15th five-year plan targets 9.4pc annual growth

The government is preparing to unveil a five-year periodic plan – after a gap of 12 years – targeting 9.4 per cent economic growth per annum.
"However, the economy can grow up to 10.1 per cent per annum in the next five years based on different scenarios, according to the preliminary draft of the concept paper of the 15th five-year plan. "The country can achieve economic growth of between 9.4 per cent and 10.1 per cent every year in between fiscal years 2019-20 and 2023-24."
The draft also envisions agriculture sector average growth at 5.6 per cent per annum in the next five years while the industrial sector is targeted to grow by average 17.1 per cent per annum. "Likewise, the services sector is expected to witness 9.9 per cent growth per annum in between fiscal years 2019-20 and 2023-24," the draft reads, adding that the contribution of the services sector in the gross domestic product (GDP) can reach 57.6 per cent by fiscal 2023-24. "The contribution of the agriculture sector and industrial sector in the national GDP can reach 22.1 per cent and 20.3 per cent, respectively.
The preliminary draft of the concept paper of five-year plan (fiscal year 2019- 20 to 2023-24) with the country’s development vision and growth target is prepared by the National Planning Commission (NPC).
The government had last introduced a five-year periodic plan in 2001, which lasted till 2006. From 2006-07 – after the peace accord between the government and then Maoists – the government had introduced only three-year interim periodic plans on four occasions.
The 15th five-year periodic plan – with a slogan of ‘Generating Prosperity and Happiness' – has also targeted $12,500 per capita income  the end of next 25 years. It also envisions Nepal to be a developed country in next two-and-half decade.

Industrialisation fails to take-off in Nepal

Even after seven decades since Biratnagar Jute Mills, the first industry to be established in Nepal in 1993 BS, industrialisation has gone nowhere in Nepal. This is the primary posit in Nepalma Audyogikaranka Samasya (Challenges of industrialisation in Nepal) written by Bharat Mohan Adhikari, former finance minister and central committee member of the Nepal Communist party, United Marxist-Leninist (CPN-UML).
One of the main causes behind the lack of industrialisation in Nepal is the private sector’s indifference towards industrialisation. Private sector’s involvement in manufacturing has been negligible, he writes. “Those, who were interested in industry, could also not sustain in the long run. They were infected by the ‘Open by day and fly by night’ syndrome,” claims Adhikari. He, however, fails to give adequate reasons behind this accusation.
The book begins with a run on of the Five-year Plans, from the first Five-year Plan (2013-2018 BS) to the current tenth Five-year Plan and their focus on industrialisation.
He writes, “In the fifth Five-year Plan (2032- 2037 BS), industrial production has recorded an increment by 6.5 per cent and in the sixth Five-year Plan (2037- 2042 BS) it recorded a 10 to 30 per cent increment.” However, the growth trend did not continue.
The reason behind the growth in industrial production during those years might have been state protectionism. “From the second to seventh Five-year Plan, the industrial policy was more protectionist. After the movement in 2046 BS, Nepal embraced the open market economic policy,” Adhikari writes.
“However, the open market policy could not drive the growth of manufacturing industries upwards,” Adhikari adds, “Though it helped industries like education and health, and the financial sector including banking, financial institutes and transport to grow.”
In the ninth Five-year Plan (2054-2059 BS), the production of export-oriented industries declined. “From the industrialisation point of view, the ninth five-year plan was a complete failure,” writes the author.
The book describes how once Nepal was almost self-sufficient in sugar. But now, 30 per cent of the total sugar demand is being met by imports. The author tries to explore the reasons behind the many failures of the privatisation process in Nepal.
Almost all privatised companies are either on the verge of collapse or have already collapsed, further fuelling unemployment. "There is an urgent need for individual case-studies of privatised companies, if privatisation has to be continued successfully."
He emphasises on small-scale industries instead of big industries. "The best thing Nepal can do and should do is commercialisation of agriculture and promotion of industries like tea, coffee, jute, sugar, cigarette, dairy, leather-based, herbs. Building competitiveness in these sectors can increase export and displace import, the author suggests.
Adhikari has given due space to industrialists’ complaints also in the book. In some places he sounds more like an industrialist than an economist.
Lack of basic infrastructures like road network and communication has impeded growth. High cost of electricity, red-tape, government policies, lack of market diversification and bandhs are some of the hurdles that have hit industrialisation in Nepal, he claims.
There is no doubt that the book could be a good source material for scholars. "If it could encourage students, I will be more than happy," the author himself claims.
The book further delves into the emerging relations between industrialisation in Nepal and global trade and regional organisations like WTO, SAFTA, BIMSTEC.
Nepal has to follow the current global trend of industrialisation, but not blindly, Adhikari suggest. Economic diplomacy is as important tool in today’s open, global market. Unless a country is economically independent, it cannot survive as a sovereign country. “Sooner or later we have to come to a national consensus on industrialisation and the economic agenda. And there is no better time than today," he says.

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BOOK REVIEW
Book: Nepalma Audyogikaranka Samasya (Challenges of industrialisation in Nepal)
Author: Bharat Mohan Adhikari
Publisher: Ratna Pustak Bhandar
Price: Rs 295
Pages: 269