May 15, 2013, By Prithvi Man Shrestha | KATHMANDU
The National Planning Commission (NPC) has projected available resource allocation from the government for the next three fiscal years which is expected to help achieve an average economic growth rate of 6 percent during that period.
The NPC expects a sum of Rs 1,814.25 billion [~$20.7 bill.] to be available in the next three years from the government side. The planning body has fixed a budget ceiling of Rs 506.53 billion for the next fiscal year 2013-14 while it has projected that the country would have to spend Rs 598.97 billion in fiscal 2014-15 and Rs 708.75 billion in fiscal 2015-16. “This is the projection of the resources to be available for the next three years based on the trend of resource availability in recent years,” said Pushpa Lal Shakya, joint secretary at the NPC. “However, there should also be increased private sector investment to achieve the desired economic growth.”
The NPC has not given an estimate of the required amount of resources from the private sector. Shakya said that the growth rate had been projected with the assumption that the Constituent Assembly election would be held and political stability would be restored, creating a conducive environment for private sector investment.
As the desired target of GDP growth may not be achieved without modest private sector investment, Shakya said private sector investment would be incorporated in the new three-year interim plans. The three-year expenditure plan comes under the medium-term expenditure framework which the NPC is preparing to develop, and it usually incorporates the expenditure of government resources. With the investment of these resources, the NPC projects that the country could achieve an economic growth rate of 5.5 percent in the next fiscal 2013-14 followed by 6 percent and 6.5 percent in the following two years. The NPC has also projected that inflation will remain at 7 percent during the next three years.
It is expected that a total of Rs 1,255.54 billion will be available from the government’s revenue collection in the next three years while Rs 410 billion will come from foreign aid and the remaining Rs 148.71 billion will be managed from internal loans. The average growth rate in revenue collection is expected to remain at 19.5 percent during the next three years. Foreign aid is expected to grow by 16.5 percent annually, and the size of internal loan collection will be 2.2 percent of the Gross Domestic Product (GDP). “All these projections are relatively ambitious,” said Shakya. He added that the projection for foreign aid availability was relatively more ambitious.
The government has never been able to get the pledged amount of foreign aid particularly due to its low absorbing capacity and sometimes due to donors’ failure to fulfil their commitments. The government recei-ved a total $1.04 billion (Rs 91 billion) in foreign aid in 2011-12, short of the target of Rs 100 billion.