Temporary and permanent labour migration from Nepal on a regular basis dates back to the first quarter of the nineteenth century. Over the years, some of the root causes of this have been poverty, unemployment, a declining natural resource base, and long-lasting conflict (Gartaula 2009).
The population of Nepal rose rapidly after World War II, climbing from 8.4 million in 1954 to 18.5 million by 1991. This resulted in food shortages, which contributed to push a relatively large number of Nepalese to migrate overseas (Whelpton 2008). The population increased to 23.1 million in the 2001 census (Nepal, Central Bureau of Statistics 2003), and is estimated to have reached almost 30 million in 2010 (UN DESA 2011).
Political instability and increasing unemployment have also been drivers for outmigration and with a large number of Nepalese working overseas, the economy has become highly dependent of remittances. Officially recorded remittances rose from $147 million, or 2.5 per cent of GDP in 2001, to $2.99 billion, or 23 per cent of GDP, in 2009 (figure 1). As remittances from India are often made through informal channels, a good portion of them remain unrecorded. Notably, the proportion of remittances to GDP would be even higher if transfers through unofficial channels were included.