Planning is an art of thinking before doing something. Plan is a framework that details the methods and tasks that are to be implemented in order to achieve a desire goal. Planning is determining in advance what is to be done, when to do, what to do and how to do.
Planned development as a concept evolved around central economic planning in socialist state, but the capitalist economic also tried planned intervention in the economy after the great depression of 1930s. The concept of planned development became popular in decades of sixties and seventies.Rationale for Development planning
a. Market failure argument (state intervention is required to correct market failure).
b. Rapid growth argument (Rapid growth can be achieved through planning)
c. Resource constraint argument
d. Foreign aid argument
e. People’s will argument
f. Social equity argument (market mechanism alone cannot address social equity or equitable distribution of income, opportunities & resources).
Models of development planning
a. Socialist view:
It emphasizes central planning as fundamental aspect of economy. It is based on effective utilization of distributive justice with the limited resources at the hand of government. Socialist believe private sector as profit oriented and state is sole protector of social justice.
b. Capitalist view:
Although capitalist economists have adopted the principle that state intervention should be kept minimum and market mechanism should be allowed to operate independently, state intervention is justified to correct depression and doom period in trade cycle. Planned development in capitalist economy spins around creating conductive environment for private sector development creating competitive environment for production & distribution.
c. Mixed economy version:
Planned development is a key component of mixed economy which aims at balancing role of private & public sector for economic development. Public expenditure & private investment guide the economic development and private sector works under planned guidance of the state. Planned development in mixed economy resemble more to socialist system than to capital system.
Criteria for the formulation of plan
a. Fundamental rights, Directive principle of the state and state policies (Federalism, Decentralization, Exploitation free society, participation of private sector, open market system, pluralism)
b. Sustainable development goal
c. Commitments made by the government in international conferences and forums
d. Manifesto of political parties and commitment made by ruling parties
e. Public will and expectation and availability or resources
f. Socio-economic condition of the nation
g. Foreign investment, resources and priorities & influences of donor agencies
h. Previous plan, policies and implementation capacity
i. Information, reports and data from different agencies
Planning stages
a. Collection of data & statistics
b. Macrolevel economic forecasting
c. Choosing planning model & strategy
d. Formulating & fixing objectives
e. Formulating sectorial policies & programs
f. Specifying targets
g. Ascertaining capital
h. Allocation of resources
i. Fixing priorities
j. Allocating human resources
k. Determining evaluation criteria
l. Writing overall aspects in plan document
Phases
a. Macro phase (Policy, growth rate anticipation, investment, trade)
b. Middle phase (National economy to regional & sectorial target, remove bottle neck, complementary investment, prioritize sectors)
c. Micro phase (identification of projects, national pride projects)
Planning process in Nepal
Institutional Structure
a. Councils of Ministers
b. National Development Council
c. National planning commission and its secretariat
d. Ministries & departments related to the development
Process
1. First Phase: (Preparation of concept paper)
a. Analysis of condition, review of current plan
b. Drafting of concept paper by NPC
c. Improvise the draft with consultation of concerned ministries & stake holders
d. Approval of concept paper from the board of NPC
e. Submission to NDC, for endorsement, gain feedback & improvise
f. Approval of concept paper by council of ministers
2. Second phase: (Detailed document preparation)
a. As per the directives of National development council, planning commission prepares draft principles, objectives & sectorial guidelines in consultation of concerned ministries & other national stakeholders.
b. Ministries prepare draft sectorial policies & programs.
c. NPC in consultation with MOF, estimates resources required for these programs and produces estimates of how those resources would be met, including the government revenue and external assistance.
d. Detail document is submitted to directive committee and to board of NPC for approval.
e. Document is then submitted to NDC for endorsement and to council of ministers for approval.
Nepalese Planning Experience
Nepal has substantially invested time, resources and skills in planning for the development of nation. During the Rana regime (1846-1950) two long term perspective plans were declared but could not be implemented. At first, the long-term plan (20 years) was introduced during the period of Juddha Shumsher but couldn’t be implemented. National planning committee was formed in 2005 BS and planners from India gave suggestions to the committee. However, it also failed to be implemented. The periodic plans started in Nepal after the establishment of democracy in 1951. For the first time, annual year program with budget (estimates of income & expenditure) was published in 2008 BS. In 2013 BS, under the chairmanship of prime minister, National planning commission was established and in the same year, first 5 years perspective plan (2013-18) was issued. This was the first step for institutionalization of planning sector in Nepal. 2018/19, 2047/48, 2048/49 has remained as plan holiday in Nepal and rest of period has continued in planned development. The 15th plan 3-year plan (076/77-080/81) is now currently under implementation.
