Progress and Unmet Targets: Impacts on Economic Growth, Power Generation, and Social Development
Amidst concerns regarding the unaccomplished objectives of the previous plan, the National Planning Commission is currently engaged in preparing the 16th Five Year Plan (FY 2080/081 - FY 2085/086). Recent discussions have shed light on the fact that poverty rates have not experienced a significant decline, while crucial services like access to electricity continue to remain inadequate.
Experts, including former vice presidents and members, have reported that the current number of unemployed individuals in Nepal stands at 900,000. In response, the committee of directors, led by Dr. Ramesh Poudel, a member of the commission, has expressed their aim to reduce this figure to 300,000 by the conclusion of the upcoming five-year plan.
However, the completion of the previous plan has brought forth various deficiencies. Despite efforts to increase per capita income, enhance human capital, and mitigate economic risks, Nepal, still classified as a least developed country (LDC), failed to meet its target of transitioning into a developing country by 2079. The classification as a developing country is now expected to be achieved only in 2026.
The projected economic growth rate of 10.3 percent outlined in the previous plan fell short, plummeting to less than 1 percent in the first year due to the impact of the COVID-19 pandemic. Although there was a slight recovery in the subsequent financial year, reaching 6.7 percent, the growth rate once again declined with the start of the plan. Consequently, the 16th plan has set a more realistic target of 6 percent economic growth.
Efforts to reduce poverty have also encountered challenges, with an estimated 15.3 percent of the population still living below the absolute poverty line at the conclusion of the previous plan. Despite aiming to decrease this figure to 9.5 percent, it is projected to only decline to 11.2 percent by the next fiscal year, leaving approximately 3.3 million people in poverty.
Out of the 17 national pride projects outlined in the previous plan, only four have been successfully completed. The Melamchi Water Project, Upper Tamakoshi Hydropower Project, Gautam Buddha International Airport, and Pokhara International Airport have experienced varying degrees of success. Furthermore, the objective of increasing exports to 15 percent of GDP has not been achieved, with the current estimate standing at 15.7 percent by the conclusion of the plan.
Tourism, a critical sector for economic growth, has struggled to meet its targets. Although the plan aimed for tourists to spend $100 per day, it is anticipated that the projected expenditure will be $65 per day in the upcoming year.
Infrastructure development has also fallen short of expectations. The previous plan aimed to generate 5,820 megawatts of electricity, but the actual figure is estimated to reach only 3,690 megawatts. Similarly, the goal of providing 100 percent electricity access to the population will only be attained by 98 percent.
Additionally, educational targets have not been fully realized, with the literacy rate expected to reach only 62.8 percent by the conclusion of the previous plan. Technical and vocational training programs have also fallen short, reaching only 42 percent of the targeted population.
Railway development, initially set at 348 kilometers, has progressed at a sluggish pace, with only 59 kilometers completed during the five-year plan.
Despite these challenges, the Planning Commission is now in the process of formulating the 16th plan. Recognizing the impact of the COVID-19 pandemic and the Russia-Ukraine conflict, the commission acknowledges that achieving economic growth goals will pose a challenge if economic activities experience a slowdown.
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