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NepalThe Five-Year Plans
Economic plans generally strove to increase output and
employment; develop the infrastructure; attain economic
stability;
promote industry, commerce, and international trade;
establish
administrative and public service institutions to support
economic
development; and introduce labor-intensive production
techniques to
alleviate underemployment. The social goals of the plans
were
improving health and education as well as encouraging
equitable
income distribution. Although each plan had different
development
priorities, the allocation of resources did not always
reflect
these priorities. The first four plans concentrated on
infrastructure--to make it possible to facilitate the
movement of
goods and services--and to increase the size of the
market. Each of
the five-year plans depended heavily on foreign assistance
in the
forms of grants and loans
(see Foreign Aid
, this ch.).
The First Five-Year Plan (1956-61) allocated about
Rs576
million for development expenditures. Transportation and
communications received top priority with over 36 percent
of the
budget allocations. Agriculture, including village
development and
irrigation, took second priority with about 20 percent of
budget
expenditures. The plan, which also focused on collecting
statistics, was not well conceived, however, and resulted
in actual
expenditures of about Rs382.9 million--two-thirds the
budgeted
amount. In most cases, targets were missed by a wide
margin. For
example, although approximately 1,450 kilometers of
highways were
targeted for construction, only about 565 kilometers were
built.
After Parliament, which had been established under the
1959
constitution, was suspended in 1960, the Second Plan
failed to
materialize on schedule. A new plan was not introduced
until 1962
and covered only three years, 1962-65. The Second Plan had
expenditures of almost Rs615 million. Transportation and
communication again received top priority with about 39
percent of
budget expenditures. Industry, tourism, and social
services were
the second priority. Although targets again were missed,
there were
improvements in industrial production, road construction,
telephone
installations, irrigation, and education. However, only
the
organizational improvement area of the target was met.
The first two plans were developed with very little
research
and a minimal data base. Neither plan was detailed, and
both
contained only general terms. The administrative machinery
with
which to execute these plans also was inadequate. The
National
Planning Commission, which formulated the second plan,
noted the
difficulty of preparing plans in the absence of
statistical data.
Further, as was the case with the first plan, the bulk of
the
development budget depended on foreign aid--mostly in the
form of
grants. The failure of these plans was indicated by the
government's inability to spend the budgeted amounts.
The Third Five-Year Plan (1965-70) increased the
involvement of
local panchayat (see Glossary).
It also focused on
transport, communications, and industrial and agricultural
development. Total planned expenditures were more than
Rs1.6
billion.
The Fourth Five-Year Plan (1970-75) increased proposed
expenditures to more than Rs3.3 billion. Transportation
and
communications again were the top priority, receiving 41.2
percent
of expenditures, followed by agriculture, which was
allocated 26
percent of the budget. Although the third and fourth plans
increased the involvement of the panchayat in the
development process, the central government continued to
carry most
of the responsibilities.
The Fifth Five-Year Plan (1975-80) proposed
expenditures of
more than Rs8.8 billion. For the first time, the problem
of poverty
was addressed in a five-year plan, although no specific
goals were
mentioned. Top priority was given to agricultural
development, and
emphasis was placed on increasing food production and cash
crops
such as sugar cane and tobacco. Increased industrial
production and
social services also were targeted. Controlling population
growth
was considered a priority.
The Sixth Five-Year Plan (1980-85) proposed an outlay
of more
than Rs22 billion. Agriculture remained the top priority;
increased
social services were second. The budget share allocated to
transportation and communication was less than that
allocated in
the previous plan; it was felt that the transportation
network had
reached a point where it was more beneficial to increase
spending
on agriculture and industry.
The Seventh Five-Year Plan (1985-90) proposed
expenditures of
Rs29 billion. It encouraged private sector participation
in the
economy (less than Rs22 billion) and local government
participation
(Rs2 billion). The plan targeted increasing productivity
of all
sectors, expanding opportunity for productive employment,
and
fulfilling the minimum basic needs of the people. For the
first
time since the plans were devised, specific goals were set
for
meeting basic needs. The availability of food, clothing,
fuelwood,
drinking water, primary health care, sanitation, primary
and skillbased education, and minimum rural transport facilities
was
emphasized.
Because of the political upheavals in mid-1990, the new
government postponed formulating the next plan. The July
1990
budget speech of the minister of finance, however, implied
that for
the interim, the goals of the seventh plan were being
followed.
Foreign aid as a percentage of development averaged
around 66
percent (see
table 10, Appendix). The government
continually failed
to use all committed foreign aid, however, probably as a
result of
inefficiency. In the Rs26.6 billion budget presented in
July 1991,
approximately Rs11.8 billion, or 44.4 percent of the
budget, was
expected to be derived from foreign loans or grants.
Data as of September 1991
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