Short Description of Past Development Plans of Nepal and Evaluation of the 14th Periodic Plan

GP Chudal
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Short Description of Past Development Plans of Nepal

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First Periodic Plan of Nepal (1956-1961)

The First Plan had four tiers of objectives: production to create jobs, raise living standards, establish necessary institutions, and collect data for the next plan. Before implementing development plans, the Nepalese economy was relatively primitive and underdeveloped.


Transportation, communication, and construction were given priority, agriculture and social services were given second priority, and electricity, irrigation, and drinking water were given third priority. The estimated development outlay for the first plan was Rs.330 million, with foreign aid accounting for approximately 71% of the total.


Except for establishing schools and village development centres, all targets were not met satisfactorily during the plan period. However, the initial plan's budget was only partially spent over the five years. Approximately 75% of the funds were spent.

Second Periodic Plan of Nepal (1962-1965)

Political changes at the end of the first plan disrupt the planning process. The second plan began with a pause. The plan recognized agriculture as a means of production for livelihood security and adjustment to the higher population growth rate, with three-tier objectives: production, distribution, and economic stability. The plan's total outlay was Rs. 670 million, with the foreign sector contributing approximately 83 per cent.


The plan's performance was dismal. This was primarily because the investment climate, administrative machinery, economic decision-making culture, and political commitments needed to be more conducive to completing the programs as quickly as possible. Despite several constraints, the plan resulted in the creation of a database.


Throughout the plan, CBS conducted three major scientific surveys, including the Population Census, Agricultural Census, National Income Survey, and Statistical Survey, to collect primary and required information for a logical, scientific, and practical plan for overall development.

Third Periodic Plan of Nepal (1965-1970)

NPC developed a comprehensive plan with a clear vision and goal based on research, surveys, and data with a clear socio-economic picture. The plan had three main goals: sector development, foundation development, and social inequality reduction. The plan prioritized agricultural development and management reform to increase productivity and output.


As a result, land reform was initiated. Then, transportation, electricity, and social services were given second priority for foundation development. Industrial development was given third priority with the establishment of public enterprises and industry. The total development outlay was estimated to be Rs. 2,500 million during the planning period.


The plan mobilized the local government to implement local development plans and programs. The plan encourages self-investment in the established industries of public enterprises. The plan's most significant accomplishment was the expansion of schools and establishing hospitals and health posts in various districts.
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Fourth Periodic Plan of Nepal (1970-1975)

The transportation and communication sectors remained top priorities. At the same time, adequate attention was paid to the development of the agricultural sector. The plan emphasizes market stability for people's development and welfare. Furthermore, the environment was prioritized to improve socio-economic equity and justice.


The fourth plan's main accomplishments were the construction of roads, small airports, the operation of a trolley bus service from Tripureshwor to Suryabinayak, the expansion of telephone service, and the establishment of post offices.

Fifth Periodic Plan of Nepal (1975-1980)

For the first time, the plan was concerned with promoting agricultural and industrial production. For the first time, geological balance development was made a goal. During the plan period, the economy's average annual growth rate was only 2.2 percent, while population growth was 2.3 percent.


Because of the higher population growth rate, per capita income fell during the plan period. The economy's slow growth was caused by the agricultural sector's slow growth, accompanied by rapid population growth.

Sixth Periodic Plan of Nepal (1980-1985)

To meet the expansionary budget, the plan had limited resources. A higher debt ratio had negative consequences in a macroeconomic crisis. The IMF and World Bank recommended that Nepal implement the Structural Adjustment Program (SAP) to address such a macroeconomic crisis. Such a proposal had no choice but to be accepted. As a result, Nepal began to liberalize its economy. As a result, a first-time minimum basic need approach was launched as a development goal to address issues of poverty and inequality.


The economy's annual growth rate was 5.9 percent during the sixth plan period. The agriculture sector's improved performance contributed to the high growth rate. The education sector's outcome was encouraging as a result of previous efforts. The literacy rate reached 28.9 percent at the end of the sixth plan.

Seventh Periodic Plan of Nepal (1985-1990)

This was the final plan of Nepal's panchayat system. It was founded on the IMF and World Bank's recommendation to maintain SAP continuity. It promoted private-sector involvement in the economy. The plan aimed to increase productivity across all sectors to boost economic growth. It had three goals in mind: productivity, employment, and basic needs security. A massive budget of Rs. 29 billion was proposed in the plan.


The 'basic needs' program, announced in 1985, became the seventh plan's main slogan and priority. This program aimed to meet basic needs such as food, grains, clothing, housing, health, education, and public security, as well as raise the people's economic status to the "Asian Standard" by 2000.

Eighth Periodic Plan of Nepal (1992-1997)

Following the restoration of multiparty democracy in 1990, there was another two-year plan holiday (1990-1992). The plan differed due to democratic founding principles such as privatization, liberalization, and globalization. The plan had three goals: achieving sustainable economic growth, reducing poverty, and reducing regional imbalance. To achieve these goals, a liberalized economic policy was implemented.


Efforts were made during the eight-plan period to replace the previously stated and controlled economy with a market-oriented liberal economy. This was accomplished by encouraging private-sector participation and investment. Approximately 14 public enterprises were privatized during the eight-plan period.

