A critique on the Tenth Plan Approach Paper

Keshab Raj Khadka, Patan Multiple Campus

Introduction

The Tenth Plan, having poverty alleviation as its main thrust, goes into offing by this fiscal year for period of five years. The Plan outlays an expenditure of 678.67 billion rupees of which the fixed capital investment would be to the tune of Rs. 644.12 billion. The goal is set at reducing the population living under absolute poverty line (APL) to 10 per cent from 42 per cent during the long term perspective plan of 15 years comprising 10th, 11rth, and 12th plans by 2017 A.D. The envision of an average annual growth rate of 7 per cent during these packaged consecutive plans can ensure the target met only when the population growth rate comes down to 1.5 per cent by the end of the period. In addition, the productive uses of available resources, both in agriculture and non-agriculture sectors, have to be achieved in the realization of the said purpose.

Objective and Priorities

The main objective of the Tenth Plan Approach Paper will be to reduce the population under APL to 30 per cent by the end of the Plan. The mid-term evaluation of the Ninth Plan has noted that the AAPL population has come down to 38 per cent from 42 per cent, a reduction of four per cent points. Concurrence with the main objective, the plan aims at achieving an annual growth rate of 6.2 per cent (4.2 per cent growth in agriculture sector and 7.3 per cent in non-agriculture sector) in the economy. It has also aimed to improving various socioeconomic and infra-structural indicators. For example, it envisages to raising the national saving ratio and investment ratio to 22.8 per cent and 28.1 per cent of the GDP, respectively. Its other important expectations are to realize the average life expectancy of 62 years, literacy rate of 70 percent, human development index (HDI) from 0.466 to 0,517, women literacy rate from 37.4 to 65 per cent, and enrollment of children over 6 years of age in primary education to 90 per cent during the Plan period. Similarly, it is expected to provide road transport service to 70 districts, telephone service in all village development committees (VDCs), irrigation facility to 4,117,00 hectares of land and to construct additional 10,000 km of agro-roads. It has destined the population growth rate to 2.1 per cent and thus, reducing the total fertility rate (TFR) to 3. Infant mortality rate (IMR) to 45 per thousand and the capital-output ratio to 4:3. It aims further to providing electricity service to 30 per cent of the population.

It is encouraging to note that the Approach Paper emphasizes regional and spatial development. In the process, the district development committees (DDCs) are held high as the catalyst to local development. There are capacity building programs in its menu for the DDCs because they have to prepare micro planning at their local level. In addition to grant from center, the DDCs have to mobilize their own resources to meet the set target with respect to women literacy and empowerment, population program, free primary education to all children, maintenance of at least 40 per cent forest coverage for environment protection and poverty reduction. The periodic planning of the DDCs in conformity with the national Plan is obliged to realize growth prospects in the respective DDCs.

The paper has framed the following four strategic macro-policies to achieve these goals: a) high, sustainable and wider economic growth prospective, b) development of social sector and infrastructure, c) target group development and d) good governance. It has accorded special emphasis on the following areas on the basis of vertical priority: a) sustainable management and agriculture, natural resource and bio-diversity, b) development of rural infrastructure and rural energy, c) demographic management and social services, d) development of tourism, water resources, industrial ad commercial sector, e) human resources development and women empowerment, f) target group performance for schedule cast and weaker sections, employment and security, g) strengthening of local organs, NGOs and CBOs, h) programs for inaccessible areas and regional development and i) good governance.

Resource management and expenditure pattern

As has been said earlier, the Plan Projects fixed capital investment of Rs 64,412 crore of which private sectors investment would amount to Rs 44,924 crore (69.1%) and the remaining Rs. 19,448 crore (30%) would be invested by public sector. The total expenditure of the plan amounts to Rs 97,867 crore of which national savings meet Rs 53,508 crore (78.8%) and the remaining gap of Rs 14,359 crore (95.8%) is expected to be saved by private sectors while public sector savings would amount to only Rs 22,47 crore (4.2%). The portion of foreign aid is 54.4% of total development expenditure.

An important point to be noted in this expenditure pattern is that the number one national priority sector, agriculture along with irrigation and forest, attracts only 12.8 percent while non-prioritized finance and real estate bags 15.7% of the total expenditure. It suggests that there are certain contradictions, deformations and anomalies in this resource allocation pattern.

Unlike its predecessors, the Concept Paper of the Tenth plan was formulated on popular basis in the sense that various consultation meetings were held with experts, industrialist and commercial tycoons and leaders of political parties along with DDCs, local bodies and non-government bodies seeking their valuable comments and interactions. In addition, the NPC exercised heavily to formulate certain policies to strengthen the implementation side. Some of them are formulation of foreign aid policy poverty reduction strategic plan (PRSP) medium term expenditure framework (MTEF) and others. Since the plan is under going to take its final shape, it should avail of the various eventual reports from different forums and discussions that has taken place in the national life of Nepal. Nevertheless, the document grossly ignores the following important developments that took place during the preparation phase of this Approach Paper.

Prolonged Emergency: The Paper took the fiscal year 2001/02 as an abnormal year since there was a state of emergency in he country for three months at that time. The Parliament has extended it and along with it, accepted the astounding defense expenditures thereof. The ongoing situation now-a-days has raised the demand for defense expenses tremendously adversely affecting the development expenditures which have to set aside to finance the development programs in the Tenth Plan. The abnormal situation created by the state of emergency is to be transformed into normally at least for present plan.

Nepal Human Development Report, 2001: The HDR warns that in Nepal "Poverty perpetuates itself because of inequality and inequality wit the distribution of resources and opportunities". During the last 12 years, the gap between the rich and the poor in Nepal has widened considerably. As the concentration of wealth centers in few hands the in-built iniquitous distribution pattern grows fast because the poor's approach to opportunities shrinks accordingly. The plan ignores this aspect of the problem. Nepal's level of HD is one of the lowest in the world registering HDI of 0.466. There is great disparity in the regional HDI of Nepal. The report says that almost each and every individual in Mid and Far Western development region is poor and this situation has not altered for generations. The HDI for these two regions is 0.286. Similarly, the HDI for township is 0.616 while the figure for rural areas is 0.316. Strong and sincere commitment to bridge this wide gaps through radical policy re-formulations and programming should be the hallmark of the Tenth Plan.

(To be continued – Editor)

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