The report published by the largest umbrella organization of the private sector and independent public policy think tank was handed over to the National Planning Commission amidst a function in Lalitpur on Sunday.[break]
The report, which was prepared based on studies conducted in Kathmandu, Biratnagar, Chitwan, Pokhara, Nepalgunj and Dhangadhi, is focused on five key sectors: agriculture, education, hydropower, transport infrastructure and tourism.
Implementation of the proposed recommendations will ensure development of individual sector, which will consequently help the country´s economy to grow at a faster pace, the report says.
The report has identified slow growth rate in agricultural sector as one of the main reasons for lack of economic growth in the country.
Agricultural sector currently employs more than 66 percent of the workforce but its contribution to the GDP is limited to 35 percent.
"This is because Nepal´s agriculture is mainly subsistence with 85 percent of the total agricultural output used for self consumption," the report says urging the government to focus on commercialization of the sector.
The report has, thus, urged those concerned to increase access of farmers to agro inputs such as fertilizer and irrigation, develop insurance programs to encourage banks and financial institutions to extend more credit toward the sector, develop market centers so that farmers get fair price for their products, and invest more on research and development works.
While the report has identified agriculture as a sector that can play a catalytic role in economic development, it has also recommended greater focus on education to meet the growing market demand for skilled human resources.
To address the problem, the report has stressed the need for more investment for establishing vocational training institutes, which can provide technical and skills-based training and education. The report has also recommended implementation of alternative spending modes such as education voucher system to increase productivity of government spending on education.
Another sector the government needs to focus on is hydropower as energy is prime mover of almost all economic and technological advancements, according to the report.
But since Nepal needs investment of whopping Rs 400 billion to generate electricity that can address the current power shortage situation, it would be impractical to try to mobilize such huge financial resources through domestic investors. Against this backdrop, the only alternative is to attract foreign investment. However, Nepal has not been able to bring in investment from abroad as foreign investors, among others, seek sovereign guarantee from the government.
"So, the government should provide such guarantee till the loan is paid for those commercially viable projects which are going to produce 2,500 MW of electricity within five years," the report says.
The report has also recommended increment in transport infrastructure spending, allocation of budget for maintenance of transport infrastructure based on network usage, creation of packages to prolong the stay of foreign visitors and identification of new tourist destinations, among others, to ensure rapid economic growth.
Besides, common problems faced by every sector such as frequent bandas, labor problems, unstable and inconsistence policies, and non-competitive practices such as formation of cartels and syndicates need to be addressed as well, the report says.
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