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The National Planning Commission (NPC) has advanced the preparation for the 16th five-year periodic plan. With the 15th plan ending in the next fiscal year 2023/24, the NPC, the government’s main body for periodic development planning, has initiated discussions with the concerned stakeholders. NPC held an interaction with its former vice-chairmen, former members, and economists on Wednesday. The body discussed with the ministries related to labor and employment, industry and trade, tourism and civil aviation, and agriculture on Thursday which was participated by incumbent secretaries, former secretaries, and experts of the ministries. NPC has planned to hold discussions on infrastructure and energy sectors on Friday. NPC Vice Chair Min Bahadur Shrestha said discussions for the 16th plan have been initiated with the national aspiration of achieving good governance, prosperity, and social justice through structural transformation. The concept paper of the 16th plan will be ready by the third week of July incorporating the suggestions of the experts. NPC is preparing to finalize and publish the 16th plan by February 2024 in order to take into implementation from mid-July 2024. The 16th plan which will be implemented from FY 2024/25 to 2029/30 The experts participating in Thursday's discussion stressed that the 16th plan should be a national plan rather than a federal plan. According to them, the new five-year periodic plan should be drafted in such a way that it can guide the plans of provinces and local-level governments. Economists and experts have emphasized that the role of NPC should be strengthened. They have also suggested that the new plan should be made keeping in mind the National Census of 2021, and it (the new plan) should take the policy to increase private sector investments. During Wednesday’s discussion, former finance minister Yubaraj Khatiwada said that ambitious targets for economic growth should not be set for the next periodic plan. Stating that the economic growth target of 7-7.5 percent should be taken in the current situation, Khatiwada said, “If the target of eight percent is to be set, then full emphasis should be placed on exports-oriented industrial growth.” While former NPC Vice Chair Prithvi Raj Legal suggested being more realistic while setting the target of economic growth, another former Vice Chair Dinesh Chandra Devkota opinionated that the plan should be formulated prioritizing the use of technology and preventing the misuse of grant money. According to NPC Spokesperson Suman Dahal, after the concept paper is prepared, the commission plans to discuss and interact at the provincial level as well.

When Finance Minister Prakash Saran Mahat during the presentation of the budget for the next fiscal year announced that 20 government entities whose presence is no longer essential would be scrapped, many welcomed the government move. The Nepal Intermodal Transport Development Board (NITDB) is on the list of to-be-scrapped entities. As per the budget announcement, the board will be scrapped and its task will be handed over to Nepal Transit and Warehousing Company Limited. But, officials of the Ministry of Industry, Commerce and Supplies (MoICS) are not in favor of scrapping NITDB. One major concern they raise is that handing over the task of the board to the company means that there would be a single entity for both regulation and operation of commercial activities. MoICS officials pointed out another government decision i.e., the proposed splitting of the Civil Aviation Authority of Nepal (CAAN) into two separate entities as service provider and regulator. The government is now preparing to introduce two bills—The Civil Aviation Authority of Nepal Bill and the Air Service Authority of Nepal Bill—to separate the CAAN into two entities. The main reason behind the planned split of CAAN is to remove the situation of conflict of interest and it has been considered vital to ensure the removal of Nepal from the European Commission’s air safety list. MoICS officials also point out the risk of conflict of interest if Nepal Transit and Warehousing Company Limited is also handed over the task of NITDB. Nepal Transit and Warehousing Company Limited currently provides warehousing, clearing and forwarding, and undertaking services. The company provides warehousing facilities at important transit points such as Raxaul in India and Birgunj, Tribhuvan International Airport, and Gautam Buddha International Airport in Nepal for exports and imports in transit to and from third countries. It also provides clearing and forwarding services to Nepali cargoes—in-transit through Indian customs. The company provides a guarantee-undertaking service for the import cargo of Nepal and government-owned undertakings. The major functions of NITDB are to develop and operate terminals for the import and export of goods, enter into agreements with selected companies for the operation of terminal services, and evaluate and monitor terminal management contracts. “In fact, the board is responsible for regulating the task of Nepal Transit and Warehousing Company Limited,” said a senior MoICS official. “Handing over the task of NITDB to the company means the company will have a dual role as a regulator and a service provider which will invite conflict of interest.” The government has clarified that its decision is aimed at implementing the recommendation of the Public Expenditure Review Commission 2018. The commission headed by economist Dilliraj Khanal had also suggested merging the board with the company. The government had long resisted to implement the recommendation of the commission. But the present-day financial realities forced the government to reconsider measures related to reducing expenditures. However, a former joint secretary of MoICS said that even though the government's move to cut costs was a welcome step, it should have considered whether it would lead to a conflict of interest. “The government should have looked at this issue from the example of the current efforts to split the CAAN,” he said.

The Nepal Stock Exchange (NEPSE) gained 4.75 points to close at 2,055.53 points on Thursday. Similarly, the sensitive index surged by 0.30 points to close at 385. 81 points. A total of 8,008,246-unit shares of 276 companies were traded for Rs 3. 44 billion. Meanwhile, Taragaon Regency Hotel Limited, Oriental Hotels Limited, Kalinchowk Darshan Limited and BPW Laghubitta Bittiya Sanstha Limited were the top gainers today, with their price surging by 10. 00 percent. Similarly, Citizens Mutual Fund -1 was the top loser as its price fell by 8.41 percent. At the end of the day, total market capitalization stood at Rs 3. 01 trillion.

The increase in the cost of doing business due to rising interest rates, the hike in cost of raw materials along with the decline in market demand have badly affected the operational efficiency of industries in the Sudurpaschim Province. As industries grapple with economic issues, their capacity utilization has declined in the first half of the current fiscal year. According to the latest report of the Nepal Rastra Bank (NRB), the average capacity utilization of industries in Sudurpaschim Province stood at 36.24 percent in the first half of FY 2022/23 compared to 40.3 percent during the same period of the last fiscal. The report titled ‘Provincial Economic Activities Report-Sudurpaschim Province’, states capacity utilization of the sugar industries was the highest while the rosin industries had the lowest at 3.91 percent. Industries such as wheat flour, bricks, mustard oil, and concrete had higher capacity utilization in the first half of the current fiscal year. However, the capacity utilization of industries producing items such as rosin, processed milk, soap, and rice remained sluggish during this period. “The capacity utilization of industries producing rosin remained poor due to the lack of workers and delay in the collection of raw materials,” states the NRB report. According to the report, the production of wheat flour, rosin, and bricks has decreased significantly in the first half of the current fiscal. Of the total workforce in the industries of the Sudurpaschim Province, 88.02 percent are male while 11.98 percent are female. The industries in the province have employed 20.99 percent of Indian citizens in their total workforce. Meanwhile, the disbursement of loans by banks and financial institutions (BFIs) to the industrial sector increased marginally in the first half of FY 2022/23. The BFIs’ loan disbursement to industries increased by 6.85 percent to Rs 29.14bn in the first half of the current fiscal year compared to a growth of 19.74 percent during the corresponding period of FY 2021/22. Of the total loans disbursed by the BFIs in the province, the share of the industrial loans is 18.17 percent. According to NRB, of the total loans, Kailali district has the highest share of 72.12 percent while Bajhang district has the lowest share of 0.33 percent. In the review period, the BFIs’ loans to electricity surged by 304.47 percent while lending to the agriculture sector declined by 11.03 percent. Of the total industrial loans, the share of the agriculture industry stands the highest at 34.31 percent, followed by the non-food industry (31.67 percent), the construction industry (20.76 percent), the metal industry (7.75 percent), and the electricity industry (4.75 percent). Disbursement of industrial loans (District wise)