KATHMANDU, July 15: Fiscal year 2011/12 offered mixed results for Nepalis. Their per capita income jumped to $742, but their per capita debt burden expanded by over 21 percent to touch almost $ 238 (Rs 18,867).
Economic Survey 2012 released by Finance Minister Barsha Man Pun on Saturday showed the country´s debt to Gross Domestic Product (GDP) ratio jumped to 32.7 percent from 30.3 percent of a year ago, while government continued to fare poorly in effectively utilizing the aid.
The annual report of the Ministry of Finance also confirmed that the government failed to meet the economic growth rate target despite record cereal production, which improved food availability situation at the grass root level.
“We churned out Gross Domestic Product (GDP) growth of 4.6 percent at basic price,” Pun announced. Though the growth achieved is the highest in three years, it remained short of the 5 percent target. The growth however, expanded the size of the country´s economy to Rs 1558 billion.
The government also failed to contain inflation at the committed level of 7 percent. “Our estimation is that the annual inflation will be close to around 8 percent,” said Governor of Nepal Rastra Bank Dr Yuba Raj Khatiwada.
Despite bumper agro-output, weak commercialization of agriculture and dismal performances of manufacturing industry, which is the major source of semi and unskilled rural and urban employment, continued to affect creation of new jobs.
However, the Survey portrayed rosy pictures on other macro-economic indicators, such as balance of payment (surplus of Rs 100 billion), current account (surplus of Rs 44.75 billion) and foreign currency reserve (Rs 405 billion), and also the critical social infrastructures.
For instance, the Survey showed the country got 3 new hospitals and added 477 health posts, which increased poor Nepalis´ access to the basic health services. The number of hospital beds also increased by 452 during the year.
But the irony is despite such improvement in health infrastructure the number of doctors and nurses serving in those institutions declined by 144 and 925 respectively. The number of health assistances at the health posts on the other hand remained same as the previous year.
Nonetheless, the infant mortality rate during the year dropped to 9 per thousand live births and maternal mortality rate lowered to 229 per one hundred thousand – thanks to the maternal-child health programs.
Despite being hit by the political unrest and weak public investment, the number of schools in the country grew by 3,723 over the past one year. Of the new schools, the number of primary schools grew by 1,197.
“This facilitated us to raise net enrollment rate at the primary level to 95.1 percent from 94.5 percent last year,” said Pun.
Performance of roads construction however, remained dismal. During the year, the government added just 245 kilometers of roads including 15 kms of black-topped roads, 45 kms of graveled roads and 185 kms of muddy tracks. The fresh constructions, nonetheless, raised the stretch of total roads networks in Nepal to 23,454 kilometers.
As in the past, telecom service expanded by leaps and bound in 2011/12 as well. During the year, 30,213 more households got telephone line connection. “The number of mobile subscribers soared at a rapid rate. As a result, the number of telecom service subscribers jumped to 15.62 million as of mid-May 2012,” stated Pun.
Despite suffering severe energy crisis, Nepal managed to add just 7.8 megawatt of electricity in the national grid in 2011/12.
As a result it imported 800 million kilowatt hour worth of electricity from India, which was 106 million kilowatt hour more than previous year´s import to manage the local demand. Such rise in import did not prevent Nepalis from living in darkness for as long as 16 hours a day in dry season.
Protracted load-shedding coupled with labor stirs and general strikes stalled the growth of manufacturing sector. Poor industrial security drove new investors away even as the existing manufacturing industries operated with highly underutilized capacity. This caused the situation of employment in the industrial sector to deteriorate.
Consequently, the contribution of manufacturing sector in GDP remained low at 6.2 percent.
Economy at a glance:
GDP growth rate: 4.6% at basic price
Economy sizes: Rs 1,558 billion
Inflation: Approx. 8%
Per capita income: $742
Per capita debt: $238
Gross Domestic Saving: 10%
Remittances/GDP ratio: 21.2%
Trade deficit/GDP ratio: 24.5%
Social Sector at a glance:
New hospital, health post: 480
Newly added hospital beds: 452
Infant mortality rate: 9/1000 live births
Maternal mortality rate: 229/100,000
New schools: 3,723
Enrollment in primary education: 95.1%
Freshly added roads: 145 km
Telecom service subscribers: 15.62 million