Concept Paper of Sixteenth Periodic Plan of Nepal in English

Sixteenth Periodic Plan (Fiscal Year 2081/82-2085/86) Concept Paper (16th Periodic plan of Nepal Approach Paper/ Draft/ Concept Paper)

Background

Nepal has made significant progress in economic, social, and infrastructure development over the course of over seven decades of planned development. During this time, the periodic plan has assimilated changes in the government system, and planned development efforts have continued by improving the development plan's philosophy, destination, priority areas, and programmes. 

Nepal's Constitution strives to achieve the goals of long-term peace, good governance, progress, and prosperity through a federal democratic republican government system. The scope of fundamental rights has been expanded to include state directive concepts and policies, as well as social inclusive and participatory ideals such as economic prosperity. The state's economic goal is to create a socialist-oriented and flourishing economy by creating the national economy self-sufficient, autonomous, and proportional, with a progressive component to promote justice and equality.

Taking the structure and spirit of Nepal's Constitution into consideration, the Nepalese government has deliberately set the long-term aim of "Prosperous Nepal, Happy Nepali" in the year 2075. The goal is to elevate the country to middle-income status by meeting sustainable development targets by 2087 (year 2030). As it occurs, a concept paper has been developed to develop the Sohar Plan, which will be implemented during the following five years (2081/82-2080/86).

Suggested Readings:

• Short Description of Past Development Plans of Nepal and Evaluation of the 14th Periodic Plan
• Sustainable Development Goals and Nepal
• Fifteenth Periodic Plan of Nepal

A Brief Review of the Fifteenth Plan

The Fifteenth Plan's implementation has already lasted four years (2076/77-2080/81). The country's economy collapsed in the first fiscal year of the implementation of the Fifteenth Plan, which was launched with the goal of laying the groundwork for prosperity in the first five years of Long-Term Thinking 2100. This was due to the severe impact of the Coving-19 epidemic on the country's economic and social conditions.

The plan's policies, strategies, tactics, and programmes could not be implemented at the planned speed. Because of the Covid-19 outbreak, the plan's priorities shifted. Economic regeneration and relief programmes were launched to overcome the challenges posed by changes in the global economy and the economic downturn caused by the Covid-19 pandemic. Due to the economy's low production capacity, rising consumption trend, current account deficit, and strain on foreign currency reserves, external sector management has become a challenge.

The goal for the Fifteenth Plan period was to attain an average economic growth rate of 9.6 percent in basic prices, however because to the covid-19 outbreak, the economic growth rate remained at 2.4 percent in the first year of the plan. The Russia-Ukraine war has added to the challenges facing the economy as it recovers from the Covid outbreak. Because of foreign pressures as well as internal structural challenges, the economic growth rate in the second and third years of the plan is 3.8 percent and 5.5 percent, respectively, with a fourth-year growth rate of 2.2 percent expected. According to this strategy, the average economic growth rate for the first four years will be limited to 2.4%.

In the base year 20705/76, the agriculture sector contributed 20.6 percent of GDP, the industrial sector 14.3 percent, and the service sector 60.1 percent.Estimates range from 0 percent to 62.4 percent. Remittances, service trade, and government spending have all contributed to the service sector's growth. The plan intends to raise the per capita national income to 1456 US dollars by the fiscal year 2079/80, from 1410 US dollars currently. The population living below the poverty line is predicted to have dropped to 15.3 percent, with a target of 11.2 percent by 2079/80. Multidimensional poverty has dropped from 28.6% to 17.4%.

During this time, the plan's social indicators have achieved a mixed set of targets. Life expectancy at birth, under-five mortality rate, adolescent fertility rate, net enrollment rate in basic education (grades 1-8), percentage of population with access to the Internet, percentage of population with access to electricity, human development index, and population with access to basic drinking water The results in percentages and other metrics are satisfactory. Some of the plan's goals were unable to be met because to the impact of the Covid-19 outbreak on some sub-sectors of the social sector. Roads and other forms of transportation infrastructure have also made limited progress. For these reasons, meeting the Sustainable Development Goals has become increasingly difficult.

