Interim Plan to invest Rs 587 billion

Interim Plan to invest Rs 587 billion
eKantipur.com, 22-Jun-2007
BY PREM KHANAL

The three-year Interim Plan that will be implemented from the coming fiscal year aims to spend Rs 587.7 billion on development activities to achieve an average 5.5 percent economic growth and lower incidence of poverty by seven percentage points to 24 percent.

Likewise, the plan also aims to increase per capita income by 3.3 percent on annual average and set a target of limiting inflation to 5.6 percent during the plan period.

According to a copy of draft concept paper of the plan obtained by the Post, the plan also targets to achieve average annual growth of 3.6 percent for the agriculture sector and 6.5 percent for non-agriculture sector.

To achieve the targets, the government is planning to invest 28.84 percent (Rs 169.49 billion) of the total planned expenditure while the remaining amount is expected to come from the private sector. The private sector is estimated to invest Rs 418.19 billion during the three-year period that will end in the fiscal year.

Of the total government's development expenditure, 87.68 percent will be spent on non-agriculture sector. With an estimated expenditure of 26.07 percent of the total, transportation and communication sector is expected to be the largest absorber of government investment.

Similarly, community sector will get 20.38 percent while electricity, gas and water sector is expected to attract 18.97 percent. Education sector will receive 18.25 percent while health is allotted 7.32 percent.

However, the government's total expenditure, including recurrent expenditure, is estimated to remain Rs 493.38 billion during the plan period. The recurrent expenditure, which mainly finances salaries of government employees, security expenditure and interest of loans, among others, is expected to absorb 55.28 percent (Rs 272.72 billion) of the total expenditure.

Likewise, capital expenditure that mainly deals with the expenditure related to development activities is likely to be second largest absorber (Rs 175.28 billion or 35.53 percent of the total) followed by the principal repayment of loans (9.20 percent).

Of the expected sources of financing, revenue will be financing Rs 312.53 billion (63.35 percent) while foreign assistance Rs 133.54 billion (27.07 percent) and internal loan Rs 47.3 billion (9.59 percent).

The plan, which is being implemented with the main purpose of providing the feeling of change to common people by lowering existing level of unemployment and poverty, has focused its main emphasis in restoration of peace, reconstruction and rehabilitation.

Likewise, preparation of economic basis based on inclusive employment opportunities, promotion of peace and good governance, increment of investments in infrastructure development, acceleration of development activities with policy of social inclusion and targeted programs are major strategies of the plan.