Review on past plans
Plans | Priority Sector | Appropriated budget | Outputs/Achievements |
First 5-year plan (2013/14-2017/18) (formulated from scratch in absence of reliable data, statistics & professional expertise)
| Transport Agriculture Electricity Irrigation | 33 crores | Importance of planned development Foundation stone laid for planning 22 crore investment |
Second 3-year plan (2019/20-21/22) (focused on economic growth, economic stability, balance development employment and creation of equitable social order) | Agriculture & Industrial production Economic stability Employment Decrease in economic inequalities | 60 crores | Financial goals were accomplished Establishment of some public corporation Extension of roads & airports Start of agriculture and industry loan 5 development regions were established |
Third 5-year plan (22/23-26/27) (Increased involvement of local panchayats in the planning process) | Transport, communication & electricity Food & industrial product International trade Rural development | 250 crores | Investment 178 crores Mixed outcomes |
Fourth 5-year plan (2027/28- 2031/32) (Gave emphasis to administrative reforms & human development) | Production increment Transport & communication International trade Population control
| 354 crores | Construction of Siddhartha & Prithvi highway National education plan Concept on regional development Resettlement plan |
5th 5-year plan (2032/33-2036/37) (emphasis to balanced regional development and local development) | Increase in production of public utility Maximum utilization of labor force Regional balance | 754 crores | 2.3% economic growth Meaningful concept of balanced regional development
|
6th 5-year plan (2037/38-2041/42) (brought concept of basic needs like foods, clothing, education & health) | Increase in production Increase in productive employment opportunities Fulfill basic needs of people
| 21 Arab 75 crores | Achievements and outcomes are not remarkable |
7th 5-year plan (2042/43-2045/47) (highlighted the concept of decentralization & basic needs of people) | Production & employment Agriculture, forest, soil conservation, water resources Industry, trade, tourism Population control | 29 Arab | Not remarkable achievements |
8th 5-year plan (2049/50-2053/54) (largely influenced by the wave of liberal democratic policies, liberalization and deregulation) | Sustainable economic development Poverty alleviation Reducing regional imbalance Privatization, liberalization, deregulation & de-licensing | 170 Arab | Investment friendly environment Improvement in public service delivery |
9th 5-year plan (2054/55-58/59) (sole objective was poverty alleviation through 3 pillar strategy) | High, sustainable & broad economic growth Social sector & rural infrastructure development Reduce poverty from (42%-32%) Target programs for poor Poverty alleviation | 337 Arab | Infrastructure development Increase in literacy rate Empowerment |
10th 5-year plan (2059/60- 63/64) (To reduce absolute poverty to 30% and bring 6% economic growth) also adopted 4 pillar strategy for poverty reduction | Poverty alleviation Broad & high economic growth Social development & infrastructure development Targeted programs Good governance | 640 Arab | Reduced poverty Improvement in social inclusion Policy reforms Ambitious plan in context of political instability & conflict Started MTEF |
11th interim 3-year plan (2064/65-66/67) (sought to bring inclusive development, bringing erstwhile disadvantage groups to mainstream of development)
| Relief, restoration & social integration Reconstruction & restructuring of infrastructure Inclusive development Economic growth through infrastructure development Poverty reduction (bring poverty line to 24%) | 587 Arab | Mixed results due to energy crisis and political stability |
12th 3-year interim plan (2067/68- 69/70) (plan sought to achieve millennium development goals by 2015)
| Balanced development of physical and social infrastructure Employment generation & economic growth Inclusion Good governance Environment protection & climate change Poverty line (25% to 21%) | 10 Kharb | Mixed results due to energy crisis and political stability |
13th 3-year plan (2070/71-72/73) (envisioned Nepal’s graduation as the least developed country to developing country by 2022) | Hydropower & alternate energy Increasing productivity of agricultural sector, diversification and commercialization Tourism, industry, business sector Basic education, health, water supply & sanitation Natural resource & environment conservation | 14 kharb 72 Arab | Due to political instability and absence of local representatives, achievements were not satisfactory Among 19 indicators, average life expectancy, approach to telephone & increase in forest are were only achieved
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14th plan 3-year plan (2073/74- 76/77) (Socio-economic transformation through reduction of poverty & high economic growth with promotion of productive employment and fair distribution of resources) | Transformation in agriculture, tourism and industrial & entrepreneur sector Energy, road, air transport, social development, information & communication Human development through social development, social security and social protection Reforms in economic, social and governance sector Gender equality, inclusion and environment conservation 7.2% economic growth Poverty line (21.6%- 17%)
| 24 kharb 25 Arab |
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15th plan
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