Basic questions and challenges seen in development efforts

1. Continuous unexpected low economic growth, structural problems of the economy, declining contribution of the secondary sector and expansion of the tertiary sector (the development of the tertiary sector is not sustainable without the development of the primary and secondary sectors),
2. Low production and productivity, rising production costs, weak competitiveness,
3. Agricultural produce with low returns compared to cost, increasing aversion to agriculture, dependence even on basic food items,
4. Shrinkage of the industrial sector, attraction to the trade of imported goods rather than the opening of industries of domestic production,
5. Consumption oriented imports, low export capacity and increasing trade deficit,
6. Limited opportunities for internal employment, migration of young manpower along with foreign employment, excessive dependence on remittances,
7. Poor Human Resource Management;
8. Mismatch between programs, investment, development and utilization due to failure to accurately assess needs;
9. An education system that is not connected to the production system, the search for skilled and useful education, the problem of quality and punctuality in higher education, the increase in the demand for foreign currency with the number of students who go abroad for education,
10. Weak public health system, low supply of skilled and sufficient manpower, difficulty in accessing basic health services for common citizens,
11. Unplanned urbanization, wide gap between demand and supply of urban infrastructure and service facilities,
12. Low quality of built physical infrastructure, mismatch between demand and supply, weak commitment to sustainable infrastructure development,
13. Security in the development and use of reliable, safe and sustainable modern information technology,
14. Scattered programs of social security; Increasing liability, poor management, low security perception,
15. Gaps between inclusion policies, practices and outcomes;
16. Changes in the form of violence against women, children, senior citizens and marginalized communities, economic-social-cultural differences and the continuation of traditional thinking,
17. The establishment of strong inter-relationships, failure to ensure inclusive, equitable and balanced regional development through a strong federal governance system,
18. Mobilization of financial resources among limited individuals and entrepreneurs, not reaching the expected contribution to production and job creation from the financial resources in circulation,
19. Weak conditions of market competition, syndicate system, unexpected presence of middlemen between producers and consumers,
20. A large share of informal transactions, under-invoicing, smuggling, investment in illicit sectors such as cryptocurrencies and hyperfunds, capital flight, hundi transactions; Abnormal fluctuations in market liquidity, prices and supply;
21. The gap between the need for public spending and resource mobilization capacity, a large part of revenue mobilization based on imports, uncertain financial system and challenges in implementing financial federalism.
22. Poor allocation efficiency, low capital allocation and poor spending capacity, uncontrollable costs and delays in construction of infrastructure projects;
23. Low returns compared to costs,
24. Weak autonomous monetary policy with stable exchange rate system with Indian currency, more external influence on currency inflation and weak internal control capacity,
25. Poor public confidence in good governance, quality of public service delivery and security, corruption control; Challenges to strengthen social justice, speedy justice, nationalism and national unity,
26. Upgrading in Developing Countries: Managing the Challenges that Come with Achievement
27. Achieving the Sustainable Development Goals: Resource Management and Effectiveness of Implementation.

Course of Actions of the Sixteenth Plan of Nepal

Vision

“Good Governance, Social Justice and Prosperity”

Objectives

• To maintain good governance in the political, administrative and judicial spheres,
• To establish social justice in health, education, employment, housing and other areas,
• To achieve prosperity in human life and national economy.

Holistic strategies

(1) To achieve good governance, social justice and prosperity through structural transformation by identifying, addressing and solving the structural obstacles seen in development efforts.

(2) To strengthen the interrelationship and functional capacity between the concerned bodies of all levels (federal, state, local) and parties (governmental, private, cooperative, non-governmental, development partners and others) in relation to the implementation of the plan.

(3) To implement policy making and development programs based on studies, research and facts.

