What does the 16th Five-year plan look like ?

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.