KATHMANDU, Jan 5: Karnali Province, which lags behind in economic development, witnessed a growth rate of 3.39 per cent in the last fiscal year (FY 2023/24). While the agricultural land across the country keeps on shrinking annually, the province has posted an increase of 1.94 percent in land used for agriculture.
According to a study conducted by Nepal Rastra Bank (NRB), the area covered by agricultural crops in this province has increased by 1.94 percent in the review year. Among the major crops, the area covered by paddy and maize crops has increased by 8.48 percent and 2.12 percent respectively, while the area covered by wheat, millet, barley and buckwheat has decreased by 0.97 per cent, 28.16 per cent and 33.30 per cent and 23.01 per cent respectively.
Likewise, the area covered by vegetables and horticulture crops has increased by 36.40 per cent and 5.98 per cent respectively. Similarly, the area covered by vegetable and horticultural crops has increased by 36.40 percent and 5.98 percent.
Overall agricultural crop production has increased by 6.79 per cent in the province, according to the NRB study report. Among the major agricultural crops under food and other crops, the production of rice and wheat has increased by 12.04 percent and 0.43 percent respectively, while the production of maize, millet, barley and sorghum has decreased by 7.61 percent, 19.87 percent, 18.98 percent and 8.46 percent respectively. Milk production in the province has increased by 7.82 percent. Similarly, meat, fish and egg production have increased by 6.58 percent, 3.34 percent and 0.90 percent respectively.
Groundwater for food security
However, the financial sustainability for farmers seems to be dwindling in the province as the credit provided by banks and financial institutions to the agriculture sector has decreased as compared to the preceding fiscal year (FY 2022/23). Credit provided by banks and financial institutions to the agricultural sector of the province has accounted for 9.12 percent of the total credit in fiscal year 2023/24. Credit provided to the agricultural sector has decreased by 1.71 percent compared to the previous year.
A major reason behind the dwindling rate of credit provided to the agricultural sector is the lower credit utilization rate in the sector. According to the NRB, the average credit utilization of the industries included in the sample selection in the province is 48.51 percent. The utilization capacity of the plastic-related industry is the highest at 100 percent, while the utilization capacity of the flour-producing industry under the grain and animal feed production industry is the lowest at 15 percent.
Karnali’s contribution to national GDP on the rise
The study from the central bank also indicates that the province’s contribution to the gross domestic product (GDP) is expected to increase by 3.87 per cent in the current fiscal year. Similarly, the nominal producer price is estimated to have increased by 3.54 per cent.
In the fiscal year 2022/23, the GDP grew by 1.95 percent at producers’ price, while the growth rate was 2.31 percent at the base year price, according to the Central Bank.
NRB has released its annual economic activity study report for the fiscal year 2023/24 prepared on the basis of on-site study carried out in Salyan, Kalikot, Dailekh and Surkhet districts and the non-onsite study conducted in Rukum West, Dolpa, Jumla, Mugu, Jajarkot and Humla districts.
In the review year, industrial credit has increased by 3.33 percent compared to the previous year. The industrial sector has accounted for 6.95 percent of the total credit provided in the province.
The number of tourists entering the province has increased by 23.40 percent. The number of tourists entering the province from India, China and third countries has increased by 23.49 percent, 15.77 percent and 24.84 percent respectively.
The financial sector of the province also seems to be improving. Of the total loans disbursed by banks and financial institutions in the province, the highest of 83.93 percent has been disbursed to the service sector. The number of branches of commercial banks and financial institutions in the province has reached 475 and the number of branchless banks has reached 30. The loan-deposit ratio in the province in the review year is 78.50 percent.
The electricity transmission line in the province has reached 2,416.47 circuit kilometers. Up to the review year, 17.41 megawatts of electricity have been generated in the province.
