Major Challenges for economic development of Nepal | Loksewa old Question Paper 2078

Q. What do you mean by Economic Growth and Economic Development? What are the main challenges of economic development of Nepal? Give your answer with suitable example.

answer:

Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy over a certain period of time.

Economic development is the process of creating wealth that benefits the community as a whole. This is more than a jobs program, it's an investment that increases the prosperity and quality of life for all residents of your community. It is all about fostering and maintaining a healthy economy that can be considered economic development.

Challenges of Economic Development in Nepal

The economy of Nepal is still underdeveloped with low growth and a low per capita income of only $1034 per year. A rapid economic development of the country faces mounting challenges despite progress made in poverty reduction and socioeconomic transformation during the past two decades. The major challenges for the economic development of the country can be listed as below:

1. Poverty and Inequality

In Nepal, 18.6 percent of the people are still living in extreme poverty. In rural and urban areas as well as among different castes and ecological zones, poverty is highly disparate. One third of the population remains poor when we consider health, education, and other aspects of poverty. Furthermore, the income distribution has not significantly improved. Income inequality in Nepal is still high based on the Gini coefficient. Rapid economic growth and equitable income distribution are therefore required to break the vicious cycle of poverty and underdevelopment.

2. Unemployment

Approximately 5 lakh Nepalese youth join the labor market each year, but less than 10% find employment. Those who are not employed in the country go abroad to seek employment. The agriculture sector of the country is plagued by disguised unemployment. Therefore, creating job opportunities in both the public and private sectors is a challenge in addressing unemployment.

3. Practices of subsistence farming

Around two-thirds of the nation's workforce is employed in the agriculture sector, which contributes about one third of the nation's output. As a result of lack of modernization and commercialization of the agricultural sector, agricultural productivity is low, and we have to import food grains and vegetables from India in large quantities. The main problems are an inadequate irrigation system, traditional farming practices, and a lack of seeds and fertilizers. It is thus a great challenge to transform the agriculture sector through commercialization, expansion of irrigation facilities, road networks, storage, fertilizers and inputs, among others.

4. Geographical Difficulties

The topography of Nepal is challenging. Approximately 50 percent of the country is covered with hills and mountains. As a result, physical infrastructure development in all parts of the country has been very difficult. Therefore, connecting and mainstreaming all parts of the country to development is a great challenge.

5. Lack of Capital and Technology

The domestic saving ratio of the country has been low in recent years (around 10 percent). As a result, the resources needed for capital formation are insufficient. A lack of foreign investment in the country has been caused by political instability. As a result, utilizing the country's resources and developing new techniques have been a challenge, and adopting foreign technology to increase productivity has been challenging.

6. Timely Construction of Earthquake Damaged Buildings

Despite three years after the 2015 earthquake, only about half of the 5,00,000 houses damaged by the earthquake have been rebuilt. Reconstruction of government buildings, public schools, hospitals, old palaces, temples, and other historical monuments has not progressed as anticipated. In the present day, it is challenging to manage the resources necessary to construct them on time.

7. Meeting the Resources for the newly formed Federal Nepal 

As the 753 local bodies and seven provinces formed governments, the need for resources has increased rapidly. In order to address rising aspirations of the public, the central government has also needed more resources. In spite of this, tax revenue and other forms of revenue are not sufficient to cover such resource needs. In order to maintain a federal structure, it is challenging to manage the necessary resources.

8. Expanding the Financial Access

In spite of the growing number of financial institutions, access to financial services remains unsatisfactory. Bank branches and activities have been concentrated only in Kathmandu valley and some major Terai cities. There is still no commercial bank branch in any of the local level bodies. UNCDF survey results from 2014 show that only 40 percent of Nepalese have access to banks. As per a study done by the Nepal Rastra Bank in 2019, about 61 percent of Nepalese have access to a bank account. Consequently, it is difficult to increase financial literacy and expand financial access in order to benefit equally from this sector.

9. Meeting the Sustainable Development Goals by 2030

In order to achieve the sustainable development goals, Nepal has committed itself to make significant improvements to health and education facilities as well as rapid income growth by 2030. Achieving such goals requires a lot of resources and commitment. It is a great challenge, given the present state of resource mobilization, to manage resources to meet the objectives of the country.

