Extending social protection for all in Nepal: An analysis of protection gaps

Social protection is at the forefront of the development agenda in Nepal, given its positive social and economic impacts. In addition to the Constitution of 2015 recognizing social security as a right to all citizens in Article 43, the 15th National Development Plan sets the goal “…to make social security and protection sustainable, universal, and accessible, for the implementation of civil rights and to strengthen the trust of citizens towards the state.” The Plan sets ambitious targets to achieve its goals, including covering 60 per cent of the population with basic social protection schemes and the allocation of 13.7 per cent of the national budget for social protection by Fiscal Year (FY) 2023-24. At the same time, the Plan also acknowledges the limitations of the existing system including low levels of coverage, fragmentation between programmes, and lack of an overarching framework to better coordinate the sector.

The key objective of the report is to assess existing protection gaps based on the analysis of social protection programmes in implementation in Nepal. Key aspects covered include: analysis of coverage (effective and legal); the adequacy of benefit levels; and, public investment and expenditure. The analysis also discusses how Nepal’s progress compares with other countries in the region and globally. The report provides a set of recommendations to close the coverage and adequacy gaps in the system and to move towards achieving Government targets for the sector and the sustainable development goals. This report is part of a series of studies on the potential pathways to extend social security for all in Nepal within a sustainable fiscal framework under the European Commission-Directorate-General for International Partnerships financed project on Enhancing Social Protection System: Towards Investments for Results in Nepal.