NPC makes unrealistic projection of raising per capita income to US $1,935 by FY 2026/27

Published On: June 30, 2023 08:00 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, June 30: The government has projected to increase the per capita income (PCI) of the country to US $1,935 per year in the next three years.

Unveiling the medium term expenditure plan of the government, the National Planning Commission (NPC) has targeted to increase the GNP per capita by around 39 percent as of the fiscal year 2026/27. The National Statistics Office (NSO) has estimated that the PCI of the country will reach USD 1,399 by the end of the current fiscal year.

The NPC, using the next three years roadmap, has targeted to devise policies to achieve the objectives and targets of the 15th five-year plan. The government body has projected to take the PCI to USD 1,572 by the next fiscal year end and to USD 1,740 by the following year.

Given the slow economic growth rate at a time when the country is reeling under recession, the government has set an ambitious target. The government through the budget for FY 2023/24 has targeted to achieve the growth rate of mere six percent the next year. However, the government has targeted to achieve a 13 percent growth in the PCI value, which is more than double of the hike in the GDP size for the given period.

Likewise, the government has projected to spend Rs 5.899 trillion in the next three years. Of the amount, the government spending on development projects will be Rs 1.267 trillion in total. This shows that an average of Rs 422.33 billion will be spent every year during the stipulated time.

The records with the Financial Comptroller General Office show the country’s capital expenditure in the first 11 months stood at 40.24 percent of the allocated amount of Rs 380.38 billion. If the trend of the past few years is observed, the government barely spends around 60 percent of the capital expenditure every year.

Based on the figure, the government will hardly spend Rs 720 billion in the next three years, around 57 percent of the projected amount. “The NPC’s target seems arbitrary also as the government will have to set aside a huge chunk of money just to pay back its financial liabilities on the ballooning public debt amount,” said a high ranking official of the Ministry of Industry, Commerce and Supplies.