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A Cabinet meeting on Tuesday endorsed the 16th Five-Year Periodic Plan, proposed by the National Planning Commission, to be implemented from the next fiscal year 2081/82 BS. The plan sets ambitious targets, including achieving an economic growth rate of 7.3 percent and increasing per capita income to $2,413. Currently, Nepal’s economic growth rate is projected at 3.9 percent, with a per capita income of $1,456.

The plan also aims to reduce absolute poverty to 20.3 percent and consumer inflation to 5 percent by the fiscal year 2085/86 BS. Additionally, it seeks to elevate Nepal’s Human Development Index (HDI) from 0.601 to 0.650, the Human Wealth Index from 76.3 to 78, and lower the Economic and Environmental Risk Index from 29.7 to 24. The average life expectancy is targeted to rise from 71.3 years to 73 years within five years.

Other key goals include improving healthcare access, aiming for 90 percent of families to have a health facility within a half-hour's distance, increasing the literacy rate to 85 percent, and reducing the unemployment rate from 11.4 percent to 5 percent.

In terms of infrastructure, the plan aims to boost hydropower production from 3,100 MW to 11,769 MW within five years. Internet access is projected to reach 90 percent, and 85 percent of families will have access to banks and financial institutions. Other significant targets include enhancing the Rule of Law Index from 0.52 to 0.80, the Global Competitiveness Index from 52 to 65, and the Corruption Reduction Awareness Index from 35 to 43.

The draft plan also includes sectoral indicators, transformational strategies, and major interventions to meet these goals. The sectoral headings include Strengthening Macroeconomic Fundamentals and Rapid Economic Growth; Enhancing Production, Productivity and Competitiveness; Decent Job and Productive Employment; Educated, Skilled and Healthy Human Capital Formation; Quality Infrastructure and Integrated Transport Management System; Modern, Sustainable and Systematic Urbanization and Settlements; Balanced Development for Reducing Poverty and Inequality; Efficient Fiscal Management and Capital Expenditure Capacity Enhancement; Governance Reform and Promoting Good Governance; and Sustainable Development Goals and Green Economy.

Revenue as a percentage of GDP is targeted to rise from 17.8 percent to 24 percent, with federal expenditure increasing from 26.5 percent to 32 percent. The plan also aims to keep sovereign debt below 45 percent of GDP and reduce the trade deficit to 24 percent of GDP.

The inflow of remittance would be maintained between 22 to 24 percent of the GDP.

The energy sector is a significant focus, with plans to export electricity worth Rs 41 billion annually by the end of the plan. Additionally, the goal is to create 1.2 million jobs annually, raise minimum wages to Rs 25,000 per month, and increase social security beneficiaries to 2 million.

The plan also emphasizes good governance, social justice, and prosperity through structural transformation, addressing obstacles in development activities, adopting new technologies, and promoting inclusive employment. A policy will be implemented to run national skill development and employment programs in collaboration with private, government, and non-government sectors, prioritizing the empowerment of marginalized communities through affirmative action.

The concept paper of the periodic plan states that employment will be created within the country by producing skilled and capable human resources through the utilization of demographic dividends at all three levels of government. It also outlines a strategy to identify new high-return, safe destinations for foreign employment and secure bilateral labor agreements.

The price of gold has increased by Rs 1, 600 per tola in the domestic market on Thursday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 140, 000 per tola today. It was traded at Rs 138, 400 per tola on Wednesday.

Similarly, tejabi gold is being traded at Rs 139, 300 per tola. It was traded at Rs 137, 750 per tola.

Meanwhile, the price of silver has increased by Rs 5 and is being traded at Rs 1, 805 per tola today.  

Most of the commercial banks have reduced interest rates on individual fixed deposits for the month of Jestha (mid-May to mid-June). Eight commercial banks have kept their rates unchanged, while nine have reduced their rates, and three have made a slight upward revision to their rates. As a result, the average interest rate on individual fixed deposits will drop to 7.06 percent in the next month compared to 7.14 percent that the banks are providing now.

Banks have been gradually reducing interest rates on deposits amid low demand for credit and excess liquidity in the banking system. Banks now offer a maximum of 6.8 percent interest on institutional fixed deposits, while they are offering as high as 8.8 percent on remittance fixed deposit accounts. Banks cannot maintain a gap of more than five percent between the upper limit of fixed deposits and the lower limit of savings deposits. This implies that interest on saving deposits will also come down.

The central bank allows banks to change their interest rates by a maximum of 10 percent of their average interest rate in the previous months. Out of 20 commercial banks in the country, Agriculture Development Bank Ltd is offering the lowest interest rate of 5.66 percent, followed by Nepal SBI Bank (6.39 percent), Rastriya Banijya Bank Ltd (6.4 percent) and Everest Bank (6.5 percent). Nabil Bank Ltd and Nepal Bank Ltd are offering 6.75 percent interest rates each, while Sanima Bank has fixed such rates at 6.9 percent.

Laxmi Sunrise, Nepal Investment Mega, Siddhartha, Standard Chartered, Citizens, and Prime Commercial are offering a seven percent interest rate. Seven banks are offering interest rates above seven percent. NIC Asia and NMB Bank Ltd are offering the highest (7.8 percent) interest rates on individual fixed deposits for the month of Jestha.

Commercial banks started publishing rates individually since the beginning of the current fiscal year in mid-July last year. Before that, Nepal Bankers Association used to fix rates citing a ‘gentleman’s understanding’ among banks. Commercial banks have liquidity of around Rs 400bn as demand for loans is not coming, say bankers. Even though lending rates have fallen to a 27-month low, banks are not being able to invest.

Although Nepal Rastra Bank had set a target to increase bank lending by 11 percent in the current fiscal year, banks could increase their lending by only 5.1 percent as per the data till mid-March. With just three months remaining in the current fiscal year, it is impossible to achieve the target of lending growth. Banks, however, are hopeful that the demand for loans will go up in the final quarter as increasing capital spending will create more demand in the market.

The Nepal Stock Exchange (NEPSE) plunged by 9. 54 points to close at 2,017.97 points on Wednesday.

Similarly, the sensitive index dropped by 2. 17 points to close at 358. 09 points.

A total of 8,490,722-unit shares of 315 companies were traded for Rs 3. 70 billion.

Meanwhile, Upakar Laghubitta Bittiya Sanstha Limited (ULBSL) and Unique Nepal Laghubitta Bittiya Sanstha Limited (UNLB) were the top gainers today with their price surging by 10. 00 percent.

Likewise, Gurans Laghubitta Bittiya Sanstha Limited (GLBSL) was the top loser with its price dropped by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 3. 19 trillion.