10. Revitalizing the industrial sector

Over the years, industrial output has lost share of gross value added. Its contribution to GDP in 2001 was around 9 percent, but it declined gradually over time, reaching 5.6 percent in 2019. Increasing our product's competitive capacity is challenging for reviving the industrial sector.

11. Expansion on trade deficit

A rapid increase in imports has led to an alarming expansion of the trade deficit in recent years. Currently, it is about Rs. 13.2 billion per year. Trade deficit GDP ratio exceeded 38 percent. It is challenging to reduce such a deficit by promoting our exports and substituting imports.

These are the some of the notable challenges in context of Nepal. There are other many challenges which you can describe on your own.

NRB IT Policy and Guideliness 2012(2067) | Loksewa IT Engineers 2079

Q. Write down the major areas covered by NRB IT guidelines 2012(NRB IT Policy 2067). (10)

answer:

NRB has formulated the IT policy for its own implementation and for all licensed banks and financial institutions. The Nepal Rastra Bank formulates its own information technology guidelines (NRB IT Guidelines). NRB's IT policy has the following objectives:

• Ensure that IT infrastructure is stable, secure, and standardized.
• Ensure the confidentiality, integrity, and availability of information.
• To increase awareness of the IT system in order to increase efficiency, effectiveness, and economy.
• Minimizing IT-related risks.
• Ensure that the financial sector's information system operates efficiently.

The major areas covered by NRB IT guidelines 2012(2068 B.S) are:

1) IT Governance

• The use of IT resources by a bank should be efficient, effective, and economical in order to satisfy the bank's business demands.
• It is important for risk management policies to consider IT-related risks.
• Before adopting a new technology or system, a bank needs to perform a detailed risk analysis.
• Banks should monitor and measure the performance of their IT functions and report to appropriate management levels.

2) Information Security

• A bank should harden their system, which means that their OS, firewall, and system software should be configured with the highest level of security.
• The bank should maintain a comprehensive mechanism to protect itself against computer viruses.
• Secure cryptographic techniques and end-to-end encryption should be used by banks to protect customer PINs, user passwords and other sensitive information.
• All ATMs should be equipped with CCTV systems and appropriate lighting.
• To safeguard their web applications and databases, banks should implement adequate security measures.

3) Information Security Education

• A bank should implement an information security awareness program and periodically conduct it among its employees, vendors, customers, and other concerned parties.
• Ensure that customers are adequately educated so that they are able to conduct banking operations securely.
• It is important for banks to use appropriate customer authentication systems when accessing their systems.

4) Information Disclosure and Grievance Handling

• Banks should provide clear information about the dispute resolution process in case of security breaches or fraudulent account access.
• The website of a bank should include information about their security and privacy policies as well as fees and commissions.
• If a customer complains, the bank shall handle the grievance.
• Banks should inform their customers clearly about the risks and benefits of e-banking, online banking, and mobile banking.

5) Outsourcing Management

• Banks should ensure that their service providers can provide the performance, reliability, capacity, and security that they require.
• Before entering into an outsourcing agreement, a bank should evaluate the economic, social, and political risks.
• Banks should ensure that outsourcing agreements do not adversely affect the quality and availability of banking services.

6) IT Operations

• A safe environment for IT operation should be ensured by the board and higher management.
• In order to deliver timely, reliable, secure information, banks should have adequate hardware, software, and operating capabilities.
• IT risk assessments should be conducted periodically by banks.

7)  IT Disaster Recovery and Business Continuity Planning 

• Business continuity planning (BCP) frameworks have become more critical with the introduction of the electronic delivery channel and 24/7 service availability.
• BCPs should consider all potential manmade and natural disasters, security threats, regularity requirements, and outsourcing dependencies.
• In order to maintain a 'fail-safe system' with minimum downtime, a bank needs to maintain an economic, efficient, and effective disaster recovery system

8) Information System Acquisition, Development, and Implementation

• Inadequate testing and bad design contribute to many software failures.
• Security requirements should be met by applications that handle customer financial information.
• Prior to implementing the system, all vulnerabilities, loopholes, and defects should be fixed.

9) Information System Audit

• A bank should conduct periodic IS audits to ensure that the controls framework and security procedures are effective.
• An external IS auditor should be appointed if the bank does not have enough staff.

10) Fraud Management

• In order to submit a report to Nepal Rastra Bank, a bank should identify and document all electronic attacks.
• A customer should be informed about fraud and how to identify, avoid, and protect against it.

