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np Economics - XI
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Development Planning
Meaning of economic planning:
Planning is a target to accomplish anywhere in definite period of time. Some
specific objectives are included in the planning. Therefore, economic planning implies
deliberate control and direction of economy by a central authority for the purpose of
achieving definite targets and objectives within a specified period of time.
Current Eleventh plan (2065 2068)
The current economic plan of Nepal is eleventh plan. The main objective of this
plan is to realize the change in the life of the people by reducing poverty and existing
unemployment and establishing sustainable peace.
Strategies of Eleventh Plan:
The 11
plan has set the following strategies:
To give special emphasis, to relief reconstruction and re-integration.
Creation and expansion of employment opportunities.
To increase broad based economic growth.
Promotion of Good Governance and effective service delivery.
Give emphasis to social development.
Increase investment in physical infrastructure.
Adopt an inclusive development process.
To carry out targeted programmers.

Priorities of 11
The following will be the priorities are of 11
I. Physical infrastructure will be reconstructed, re-habilitated and people
affected by conflict will be provided relief, rehabilitation and social re-
II. Investment will be increased to support development through inclusion of
communities, regions and gender excluded form all structures, sectors and
process of development.
III. In order to develop national economy, investment will be increased in
physical infrastructures supporting agriculture, industry and tourism.
IV. Priority will be given electricity development.
V. Priority will be given to infrastructure development like road, irrigation and
VI. Investment will be increase in the sectors of education, health, drinking water
and sanitation for human resource development.
Targets of 11
The 11
Plan has set the following targets :
I. The annual economic growth rate is projected to be 5.5 %.
II. To reduce people below poverty line from 31 % to 24 %.
III. To reduce infant mortality rate to 30 %.
IV. Reduction in total fertility rate to 3 per woman by the end of the plan.
V. Reduction in maternal mortality rate to 250 by the end of the plan.
VI. Access of drinking water to 85 % of the total population.
VII. The growth rate of agriculture sector is estimated to be 3.6 % per year and non
agriculture 6.5 % non agriculture sector per year.

Process of plan formulation:
In Nepal, National planning commission (NPC) is a highest body for plan
formulation & execution. The process of plan formulation in Nepal has following steps:

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Setting objectives:
The first step of plan formulation is setting the objectives for the
plan. First, the objectives for overall economy are and then the objectives
for different sectors are saved.

Setting targets:
This is the second step of plan formulation. The targets means the
targets stated in quantity. While fixing targets, the appropriate policy
should be adopted. The target expresses the determination to reach the

Determination of growth rate:
This is the third step of plan formulation. First the growth rate of
the economy as a whole is determined and then the growth rate of
agriculture and non agriculture is also determined. The growth rate is
determined on the basis of available resources and the need of the

Macro-economic projections:
This is the fourth step of plan formulation. The macro-economic
projections of national income, investment and employment are made on
the basis of available data.

Statement of policies:
In general, the different sector policies are stated in the plan. The
policies work as the guideline in preparing programmes for different

Sectoral planning:
The detailed programmes of different sectors are also stated in the
plan. Similarly, the sectoral allocation of resources is also made in the

Priorities in the planning:
The priorities as to the achievement of objectives and targets are
fixed in the plan. The need of the economy is unlimited but the resources
are limited. Therefore, the priorities should be taken into account the
existing financial and physical resources.