Persistent Challenges in Poverty Reduction and Infrastructure Development Highlighted in Nepal's 15th Five-Year Plan
Slow Progress and Unmet Targets Affecting Economic Growth, Power Generation, and Social Development
The National Planning Commission's 16th Five Year Plan (FY 2080/081 - FY 2085/086) is being prepared amidst concerns over the unfulfilled goals of the 15th plan. Recent discussions have revealed that poverty rates have not decreased significantly, and essential services such as electricity access remain inadequate.
According to experts, including former vice presidents and members, the number of unemployed individuals in Nepal currently stands at 900,000. The committee of directors, led by Dr. Ramesh Poudel, a member of the commission, was quoted as stating to aim to reduce this figure to 300,000 by the end of the 16th five-year plan.
However, the completion of the 15th plan has highlighted various shortcomings. Nepal, still classified as a least developed country (LDC), failed to meet the target of upgrading to a developing country by 2079. Although efforts to increase per capita income, enhance human capital, and minimize economic risks were made, Nepal is not expected to be listed as a developing country until 2026.
The economic growth projection of 10.3 percent set by the 15th plan fell short, with the growth rate plunging to less than 1 percent in the first year due to the COVID-19 pandemic. The subsequent financial year witnessed a slight recovery, reaching 6.7 percent, but the growth rate dwindled once again with the onset of the 15th plan. The 16th plan, therefore, aims for a more realistic target of 6 percent economic growth.
Poverty reduction efforts have also faced challenges, with an estimated 15.3 percent of the population still living below the absolute poverty line at the end of the 15th plan. Although the plan intended to reduce this figure to 9.5 percent, it is projected to decline only to 11.2 percent by the next fiscal year, leaving approximately 3.3 million people in poverty.
Among the 17 national pride projects outlined in the 15th plan, only four have been completed. The Melamchi Water Project, Upper Tamakoshi Hydropower Project, Gautam Buddha International Airport, and Pokhara International Airport have faced varying degrees of success. Moreover, the goal of increasing exports to 15 percent of GDP has not been achieved, with the current estimate standing at 15.7 percent by the end of the plan.
Tourism, a vital sector for economic growth, has struggled to meet its targets. The plan aimed for tourists to spend $100 per day, but the projected expenditure is anticipated to be $65 per day in the coming year.
Infrastructure development has also fallen short. The 15th 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 achieved by 98 percent.
Additionally, educational targets have not been met, with the literacy rate expected to reach only 62.8 percent by the end of the 15th plan. Technical and vocational training programs have also fallen short, reaching only 42 percent of the targeted population.
Railway development, initially targeted at 348 kilometers, has progressed slowly, with only 59 kilometers completed during the five-year plan.
Despite these challenges, the Planning Commission is now formulating the 16th plan. Acknowledging the impact of the COVID-19 pandemic and the Russia-Ukraine conflict, the commission recognizes that achieving economic growth goals will be challenging if economic activities slow down.
Feature Image Courtesy: The Himalayan Times
