Social protection for people in the informal economy of Nepal

This study has attempted to provide an analysis of the scope of existing social protection schemes at different levels, which address the needs of excluded groups of people in Nepal. The study portrays the diversity and character of social protection mechanisms in the country implemented by remarkably broad range of actors, including government, employers’ organizations, trade unions, community groups and women’s cooperatives, as well as families, caste-based and occupation-based groups and communities.

As the informal economy becomes ever more predominant in Nepal, formal schemes of social security reach fewer than 5 per cent of the working population, and the need to develop complementary forms of social protection becomes crucial. At the same time, Nepal’s economy is being profoundly changed through the process of liberalization and globalisation, and poverty reduction is recognized to be the foremost priority on the development agenda. The public expenditure system should be shaped by a far-sighted vision that includes coherent strategies for the development of not only social protection mechanisms, covering health, income security in times of sickness, accident, old-age, maternity and so on, but the broader social needs for livelihoods, employment, job creation, housing and others, failing which the existing inequalities between rich and poor populations may widen further.

Thus, a broader perspective on social protection, one that aims at extending social security mechanisms to include the entire working population, including the informal economy, is seen with increasing clarity to be essential. Any social protection intervention that is restricted to the formal sector workforce can have only limited coverage, and limited success in covering the very real risks facing Nepal’s most vulnerable groups.

This study has attempted to provide an analysis of the scope of existing social protection schemes at different levels, which address the needs of excluded groups of people in Nepal. The study portrays the diversity and character of social protection mechanisms in the country implemented by remarkably broad range of actors, including government, employers’ organizations, trade unions, community groups and women’s cooperatives, as well as families, caste-based and occupation-based groups and communities