Sita Sharma
Kathmandu, 05 Aug: Lalita Thapa, who works at a garment factory in Teku, Kathmandu, finds it difficult to manage her household expenses, including those of her two sons, with her monthly earnings. Living in a rented room in Nagau, Kirtipur, Lalita has shouldered the full responsibility of raising, supporting, and educating her children ever since her husband passed away from COVID-19 in 2021.
She works from 8 a.m. to 7 p.m. daily at the garment factory and earns a monthly wage of NPR 17,300. From this limited income, she must cover all household expenses, including her own commuting costs. Recalling a recent hardship, Lalita shared that she still hasn’t been able to repay the NPR 28,000 she borrowed from relatives last year when one of her sons fell ill.
Kailash Giri, who lives in Thankot and commutes daily to work as a security guard in Sanepa, spends around NPR 2,000 per month just on transportation. Despite working 8 to 10 hours a day, his monthly income barely covers the needs of his three-member family. His monthly salary is also NPR 17,300.
These stories reflect the harsh reality faced by many Nepali workers, whose wages are simply not enough to meet even the most basic living expenses.
The government of Nepal has raised the minimum monthly wage for workers to NPR 19,550 effective from the beginning of the month of Saun (mid-July), as part of a tripartite agreement between the government, employers, and trade unions. Under this new rule, workers in industries and factories working eight hours a day are legally entitled to this minimum pay. However, many workers remain doubtful they will actually receive the increased amount.
With soaring inflation, workers say that even the new government-set minimum wage is far from enough to support a family. Subash Khatriwada from Dhading, who works nine hours a day at an electrical shop in Bhotebahal, earns NPR 22,000 per month — slightly more than the legal minimum. Still, he says this income is insufficient to support his family of three amid the rising cost of living.
The minimum wage in Nepal’s formal sector is set based on inflation data from Nepal Rastra Bank. However, a 2024 report by the Central Bureau of Statistics, which analyzed market prices and cost of living, concluded that a family needs at least NPR 26,200 per month to cover basic expenses. According to that report, food prices have risen by 51.7%, house rent by 11.8%, education by 5.1%, and non-food items by 31.4%. The report does not include costs related to communication, healthcare, or recreation.
Trade union leader Janak Bahadur Chaudhary argued that if those additional needs were also considered, the minimum monthly wage to meet the basic needs of a worker’s family should be NPR 30,443. However, employers have refused to go beyond NPR 19,550, citing economic downturns and poor industrial output.
As per Nepal’s Labor Act, the Ministry of Labor and Employment determines minimum wages every two years based on the recommendation of a wage determination committee, and publishes the decision in the government gazette. For the current cycle, the wage includes NPR 12,170 as base pay and NPR 7,380 as a dearness allowance. This wage will remain in effect for the next two years.
Previously, from Saun 1, 2080 BS, the minimum wage had been NPR 17,300. However, for tea estate workers, the wage was set even lower at NPR 13,893.
Wages Below Per Capita Income
Nepal’s per capita income for the current fiscal year (2082/83 BS) is projected to reach USD 1,660. According to the Medium-Term Expenditure Framework prepared by the National Planning Commission at the start of the 16th Five-Year Plan, Nepal’s GDP is expected to reach NPR 8.9 trillion by FY 2084/85, with the GDP for FY 2081/82 already nearing NPR 6.1 trillion.
Currently, per capita income stands at USD 1,517. The target is to increase this to USD 1,859 in FY 2083/84 and USD 2,087 in FY 2084/85 — which, based on current exchange rates, equals around NPR 287,816 annually or NPR 23,984 monthly.
Comparatively, the newly set minimum wage of NPR 19,550 is significantly lower than both current and projected per capita income figures.
Economist Dr. Chandramani Adhikari agrees that the minimum wage is insufficient for formal-sector workers under current inflation levels. Still, he notes that considering the country’s economic and production conditions, accepting the current rate may be the only practical option for now.
Nevertheless, he emphasizes that the government should at least ensure that a single worker’s income can sustain their family’s basic needs, and that the national statistics should serve as a reference point when setting wages. Dr. Adhikari also suggested that due to Nepal’s geographic and economic diversity, each province should have the authority to determine its own minimum wage based on local conditions, rather than relying solely on federal standards.
