The report makes the major argument that Nepal is lagging behind in improving its labour productivity, economic growth and quality of life, because the population has not
been empowered to take informed decisions on a wide range activities. Compared to the social rates of return of several other low-income countries, those for Nepal are low,
the report states.

The report also says that access to primary education is still woeful, and the quality of education received by the majority of students at all levels in the country is unacceptably low.

Only one in every three adults was found literate in a 1995 survey, says the report. And in the mountain areas with its unequal distribution of public subsidies, this figure gets far worse, with only one in four enjoying literacy.

The WB report says only less than half of the children complete their primary education, among whom only 10 per cent make it to class 10, and that too after repeating several classes. As for the SLC (Student Leaving Certificate) exam, only less than half of the students pass out, of which only 12 per cent achieve good grades.

The report finds that about 25 per cent of the students enrolled at the country's central educational institution, Tribhuvan University, do not attend classes, while only 25 per cent of the University's arts and humanities students gain their degree in the first attempt.

The WB research team blames the education system of not serving the labour market well. Among the labour force in the country, 62 per cent has had no schooling at all, and out of those who have had a school education, most have spent only an average of 3.9 years in schools.

Both underfunding and sloppy management have been the major reasons behind the poor status of public education in the country, the report quotes various groups of stakeholders as saying. It also says that the teaching staff is highly politicised, with frequent transfer of DEOs (District Education Officers) and frequent changes in rules and regulations.