Council of Ministers approves 16th Five Year Plan, aims to increase GDP to Rs 8.6 trillion after five years

Published On: May 14, 2024 06:21 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 14: A meeting of the Council of Ministers has passed the 16th five-year plan. Government Spokesperson Rekha Sharma said that the 16th five-year plan was endorsed by the cabinet meeting held at Singha Durbar on Tuesday. According to her, the government’s policy and programs and the 16th five-year plan were discussed and approved by the cabinet meeting.

The draft of the 16th Five Year Periodic Plan (2081/82-2085/86) with the main goals of 'Good Governance, Social Justice and Prosperity' was sent to the Cabinet for final approval by the National Planning Commission (NPC) on Sunday.

The periodic plan to be implemented from the next fiscal year 2081/82 carries some ambitious targets such as achieving an economic growth rate of 7.3 percent and per capita income of USD 2,413. In the current fiscal year, the projected economic growth rate of Nepal is 3.9 percent and the per capita income is USD 1,456.    

Similarly, the five-year plan targets reducing absolute poverty to 20.3 percent and consumer inflation to 5 percent by the fiscal year 2085/86. Similarly, it also plans to increase Nepal's human development index to 0.650 from the current 0.601, human wealth index from 76.3 to 78 and to reduce the economic and environmental risk index from 29.7 to 24.    

The plan aims to increase the average life expectancy of Nepalis to 73 years from the existing 71.3 years within five years. The number of families with access to a health facility within half an hour's distance is currently 77 percent, and the target is to increase it to 90 percent, literacy rate to 85 percent and reduce the unemployment rate from 11.4 percent to 5 percent.    

The periodic plan aims to take the hydropower production, which is currently around 3,300 MW, to 11,769 MW within five years. Similarly, access to the Internet will become 90 percent while 85 percent of families will have access to banks and financial institutions.    

A goal has been set to bring the rule of law index from 0.52 to 0.80, the global competitiveness index from 52 to 65 and the corruption reduction awareness index from 35 to 43. The periodical plan includes sectoral indicators, transformational strategy and major interventions to achieve the set goals and targets.    

According to the NPC, the draft has been prepared with transformational programs along with sectoral strategies. The updated planning includes transformational strategies, major interventions and quantitative targets.    

The sectoral headings include Strengthening Macroeconomic Fundamentals and Rapid Economic Growth; Enhancing Production, Productivity and Competitiveness; Decent Job and Productive Employment; Educated, Skilled and Healthy Human Capital Formation; Quality Infrastructure and Integrated Transport Management System; Modern, Sustainable and Systematic Urbanization and Settlements; Social Empowerment, Inclusion and Mobilization and Development and Reinforcement of Provincial and Local Economy and Expansion of Formal Sector.    

Likewise, Balanced Development for Reducing Poverty and Inequality and Creating an Equitable Society; Efficient Fiscal Management and Capital Expenditure Capacity Enhancement; Governance Reform and Promoting Good Governance' LDC Graduation and Beyond, and Sustainable Development Goals and Green Economy are the other sectoral themes for the 16th Periodic Plan.    

As targeted, the revenue-GDP ratio will be increased to 24 per cent from the current ratio of 17.8 percent and the federal expenditure will be increased to 32 per cent in ratio to GDP from 26.5 percent at present.    

Similarly, the 16th periodic plan has targeted not to exceed the sovereign loan from 45 percent of the GDP while the trade deficit would be reduced to 24 per cent in ratio to GDP from 27 per cent at present.    

Likewise, the inflow of remittance would be maintained between 22 to 24 per cent of the GDP.    

The 16th periodic plan has set some ambitious targets for increasing domestic production and productivity including establishing 140 industrial zones, establishing one more special economic zone and increasing the power production and consumption as well.    

As planned, electricity worth Rs 41 billion would be exported year-on-year by the end of the 16th periodic plan and the energy sector would be promoted to reduce the overall trade deficit.    

The periodic plan has targeted to create 1.2 million jobs in a year and increase the minimum wages of the workers to Rs 25,000 per month while bringing the number of social security beneficiaries to 2 million.    

A plenary meeting of the National Planning Commission held in early May 2023 had approved the 16th five-year periodic plan (2081/82-2085/86).    

The draft of the 16th plan has the objective of maintaining good governance in political, administrative and judicial sectors, maintaining social justice in health, education, employment sectors, and achieving prosperity in social life, economic development and national economy.    

The new periodic plan has determined a strategy of achieving good governance, social justice and prosperity through structural transformation by identifying, addressing and resolving structural obstacles seen in development activities.    

The structural transformation strategy has incorporated the issues of adopting latest technology and management methods based on research and development, producing decent, productive and inclusive employment.    

As per the draft, the government will adopt a policy to run national skill development and employment programs in collaboration with private and non-government sectors while priority would be given for the empowerment of marginalized communities and promoting inclusive employment through affirmative action.    

"Employment will be created within the country by producing skilled and capable human resources through the utilization of demographic dividends in all three-levels of the government," reads the concept paper of the periodic plan. A strategy has been adopted to identify new destination countries with high returns along with safe and secured work for foreign employment and signing of bilateral labor agreements.


Leave A Comment