Government expects economy to expand by 10.3 percent annuallyThe government has set its sights on 10.3 percent annual growth during the 15th Plan which launches in the next fiscal year.
The government has set its sights on 10.3 percent annual growth during the 15th Plan which launches in the next fiscal year. It has envisaged spending Rs9.24 trillion over the five-year plan period lasting from fiscal 2019-20 to 2023-24, and proposed a host of structural reforms to achieve a higher growth trajectory for the Nepali economy. The annual growth rate during the last three years averaged 5.9 percent.
The five-year periodic plan is being implemented after three consecutive three-year interim plans. The National Planning Commission, the apex advisory body of the government that frames the periodical plans, said 61 percent of the total estimated investment should be borne by the private sector and cooperatives. The government will bear the rest of the expenditure. The private sector needs to invest Rs5.13 trillion, the government Rs3.61 trillion and cooperatives Rs497 billion over the five-year plan period.
The National Planning Commission said that significant investments would be required in agriculture, manufacturing, electricity generation, construction, education and health to achieve the ambitious double-digit growth target.
Addressing a meeting of the National Development Council on Wednesday, Prime Minister KP Sharma Oli said the target was ambitious
but attainable if development work is conducted at a faster pace. He said that the government had considered the proposed plan in accordance with Nepal’s 25-year long-term sustainable growth vision.
The government’s long-term plan aims to transform the country into a developed nation by 2043. Nepal hopes to graduate to a middle-income economy by 2030 and take another leap to a developed country in the next 13 years. The government expects to increase the per capita income to $12,100 per annum, which means it has to grow 12-fold over the next two and a half decades.
The contribution of the manufacturing sector is targeted to increase to 30 percent of the Gross Domestic Product from the current 14.8 percent. The government plans to increase the production of hydroelectricity and renewable energy to 40,000 MW, lay 2,200 km of railway and build 35,000 km of highway in the next 25 years.
The 15th Plan is in the final stages of preparation. Finance Minister Yuba Raj Khatiwada said the government had considered the periodic plan as a framework for the long-term plan. Khatiwada stressed the need to assess the byproducts that the key driving sectors can generate when these sectors are incorporated under high priority areas in the development plan.
“Labour market issues should be considered when bringing in capital and technology intensive production mechanisms, particularly in the construction and agriculture sectors,” said Khatiwada, stressing the need to address the concerns of income inequality and import substitution when implementing development activities.
According to the National Planning Commission, the proposed periodic plan has given priority to various components that will ensure economic prosperity at the grass roots level. “While the government has planned to accelerate the main driving forces of economic prosperity in the following decade, the next 10 years will be spent on making the development goals achieved sustainable,” said National Planning Commission Vice-Chairman Pushpa Raj Kandel.
Kandel said the proposed periodic plan had given priority to finalising national level projects that have remained incomplete for over years. “To this end, the government has considered ensuring good governance in project implementation, improving database management, monitoring and evaluating the projects, and penalising the contractors delaying project construction,” he said.
Kandel said the government had planned to form a national project bank as a wing under the National Planning Commission. According to him, the newly formed body will issue licences to contractors only if they come with concrete preparation to construct the proposed projects. Reducing the population in multidimensional poverty index to 14 percent from 28.6 percent, increasing the life expectancy to 72 years from 69.7 years, reducing the infant mortality rate at birth to 24 from 39 per 1,000 children, increasing the per capita income to $1,600 from $1,012 per annum, and boosting hydroelectricity generation to 5,000 MW from 1,020 MW are among the other targets that the government has set for the 15th Plan.