The objective of this study is to evaluate the potential impact of implementation of current land reform policy in Nepal. Using SAM framework, we study the impact of alternative policies of land reform on GDP, households' income, production of different sectors, government revenues, savings, foreign exchange and employment. We found that redistributive reform increases income of poor households and reduces inequality. Productivity augmenting reform has more impact on economy as it increases productivity of all sectors including income of all households keeping inequality unchanged. Furthermore, implementing both reforms simultaneously produce more impact by gaining both equity and efficiency.