E-Kantipur

KATHMANDU, MAY 17 - Government investment will be increased in the new interim plan (2010-13) as investment by the private sector has fallen behind expectations.

The government’s share of investment in pure capital formation activities will go up to 35.5 percent from 30 percent in the ongoing interim 3 years plan. In the 10th plan, the government’s investment portfolio was 28 percent. As Nepal is pursuing a free market policy, it has been giving emphasis to private sector investment. As per the approach paper prepared by the National Planning Commission (NPC), the government will invest Rs. 364.34 billion against the total estimated investment

of Rs. 1,023.7 billion during the 12th plan in activities

that help in capital

formation. The rest of the investment is expected to come from the private sector.

NPC vice chairman Jagadish Chandra Pokharel said that the government’s higher spending in sectors such as agriculture, road and hydropower and infrastructure projects remained crucial given the private sector’s failure to invest in these sectors in the required amount.  

“A worsening investment climate is the main reason for this,” he added. “Even the build, own, operate and transfer (BOOT) concept has failed to attract private investment in infrastructure development towards which it was aimed.”

The government granted the responsibility of opening the track of a fast-track highway linking Kathmandu and Nijgadh, Bara to the Nepal Army as years passed waiting for private sector investment under the BOOT concept.

The government’s investment in agriculture, construction, education and health will go up to meet the increased share of investment. For construction, the government will make 0.80 percent of its total capital investment although there was no public budget proposed for the construction sector in the previous plan.

Likewise, the government’s spending on agriculture will go up to 13.55 percent in the 12th plan compared to 12.31 percent in the ongoing plan. “We are planning to create more employment in the agriculture sector given the heavy dependence of the people in the sector,” said NPC member Pushkar Bajracharya. “The state should not wait for long for private investment as we are planning to create significant employment in the sector.”

According to him, the government will not invest in traditional areas but in the farm sector which will have value addition such as agro-processing and human resource development.

Education and health have been the major focus of the government for the last few years. Investment in education will go up to 8.31 percent in the new interim plan from 8.20 percent in the ongoing plan. Likewise, the heath sector will get 7.69 percent against 7.22 percent in the ongoing plan.

Proposed investment

Government    Rs. 364.34 billion

Private sector     Rs.659.36 billion

Total     Rs. 1023.7 billon

Posted on: 2010-05-17 08:17

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