The National Planning Commission (NPC), the apex body that frames the country’s development plans and policies, is all set to finalise the 14th Three-Year Plan without making much changes to the targets and concepts laid in the approach paper introduced before the end of the last fiscal year in mid-July.

Just before the expiry of the 13th three-year plan on July 15, NPC had introduced the approach paper on the 14th Periodic Plan, laying out vision, goals, strategies and working policies for the country’s socio-economic development for a three-year period between 2016-17 and 2018-19.

“Based on the approach paper we have started framing specific action plans so as to meet the targets set by the approach paper,” NPC member Swarnim Wagle told the Post. “Once this process is complete, we will finalise the three-year plan before the end of 2016.”

The plan, once finalised, will work as a guideline for all government bodies to pursue development activities.

The three-year plan has envisaged attaining economic growth of 6.5 percent in the current fiscal year. If this growth rate is attained, the country’s gross domestic product (GDP)—at basic and constant prices—will stand at Rs2138.6 billion in 2016-17.

In the fiscal year 2017-18, the periodic plan aims to achieve a growth rate of 7.2 percent, which will push up GDP to Rs2,292 billion. And in 2018-19, the plan projects economic growth rate to surge to 7.9 percent, expanding the size of the GDP to Rs2,473.4 billion.

To attain these targets, the government needs to invest Rs2,425 billion—at constant price—in the three-year period, says the approach paper. Of the total fund, 39.4 percent is expected to come from the government, 54.7 percent from the private sector and 5.9 percent from cooperatives.

Earlier, the NPC was planning to revise figures on GDP and GDP growth rates before finalising the three-year plan. But it has decided not to do so, deeming the targets were attainable. “The ground reality has changed since the approach paper was framed. But the NPC believes projections made by the paper need not be reassessed at this point,” Wagle said.

Wagle, for instance, believes that economic growth target of 6.5 for this fiscal year is attainable. “Our GDP growth is projected to have shrunk to 0.8 percent in the last fiscal year. Considering the low base, attaining 6.5 percent growth rate won’t be very difficult as envisaged by the plan,” Wagle said.

Wagle’s optimism also stems from “good monsoon” that the country recorded this fiscal year, which has raised hopes for jump in agricultural production. Agriculture sector makes a contribution of over 30 percent to the country’s GDP.

Also, remittance inflow has remained steady so far, which means consumption and services sector will not suffer. “And if local elections are held within the deadline proposed by the government, demand will further go up, resulting in rapid disbursal of funds,” Wagle said, adding, “Considering these factors, the economic growth of this fiscal may even beat the target by 0.5 to 1 percentage point.”

In the next fiscal year, the streamlining of public finance, according to Wagle, will support economic growth. The new constitution has fixed May 28 as the day for presentation of annual budget for the upcoming fiscal year. This means annual budget, as in the current fiscal year, will be presented one-and-a-half months prior to the beginning of the new fiscal year.

“This provision, coupled with the determination shown by the government to strictly monitor implementation of various budgetary projects and programmes, will start bearing fruit from next fiscal year, resulting in higher capital spending. This will give impetus to growth,” Wagle said.

On top of this, addition of electricity to the national grid will also help the economy grow in the next fiscal year, according to Wagle.

In the next fiscal year alone, 26 hydroelectric projects, included 456MW Upper Tamakoshi, are expected to commence operation, which will add up to 737 megawatts of power to the grid.

In fiscal year 2018-19, another 10 projects with electricity generation capacity of 353 MW are expected to come into operation.

“These hydroelectric projects will address problems brought about by inadequate supply of electricity, largely benefiting the manufacturing sector,” Wagle said.

Inadequate supply of electricity has been identified as one of the four binding constraints for Nepal’s growth. Other binding constraints, as identified by the Ministry of Finance, are: policy implementation uncertainty; high cost of transport; and challenging industrial relations and outdated labour laws and regulations.

“We are currently in the process of revising the labour law, while plans to build new roads, including Kathmandu-Tarai fast track, will eventually reduce transport cost,” Wagle said.

“With regards to policy implementation, we have just introduced new Industrial Enterprises Act and Special Economic Zone Act, which will address concerns of the private sector.”

Yet Wagle acknowledged that there were backlogs in terms of introducing new legislations. “But we are committed to introducing a host of reforms to create an enabling environment for investment,” he added.