Ninth Periodic Plan of Nepal (1997-2002)

The ninth plan was created with a long-term development perspective of 20 years. In the last four decades, there has been significant progress in developing infrastructure and social sectors. However, more progress was needed in identifying solutions to the significant challenges of poverty and unemployment. As a result, the main goal of the Ninth Plan was poverty alleviation and economic and social empowerment of the people.


The ninth plan aimed to increase industrial production by 6% per year, with a total investment of—35 billion, both domestic and foreign. The plan also predicted the creation of 0.35 million new jobs. By the end of the plan period, the industrial sector's contribution to GDP was expected to reach 14%.

Tenth Periodic Plan of Nepal (2002-2007)

At the end of the ninth plan, 38 percent of the population living below the poverty line cannot meet basic needs. Poverty is prevalent throughout the country. The sole goal of the Tenth Plan is to achieve a remarkable and long-term reduction in poverty over the next five years.


To that end, the Nepalese government has developed a 'Four Pillar' poverty reduction strategy with the collaboration of the government, local governments, the private sector, and civil society. Because of poor agricultural performance and the influence of conflict, the plan could only achieve 3.2 percent economic growth instead of 4.3 percent. Its central theme was poverty alleviation, and it surprised everyone by achieving 30%.

Eleventh Periodic Plan of Nepal (2007-2010)

The TYIP established a long-term vision of a prosperous, modern, and just Nepal, to achieve broad-based economic growth, focused on employment and poverty alleviation, promoting good governance, increasing service delivery effectiveness, increasing investment in physical infrastructure development, emphasizing social development, and implementing inclusive development and targeted programs.


The annual average rate of economic growth was set at 5.5 percent. During the plan period, the average annual economic growth at constant prices was only 4.0 percent. The target for the economic growth rate could not be met due to a decrease in the agricultural growth rate. Compared to the Plan period target of reducing the population below the poverty line to 24 percent, it could be reduced to 25.4 percent.

Twelfth Periodic Plan of Nepal (2011-2013)

The plan's goal was to make a visible difference in the lives of ordinary people by triggering broad-based, employment-oriented, inclusive, and equitable economic growth that would help alleviate poverty and establish a sense of long-term peace. The plan aimed for a 5.5 percent annual economic growth rate.


The average annual economic growth at constant prices during the TYP period was only 4.0 percent. The plan only achieved 2.9 percent growth in job creation, compared to the target of 3.6 percent. In comparison to the target of 68 percent, the government achieved a literacy rate of 70 percent.

Thirteenth Periodic Plan of Nepal (2013-2016)

The plan's objectives, goals, strategy, and priorities are all geared toward achieving the millennium and SAARC development goals and promoting sustainable development, human rights, and climate change adaptation; alleviating poverty by promoting a green economy; and addressing regional and international commitments.


Long-term Goal: By 2022, Nepal will have progressed from a least developed country to a developing country. Annual economic growth averaged 2.92 percent, compared to the target rate of 6 percent. The agriculture sector grew by 2.22 percent during the plan period, compared to the target of 4.5 percent. The non-agriculture sector grew by 3.35 percent instead of the expected 6 percent.

Fourteenth Periodic Plan of Nepal (2016-2019)

The fourteenth plan's vision, goals, and objectives are to achieve the prosperity of the Nepali people by making the national economy self-reliant, highly developed, and socialism oriented; to accelerate Nepal to the status of a middle-income country by increasing people's welfare while maintaining social justice, and to achieve socio-economic transformation of the country by reducing poverty and achieving high economic growth through the generation of productive employment.

General Evaluation of the Fourteenth Periodic Plan of Nepal

The 14th periodic plan of Nepal is the immediate past plan of Nepal. According to the National Planning Commission, Nepal's fourteenth development plan has been more satisfactory than previous periodic plans. The main accomplishment of this plan was the successful election of three levels of government, which laid the groundwork for investor stability and confidence. The Fourteenth Plan was also vital in ensuring the country's goals of economic equality, good governance, development, prosperity, and social justice.


Furthermore, fiscal federalism has been implemented, and the investment environment has become more favourable following the formation of a stable government with a public mandate for stability. Through fiscal policy and incentives, the plan has successfully maintained macroeconomic stability and removed adversities in the economy caused by trade disruption at southern border points and the disastrous earthquake. Based on this plan, accomplishments such as strengthening the link between plans and the budgetary system and implementing the Medium Term Expenditure Framework (MTEF) for strengthening and creating an outcome-oriented financial system were also made.


The total government expenditure during the plan period was NRs. 3 trillion 34.92 billion rupees. In the plan's first, second, and third years, public spending remained at 31.3, 35.9, and 31.6 percent of GDP, respectively. Inflation has remained low due to the economy's faster expansion than in the past and proper fiscal and monetary policy coordination.


Annual economic growth averaged 6.64 percent, compared to the target rate of 6.6 percent. After the eighth development plan, this achievement is the closest to the target. The agriculture sector grew by 4% during the planning period, exceeding the target of 4.7 percent.


The target Human Development Index of 0.57 was already met, and the index stood at 0.574 at the end of the fiscal year 2017/18. The plan period's life expectancy is 70 years, compared to the target of 72 years. Access to safe drinking water has already reached 94.9 percent, exceeding the target of 90 percent. The expenditure ratio of the gross domestic product has increased from 31% to 36%.

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