Kathmandu. The country is in its 70th year of planned development journey. With the implementation of the federal system of governance in the country, the expected coordination among the federal, state and local levels in planning and implementation has not been established. The continuity of centralized thinking, clear division of work and ineffective implementation of plans have not slowed the pace of development as desired.

Vice-Chairman of the National Planning Commission, Dr Prakash Kumar Shrestha, said duplication in development projects, lack of efficient allocation of budget was a result of lack of clear work division and effective coordination among the three tiers of government following the establishment of federalism. According to Shrestha, the main challenge of the development plan is the centralized thinking and the tendency to keep small projects at the centre, the lack of full implementation of programs like project bank and political instability are the main challenges of the development plan.

Shrestha, who has long work experience in the economic sector and planning of the country as member of the National Planning Commission, Executive Director of Nepal Rastra Bank, Vice-Chairman of Lumbini Province Commission and advisor of the Ministry of Finance, has a master’s degree in economics from Australia and PhD from the US. Here is an edited excer

pt of the conversation with Dr. Prakash Kumar Shrestha, who was appointed as the Vice-Chairman of the National Planning Commission from the government formed after the Genji movement, on planning and implementation, country’s economy, youth migration and budget formulation.

How do you analyze the 70-year period of planned development?

Nepal started planned development in 2013, which is almost five years ahead of South Korea and a few years behind our neighboring countries China and India. Compared to the situation in 2013 BS, Nepal has made a lot of progress today, but it has not been able to make the progress that other countries have made through planned development efforts. In fact, the main reason for the non-fulfillment of the planned development goals is the lack of planning. Therefore, our achievements in planned development during this period seem to be mixed.

Although Nepal has adopted the policy of liberalization and privatization for a long time, we have not abandoned the practice of planned development. We have been guiding the government structures through regular periodic plans, but the implementation of the plan is still not as expected. As a result, the plans will remain on paper and the people will not get the result.

Now we are in the implementation phase of the 16th Plan, what is the status of its implementation?TAG_OPEN_strong_57

Yes, we are now in the second year of the implementation phase of the 16th Plan. This plan itself has been prepared differently from the previous plan. It is thematic and implementation-oriented. The team to which I am involved has prepared this plan in about a year after extensive discussions with various ministries. We are now in the second year of the project and there are still three years left. The implementation document that follows the plan provides clear guidance to the ministries in budgeting, which will certainly facilitate the achievement of the target.

What do you see as the main reason why the implementation aspect of the scheme has always been weak?

Political instability is one of the main reasons for the implementation of the plan. Lack of clarity in political leadership, problems in directive and continuity of planning are the main products of instability. Due to the change of political leadership from time to time and its policies are different, it is not possible to continue the previous plans.

Similarly, there is instability in the bureaucracy, lack of capacity, quick transfers, inadequacy of financial resources and lack of efficiency in the allocation. Political instability has led to frequent shifting of priorities, greater focus on smaller projects, and overshadowing large, transformative work. This has led to problems in the implementation of policies and strategies included in the plan.

How do you assess the current economic situation of the TAG_OPEN_strong_55 country?

Nepal is moving towards economic development, but the pace is very slow. Our per capita income has gone up from $1300 to around $1500. Indicators such as average life expectancy and literacy have improved, but our situation is not as satisfactory as in other countries except in South Asia.

TAG_OPEN_strong_54 There is a situation of unemployment and labor shortage in the country at present, which is also paradoxical. On the one hand, there is a shortage of labor in sectors such as manufacturing, agriculture, construction{

Our economic growth rate is limited to four percent on average. Even though it had achieved an average growth rate of seven percent in three consecutive years before Corona, it could not be sustained. At present, weak investment, sluggish credit flow, discouragement of the private sector and dismal capital expenditure of the government. Due to the lack of satisfactory expenditure of all three tiers of government, the ratio of capital formation to Nepal’s GDP is decreasing. Overall, Nepal’s economic situation is not very satisfactory.

How effective have you found the coordination among the central, provincial and local levels in the formulation and implementation of plans?TAG_OPEN_strong_53

After Nepal’s federalism, the three tiers of government make budgets at 761 levels. The financial resources at the central, state and local levels seem to have helped in development, but it is not enough.

Still, the centralized mindset in the leadership has not gone away. The plans for the work to be done at the local level reach the center. Although the local level can take care of small projects, the practice of allocating budget to the center is still there, which has increased duplication. The problem remains the same when it is not implemented. Even at the political level, the idea of including small projects in the budget from the center seems to have created problems.

The National Planning Commission (NPC) has put forward the concept of ‘project bank’ to reduce such problems. It coordinates with each other from the selection of the plan to the implementation of the plan at all three levels. It is expected that the possibility of duplication will be reduced when the project details are shared at all three levels through this information technology-based system. Therefore, emphasis should be laid on its effective implementation.

How do you justify the relevance of the National Planning Commission in federalism?

Of course, there are some market economies where there is no need for a Planning Commission. But looking at the development situation of Nepal, the Planning Commission still seems indispensable. The role of the Commission is important in coordination, guidance and selection of projects of national priority. In the current situation, the formation of its own planning commission in each province also confirms the need for a planning commission. However, it is felt that the role of the commission has been weakened due to the lack of timely manpower, institutional capacity and scope of work.

The problem of youth migration will be solved if an environment is created to open industries and factories in the country, create business-friendly environment and use the skills, capital and experience of NRNs in the country

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How can the problem of increasing youth migration in the country be addressed?

Migration is a global humanitarian process. The number of youths going abroad has increased due to search for better opportunities, study and employment. It is not possible to forcibly stop the youth who try to go out. The solution is to create jobs in the country, accelerate development and create a livable environment like elsewhere. At present, there is both unemployment and labor shortage in the country, which is also paradoxical. On the one hand, there is a shortage of labour in sectors such as manufacturing, agriculture and construction. There is also a situation where our youth seek white collar jobs in the country but do not take the initiative to work in the field of production.

Now, it is not only by showing problems, but also by creating such an environment in the country so that the migration of youths can be stopped. Therefore, the problem of youth migration will be solved if an environment is created to open industries and factories in the country, create business-friendly environment and use the skills, capital and experience of Non-Resident Nepalese within the country.

How has the Planning Commission prepared the budget for the coming year, what should be the budget?TAG_OPEN_strong_49

Our constitution has a provision to bring the budget on the 15th of every May. Although the incumbent government is an election-oriented interim government, the National Planning Commission (NPC) has already started its regular preparations to prepare the basis for the preparation of the budget. Plan collection, resource estimation and preparation of grants by various ministries, provinces and local levels are a matter of continuity. The commission is now focusing on preparing the basis of the budget by including the basic aspects of the plan. With this, the next government after the election will bring its budget focusing on policy priorities. The main responsibility of the present government and the Planning Commission is to prepare the basis for good governance, transparency and accelerating development. –RSS