Areas and strategies of structural transformation

(1) Strengthening of macroeconomic fundamentals

1. Strengthening of the primary sector, development and expansion of the secondary sector and stabilization of the tertiary sector,

2. Development of a predictable financial system along with the expansion of revenue base and scope, inclusive mobilization of financial resources focusing on production and job creation, adoption of a strong and successful monetary policy, external sector stability.


(2) Productivity and Productivity Enhancement

1. Ensuring timely, quality and cost-effective supply system of all types of resources and means of production,

2. Production and deployment of knowledge, skills, efficiency and energetic workforce in line with market demand, adoption of latest technology and management methods based on research and development,

3. Ensuring all kinds of safety in the means of production, production process and storage of the produced goods and access to the market,

4. Encouraging community-based collective production systems, encouraging innovation-based industries and young entrepreneurs, developing quality, sustainable and production-oriented infrastructure,

5. Judicious utilization of available natural resources and means.


(3) Creation of decent labor, productive and inclusive employment opportunities

1. Conducting national skill development and employment programs in collaboration with private, cooperative and non-governmental sectors,

2. Assistance in initial capital investment along with availability of vocational training for entrepreneurial oriented self-employed,

3. Mobilization of remittance income, knowledge, skills, efficiency, work culture, technology, entrepreneurship and self-confidence received through foreign employment in the productive sector,

4. Empowering marginalized groups and communities and promoting inclusive employment through affirmative action,

5. Regulation of migrant workers; In the domestic labor market, priority is given to indigenous workers.

6. Identification of new destination countries with high return income and labor agreements, including safe working environment for foreign employment,

7. Decent work according to ability, equal pay for equal work.


(4) Human resource management:

• Human capital formation and best manpower planning
• Creation of a long-term national manpower plan for human capital formation,
• Creating an environment that utilizes demographic benefits at all three levels of government;
• Creation of internal employment opportunities in the country by producing skilled and capable labor force,
• Consistency between skilled manpower, infrastructure and use of new and digital technologies;
• Capacity development and performance enhancement of existing manpower in public service,
• Development of compulsory and self-study and learning time and work culture,
• Manpower management and mobilization based on research based on testing the competencies required for public service delivery,
• Emphasis on the projection of the specific manpower needed by the country and the corresponding production.

(5) Quality, fair and useful education

1. Promotion of innovative, practical, experiential, skillful and useful education based on discovery, research and development,
2. Adherence to punctuality and promotion of academic governance in higher education,
3. Use of digital technology, laboratories and multidisciplinary libraries in all levels of education,
4. Secondary education focused on career development and higher education focused on enterprise and employment; Effective implementation of the concept of “learning while earning and learning while earning”,
5. Equitable distribution of scholarships targeted at poor and needy students through a mandatory and one-way system,
6. An education system based on yoga, meditation and positive thinking to contribute to the physical, mental and intellectual development of students,
7. Promotion of moral education, encouraging young talent to work in the country.

(6) Quality and accessible health system

1. Free basic and emergency health care; Bringing specialized and highly specialized health services under the scope of insurance and providing them in an accessible manner,
2. Development of health institutions as academic knowledge and service centers,
3. Ensuring the supply of essential equipment and medicines and skilled manpower in health institutions,
4. Integration of all types of health care systems into an integrated system; Promotion of yoga, meditation and physical exercise as counseling services and preventive health programs,
5. Ensuring equitable and specialized health services to citizens of all classes, genders and age groups,
6. Strengthening the health system by ending the need to travel abroad for specific health treatments such as cancer and organ transplants;
7. Federal, provincial and local based on geographic distance and population mapping
8. Expansion of health infrastructure and manpower management,
9. Easy and accessible healthcare through the adoption of modern information technology,
10. Continuous study, research and management to provide health services

(7) Quality infrastructure and orderly urbanization

• Emphasis on building environment-friendly, sustainable and profitable infrastructure,
• Building comfortable, reliable and accessible infrastructure for all;
• Infrastructural development is associated with economic prosperity and social justice.
• Systematic, modern and safe housing plan implementation through integrated infrastructure development,
• End squatters, landless and unorganized settlements and encroachments.

