The semi-annual economic activity report of Karnali Province for fiscal year 2024/25, published by the Surkhet office of the central bank, highlights the province’s vast potential in high-value and organic agriculture. With much of the region still maintaining organic farming practices, the report suggests that Karnali could become a key hub for organic agricultural production in Nepal. This finding could offer a new roadmap for those who believe self-reliance within the country is unattainable.
The report also emphasizes that branding and marketing Karnali’s indigenous products—such as Marsi rice, chino, buckwheat, millet, foxtail millet (kaguno), sorghum (junelo), latte, beans, and other crops—could significantly boost domestic production. It recommends providing production- and sales-based subsidies to commercial farmers cultivating organic ginger and turmeric in the districts of Salyan, Jajarkot, Rukum West, and Surkhet.
“The overall economic development of the region can be achieved by developing and expanding industries based on local agricultural and forest products,” the report notes. It also highlights the untapped potential of natural gas and petroleum reserves in Dailekh, which, if systematically utilized, could reduce Nepal’s dependence on imports. In addition, the province's major rivers—Karnali, Bheri, Hima, and Tila—offer significant opportunities for hydropower generation, water transport, and water-based tourism.
According to preliminary data from the National Statistics Office, Bagmati Province contributed the highest share to the national GDP in FY 2024/25 at 36.5 percent, while Karnali Province contributed the least, at 4.2 percent. In terms of agriculture, Koshi Province led with 21.5 percent, and Karnali lagged behind with just 5.2 percent. Similarly, Bagmati Province accounted for the largest share of industrial output (31.7 percent) and service output (45.4 percent), while Karnali again recorded the lowest figures—9.58 percent for industry and 3.9 percent for services.
Karnali Province’s GDP for FY 2024/25 is estimated at Rs 255bn, with an economic growth rate of 4.74 percent. The sectoral contributions to GDP are projected to be 31.5 percent from agriculture, 9.58 percent from industry, and 58.91 percent from services. The province’s overall contribution to the national GDP is estimated at 4.19 percent.
Rajan Prasad Regmi, Deputy Director of the Central Bank’s Surkhet office, said data for the report were collected and analyzed from eight districts—Rukum West, Salyan, Kalikot, Jajarkot, Dailekh, Humla, Jumla, and Surkhet—with secondary data used for Dolpa and Mugu. The report analyzes economic trends across key sectors such as agriculture, industry, services, and infrastructure.
The report attributes the decline in agricultural GDP contribution to a reduction in arable land. Although Karnali holds significant agricultural potential, the area under cultivation has dropped by 0.11 percent—equating to a reduction of 373,416.25 hectares—compared to a slight increase of 0.01 percent during the same period last year. By mid-fiscal year 2024/25, land under rice and maize cultivation declined by 5.11 percent and 4.16 percent, respectively. Similarly, the cultivated area for wheat, millet, barley, and sorghum decreased by 4.86 percent, 11.52 percent, 1.39 percent, and 12.20 percent, respectively. During this period, credit flow to the agricultural sector in Karnali reached Rs 5.155bn.
The report also highlights challenges in enhancing the competitiveness of the agricultural sector, particularly the need for policy, procedural, and institutional reforms. It raises concerns about the continued use of harmful pesticides, chemicals, and antibiotics in agriculture and livestock, which negatively impact public health.
On the industrial front, most sectors in Karnali experienced a production decline during the first six months of the fiscal year, mirroring the national trend. While the output of paper and paper products increased, the production of grain and animal feed fell sharply by 46.43 percent. The report further states that processed milk, rice, flour, animal feed, sawn wood, and certain textiles also saw production drops of 48 percent, 33.33 percent, and 56.25 percent, respectively. On the positive side, the production of other textiles and paper products increased by 26.67 percent and 48 percent, respectively, and processed milk saw a modest growth of four percent. Total industrial credit disbursed in Karnali Province during the period stood at Rs 3.79bn.
