Source: Economic Survey, 2020/21
In the above figure, the average remittance inflow for the last years has been more than  20% of GDP. In the fiscal years 2015/16, 2016/17, 2017/18, 2018/19, and 2019/20 Rs. 665.1 billion, 695.5 billion, 755.1 billion, 879.3 billion, and 875 billion have been remitted.

According to the Economic Survey 2020/21, the highest number of workers going for foreign employment from Nepal to many countries like; Qatar, Malaysia, Saudi Arabia, UAE, Kuwait, Bahrain, Oman, and other countries. 
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Advantages of Remittance

i. Improving living standards: Remittance plays an important role in the living standards of people, especially in poor families. Remittances have made a significant contribution to the country's economy. People live standards life in their homeland due to the money sent by the foreign worker who is working in the foreign country.

ii. Poverty reduction: Remittances play an important role in the poverty reduction of the country. According to the Economic Survey Report in Nepal, 31% to 18.7% of poverty alleviation has decreased in previous years (2075/76). Remittance income received from foreign worker increase the household income which is helpful to support poor families. Increase the living standard and reduce poverty.
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iii. Increase in literacy rate: It is sure that the literacy rate will increase due to remittance. Remittance helps to develop the economic condition of the country and it directly affects in literacy rate. Improving the economic situation will increase the demand for health facilities has been improving and the quality of life is also improving.

iv. Knowledge and skill: Those workers who went abroad for income generation, She/he will also get knowledge and skill from certain jobs or work. She/he can create job opportunities after returning home. 

v. International relations: The most important part of remittance is international relations. Due to remittance, the relationship of our country's financial institutions will be increased with other countries' financial institutions.  

vi. Development of Human Resources: The remittance income received from foreign employment is playing a very important role in the development of Human Resources.  Half of the remittance income is invested in education, health, nutrition, literacy rate, and life expectancy, which means developing Human Resources.

Disadvantages of Remittance:

i. Impact on social and cultural structure:
ii. Decreasing in production:
iii. Continous price rise:
iv. Investment in unproductive sectors:
v. Impact on relationship:

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