(8) Social Empowerment, Inclusion and Social Protection

- Conducting targeted programs for the empowerment of economically and socially backward classes, communities and gender,
- Adoption of proportional inclusion at all levels and organs of the state based on demographic ratio and capacity,
- Under the social security concept for all economically disadvantaged, physically and
- Membership in a special social security program for mentally disabled and family helpless citizens.

(9) Control of unwanted and informal transactions

- Promotion of competitive markets and regular supply chains,
- Ending all types of syndicate systems and undesirable activities;
- Level determination and regulation between producers and consumers,
- Transformation of informal economic activities into formal activities.

(10) Increasing allocation efficiency and capital spending capacity

- Available resources, but not the tools, in the productive sector, operational, operational,
- Allocation of resources to priority areas based on needs and capabilities,
- Enhancing the receptivity and utilization of available foreign aid,
- Focusing internal and external procurement on feasible projects based on cost-benefit analysis;
- Emphasis on project governance, budget allocation only for projects that have been completed and listed in the project bank.

(11) Conservation of environment and biological diversity, disaster management and sustainable development

- Construction of development that does not affect the environment or has minimal impact; The relationship between environment and development,
- Enhancing financial stability and economic prosperity by promoting a sustainable green economy,
- Prevention and risk reduction and management of natural and man-made disasters,
- Conversion of conventional and petroleum fuel based machines, equipment and vehicles into clean energy,
- Conservation and sustainable management of forests, clean water and fertile land.

(12) Promotion of good governance and effective public service delivery

- Technology based public service delivery with easy access and simple process,
- Accountable, transparent and creative political party,
- easy access to justice; Agile Justice Services,
- loose administrative structure, high morale and dedicated bureaucracy;
- Regular management testing of administrative procedures,
- Disciplined, conscientious and development-loving citizens; Effective civic education,
- Adoption of all corruption control measures in political, administrative and judicial fields,
- Provision for early hearing of complaints.

Methods and procedures in plan formulation

During the plan's development, discussions and interactions will take place with various government officials and representatives from various government agencies, political parties, the private sector, the cooperative sector, the non-governmental sector, subject experts, development partners, and youth via the commission team at the union, state, and local levels. Based on the comments obtained during the debate and engagement, the draft paper of the plan will be amended and presented at the National Development Council meeting. The final draft created in response to the ideas received at that meeting will be authorised by the Government of Nepal Council of Ministers before being published and implemented. To coordinate and facilitate the aforementioned operations, a directorate committee led by the Vice Chairman of the National Planning Commission and subject sectoral committees led by the members were constituted.

Nepal's constitution, existing policy and legal system, long-term thinking 2100, mid-term review of the current fifteenth plan, political party manifestos, experience implementing the federal governance system, sustainable development goals and plans for upgrading from least developed country to developing country, and international treaties and agreements signed by the Nepalese government. 

Based on the commitment and the changing global environment, a detailed and subject-specific development plan will be created. In addition to the general development indicators, the plan's final version will provide quantitative targets for sectoral indicators to be met during the following five years, as well as appropriate methods and key programmes to attain them. Schedule 1 lists major milestones in the development of the Sixteenth Plan.

6. Expected results

The document of the sixteenth plan will be issued by the end of Magh 2080. The formulation of policies, programmes, and annual budget for the financial year 2081/82 will serve as the foundation for the budget and programme of the initial year of the Sixteenth Plan. Subsequently, the subsequent four years will prioritise the implementation of this plan. 

The purpose of this document is to provide guidance for the establishment of the medium-term expenditure structure and yearly development programme of the Government of Nepal, as well as the formulation of periodic plans at the provincial and local levels. Additionally, it is anticipated to assist in the development and execution of budgets.

Read the 16th periodic plan of Nepal Approach Paper in Nepali.