 Nepal Rastra Bank NRB IT Policy

The various NRB IT Policy are described below:

• Achieve efficient, effective and economic IT operation by implementing appropriate IT systems, such as Financial Information Systems (FIS), Management Information Systems (MIS), Enterprise Resource Planning Systems (ERPs), Real-time Gross Settlement Systems (RTGS), Scripless Security Settlement Systems (SSSS), etc.
• Ensure that physical IT infrastructure is well-structured, secure, and properly documented.
• Ensure information security at multiple levels.
• Implement an audit of IT systems.
• Maintain a data backup and recovery policy by developing, implementing and maintaining it.
• Maintain a Disaster Recovery Planning (DRP) System that is efficient, effective, and economically feasible so that the system is a "fail safe system" with little downtime. In addition, develop and maintain a Business Continuity Plan (BCP).
• Implement IT outsourcing and third-party involvement mechanisms.
• Ensure that all offices have a uniform and legitimate IT infrastructure.
• Provide IT directives to banks and financial institutions that are licensed.
• Standardize IT procurement and monitor it as technology changes.
• Implement a "NRB IT Code of Conduct" to ensure proper use of IT resources at the NRB.
• Enhance the capacity building of employees in information technology

These guidelines and policies are intended to regulate and guide IT-related activities in commercial banks with the aim of strengthening banks to deal with emerging cyber frauds, manage information technology prudently and reduce risks associated with IT implementation.

Artificial Intelligence and its Component | Loksewa 078 question paper

 Q. What is AI? Describe in detail the components of AI. (10 marks)

answer:

John McCarthy, the father of Artificial Intelligence, defined it as "the science and engineering of creating intelligent machines, particularly intelligent computer programs".

An artificial intelligence system is one that makes a computer, a computer-controlled robot, or software think intelligently, like an intelligent human.

The goal of Artificial Intelligence is to create expert system and to implement human intelligence into machines.  Artificial Intelligence  is a technology based on a number of disciplines like computer science, biology, psychology, linguistics, mathematics, engineering and so on. 

The basic components of Artificial Intelligence can be mentioned below:

1. Learning
2. Reasoning
3. Problem-solving
4. Perception
5. Language Understanding

components

Learning

AI relies heavily on learning in a number of different ways. Trial and error is the simplest form of learning. By doing this, the program remembers the section that has given the desired output and discards all other trial actions. An example is the case of mate-in-one chess problems, where moves are tested at random until one is found that results in mate. Whenever the computer is confronted with the same problem, the program recalls the successful move and produces the same result immediately.

Learning is of three types. They are:

• Supervised Learning- computer algorithms are trained using input data that are labeled for particular results
• Unsupervised Learning- A type of algorithm that learns patterns from untagged data.
• Semi-supervised Learning- large amounts of unlabeled data are mixed with a small amount of labeled data during training.
• Reinforcement Learning- algorithms are trained to explore their environments independently.

Reasoning

In other words, reasoning involves generating judgments based on the information provided. A strict rule of validity is applied to perform the reasoning. The two types of reasoning are deductive and inductive. Deductive reasoning involves the truth of the premises guaranteeing the truth of the conclusion, whereas, inductive reasoning involves the truth of the premises supporting the conclusion but it cannot be fully dependent on them. Programming logic generally relies on deductive inferences. Inferences that are relevant to the given problem or situation are drawn by reasoning.

Problem-Solving

Problem-solving is a third major component of the development of artificial intelligence programs and systems. In the development of AI, problem-solving is perhaps the most crucial element since artificial intelligence is all about making computers and systems solve problems like humans do. A more advanced application of AI can include developing efficient algorithms, analyzing root causes in order to identify a desirable solution, and developing heuristics.

Perception

Different sense-organs, either real or artificial, are necessary for intelligent agents to work within the environment and to detect objects in it. An agent uses sense organs such as cameras and temperature sensors to scan its environment. This is called perception. Upon capturing a scene, perceiver analyses the different objects in it, extracting their features and relationships.

Language Understanding

Using Natural Language Processing, machines or robots understand and process human speech and infer knowledge from it. Additionally, it involves the active participation of a machine in the form of dialog i.e. an NLP system focuses on a machine's or robot's output of text or verbal information. Speech and written text can be input and output of an NLP system.