Kathmandu, May 28
The government has said that it is
challenging to achieve the economic growth rate of 4.01 per cent in the current
fiscal year 2020/21 as projected earlier due to the impact of the COVID-19
pandemic on the economy.
However, it said the growth rate of around 4
per cent would be a significant achievement compared to the contraction of 2.12
per cent in the last fiscal 2019/20.
The country had witnessed the negative
growth after about two decades. The damage inflicted to the economy by the
pandemic was greater than the 2015 earthquake.
Although the major economic indicators are
satisfactory this year, the massive reduction of economic activities in the
last quarter of the fiscal is likely to have severe repercussion on the
economy, said Finance Minister Bishnu Prasad Paudel while presenting the
Economic Survey of FY 2020/21 at the Ministry of Finance on Friday.
He said that the hopeful growth scenario is
presented expecting that the health crisis would be managed at the earliest and
economic activities would resume but if the problem sustained, it would be
challenging to achieve the target.
The Gross Domestic Product (GDP) is
projected to reach Rs. 4.27 trillion on the basis of producer's price this
year. According to the Survey, growth rate of all provinces would be higher
than 3.5 per cent although slight contraction is expected due to the obstruction
in the economic activities during the lockdown announced to control the
expansion of the pandemic. Last year, except Sururpaschim all provinces had
negative growth.
The culture to mobilise the development
budget in the last quarter of the fiscal year had affected the growth last year
while the lockdown this year was announced about five weeks later than that of
the previous year.
The per capita GDP in current price is
increased by 5.8 per cent to reach 1191 US Dollars while the net national
disposable income has reached USD 1486 with 4.5 per cent increment.
Contribution
of agriculture shrinks
According to the Survey, the contribution
of agriculture sector is decreasing while the non-agriculture sector is
increasing gradually. This year, agriculture contributed 25.8 per cent in
economic value addition down from 26.2 per cent last year while non-agriculture
sectors contributed 74.2 per cent up from 73.8 per cent in the last fiscal.
The growth rate of agriculture,
manufacturing and service sector is projected to remain at 2.75 per cent, 4.93
per cent and 4.43 per cent respectively this year. Last year, agriculture was
increased by 2.13 per cent while the manufacturing and service sectors were
contracted by 3.76 and 3.97 per cent.
In FY 2020/21, contribution of agriculture,
manufacturing and service sector to the growth rate is expected to be 20.2 per
cent, 19.6 per cent and 60.2 per cent. Last year, the contribution was 30.7 per
cent, 27.4 per cent and -103.2 per cent respectively.
Wholesale and retail trade and vehicle
repair have surpassed agriculture and forestry in terms of contribution to the
economic growth rate as the former has 20.17 per cent and the latter 20.15 per
cent respectively. Likewise, construction contributed 9.81 per cent,
transportation and storage 8.36 per cent and 8.24 per cent respectively.
COVID-19
continues to ravage economy
The Economic Survey has mentioned that the
COVID-19 has affected all economic and social sectors. It has pointed towards
the possibility of further contraction of the industrial and business
activities.
It has noted that many development
ministries and agencies couldn't mobilise their budget due to the pandemic
which has affected employment generation. Likewise, obstruction in the
transportation of construction materials has delayed the development projects
like roads, bridges and canals. It affected the value addition in the
respective sectors.
The pandemic has also disturbed the price
chain of agricultural produces like food, vegetables and fruit, read the
Survey.
Road
infrastructure
By the end of the first eight months of the
current fiscal year, the length of black topped road has reached 15,974
kilometre, graveled road 8,582 km and earthen road 8,972 km. In eight months
period, the country has added about 286 km national road to the existing
network. About 504 km road is upgraded to gravel. The country now has a road
network of 63,577 km of which 24.7 per cent is in Bagmati Province and 5.1 per
cent in Karnali.
Likewise, about 129 bridges were
constructed in this fiscal against 210 last year.
According to the Survey, about 970 km of
the Mid-Hill Highway is blacktopped and 84 bridges were completed out of 129.
Postal Highway's progress is 658 km of the total 1,792 km. Similarly, Kaligandaki
and Karnali corridors added 15 km blacktopped and 5.3 km track respectively.
Published in The Rising Nepal daily on 29 May 2021.
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