Print Edition - 2014-06-17 | MONEY
NPC proposes implementing seven-year plans from 2016
Jun 16, 2014-
The National Planning Commission (NPC) has finalized the third periodic plan which went into effect from the current fiscal year. The commission has recommended that the government make seven-year plans after the current plan ends. NPC Vice-Chairman Govinda Pokharel said that the NPC had proposed introducing seven-year plans as per the country’s target to graduate to developing country status from the current designation of least developed country (LDC).
The current periodic plan, which is at the stage of an approach paper with its complete form still being prepared, will end in mid-July 2016. The approach paper has advanced the deadline of becoming a developing country to 2022 from the previous 2030. “We plan to become a developing country within the next plan period,” said Pokharel. This is the first time that the NPC has proposed introducing a seven-year plan while a majority of the periodic plans have lasted five years.
The government has been working on the budget for the next fiscal year, and the new leadership at the NPC has brought up the idea for possible inclusion in the financial plan. If the next periodic plan is prepared for seven years, it will end in 2023, a year after the targeted deadline of graduating Nepal to developing country status.
To graduate from an LDC to developing country, Nepal will have to invest heavily, particularly in the infrastructure sector, according to a need assessment analysis done by the NPC. Investments totalling Rs 9,696 billion (at constant prices) will have to be made to attain the gross national income target until 2021-22.
Although experts have explained the reason for elongating the plan period as supporting the effort to advance from LDC status, they said that such a stretched-out scheme may not be practical as it would be difficult to predict allocation of resources over a long term.
Former vice-chairman of the NPC Shankar Sharma said that a vision document or need assessment for seven years would be a good move, but preparing a plan for such a long time would not be practical.
“From the perspective of predicting resource allocation, planning for three years is practical. Predicting resource allocation for five years is difficult, and doing so for seven years is almost impossible particularly in Nepal’s context where the situation can change overnight,” said Sharma.
In the past, five-year plans would be made, and to make allocation of resources more predictable, three-year medium-term expenditure frameworks would also be prepared.
Published: 17-06-2014 09:40