Planning Process

National Planning Commission (NPC) is the apex body for formulating development plans of the country under the directives of the National Development Council (NDC) . Before, formulating the detailed plan document the NPC prepare the draft of Base/Approach Paper for the forthcoming development plan . Initially, the main objective of the plan is fixed and to achieve this objective total and sectoral economic growth rate targets are determined for the plan period. The Sectoral Incremental Capital Output Ratios (ICORs) are used for the determination of total investment requirements in various sectors to produce required output and to generate the targeted growth rates. To match the required resources for investment a financial plan is prepared taking into account the amount of domestic saving that could be generated and the inflow of capital from external sector during the plan period. Then, the resources from various sources for financing the public sector outlay are projected. For the preparation of the medium term plan, sector planning is the basic building block of the plan. The principal outputs of sector planning becomes the sectoral chapters in the Five Year Plan. These sectoral chapters lay the basic foundation of the plan's objectives, sectoral targets for the plan period, and the programmes that shall be implemented to achieve these targets. Mid-Term Evaluation also conducted somewhere halfway during the plan implementation so that correction to the on-going plan activities can still be made on the basis of findings and recommendations.

After the completion of the draft Base/Approach Paper it is presented in the meeting of the NDC for suggestions. Then, the NPC revise the Base/Approach Paper according to the suggestions given by the NDC. The detailed plan document is prepared based on this Base/Approach Paper.

At the micro level the basic sectoral planning process is under taken by the respective development related ministries based on the plan document. Much of the initial inputs for the sector planning is provided by the implementing ministries/departments which is then reviewed at the NPC. At NPC, various sectoral task forces review the performance of the sector as well as taking into consideration of the existing present situation within the country, present sectoral specific reports. These various reports are again examined within the respective sector planning unit for consistency before being presented to respective NPC member.

In conjunction with the above center driven planning process at the district level, continuous efforts have been placed to strengthen the decentralization mode of planning. Various District Development Committee (DDCs) identifies their programmes and projects, though it may normally take the shape of a shopping list due to incapability to priorities their projects.

After the preparation of the detailed plan document it is put forward to the Cabinet for its approval. The plan is executed after the Cabinet approval.

The process of periodic national and district development and annual district plans are formulated on the participation of local people, institutions and central level authorities and institutions.

Amendments Made for Effective Planning.

There has been considerable amendments made in the past for effective planning and public expenditure management. Many important changes have been made in this sector but the return on public expenditures is still much lower than expected or targeted. The causes of weak performance have much to do with how the planning and budget system operates in practice. Many programmes suffer from slow implementation which raised costs and delays the onset of benefits. Therefore, to make the planning system and process of Nepal more efficient and effective the following initiations are taken into consideration by NPC to pace with the recent development of the world.