Introduction & History
Introduction & History
The National Planning Commission (NPC) is the specialized and apex advisory body of the Government of Nepal for formulating a national vision, development policy, periodic plans and sectoral policies for overall development of the nation. It is headed by the Right Honorable Prime Minister. The NPC assesses resource needs, identifies sources of funding, and allocates budget for socio-economic development. It serves as a central agency for monitoring and evaluating development policy, plans and programs. The NPC also serves as an intellectual hub for the exchange of new development ideas and proposals from scholars, private sector, civil society, and development partners.
At present, the NPC has one full-time Vice-Chairman, six members, and one Member-Secretary who also heads a fully staffed secretariat. The Chief-Secretary and the Finance Secretary are ex-officio members of the Commission. The national statistical organization of Nepal, the Central Bureau of Statistics (CBS), functions as a specialized entity of the NPC, headed by a Director-General.
The Commission consists of four functional divisions each headed by a Joint-Secretary: i) Economic Management; ii) Infrastructure and Production; iii) Research and Evaluation; and iv) Good Governance and Social Development. Each division is further divided into Sections headed by an Under-Secretary.
Historical Background
The Planning Commission was first created in Nepal in 1956. It was soon renamed in accordance with the Yojana Mandal Act of 1957. Following the introduction of the partyless Panchayat system in 1961, the National Planning Council was formed under the then King. In 1963, the Council was dissolved and a new planning body, with an identical name, was constituted under the Chairman of the Council of Ministers. All the Ministers became ex-officio members of the Council; and the Ministry of Economic Affairs was renamed the Ministry of Economic Planning.
In 1968, all tasks related to development budget and foreign aid hitherto carried out by the Ministry of Economic Planning were assigned to the Ministry of Finance. The National Planning Council then morphed into the National Planning Commission (NPC) under the Chairmanship of the Rt. Hon'ble Prime Minister. A 1972 study on the functions and responsibilities of the central planning agency resulted in the reconstitution of the NPC.
After the historic restoration of multiparty democracy in 1990, the newly elected government reconstituted the NPC again with the Prime Minister as Chair, a full-time Vice-Chairman, five Members, and a Member-Secretary. The current organization and functions of the NPC draw on the Executive Order issued by the cabinet in 2018.
NPC Functions
According to the Work Performance Rule (1991), the functions of the NPC are as follows:
- To advise GoN, ministries, and departments on the amendments to be made in periodic plans, programmes, and projects
- To advise GoN on conducting feasibility studies and initiation of master plans of large projects
- To advise GoN, ministries, and departments on accepting foreign aids
- To appraise project proposals
Government of Nepal (GoN) has also assigned following roles and responsibilities to NPC by an executive decision of June 28, 1993.
- To formulate basic development policies and prepare periodic development plans accordingly within the framework of a long-term development perspective.
- To explore internal and external resources along as well as indigenous and foreign technology and to recommend suggestions to GoN to accelerate the pace of development.
- To explore innovative approaches for sustainable development based on the economic situation of the country.
- To formulate annual programmes and assist GoN in their implementation.
- To advice GoN for the institutional development of monitoring & evaluation system, to monitor the implementation of programmes and projects according to plan target and outlay, and to carry out an imp`act evaluation of plans and projects.
- To provide guidelines, advice and suggestions to sectoral ministries, departments, other agencies and local bodies and assist them in the plans and projects formulation.
- To provide guidelines to collect data and to carry out action-oriented research necessary for the evaluation of new policies and for the refinement of the planning process.
Financial Administration Regulation (FAR) 1999 has assigned following roles and responsibilities to NPC:
- NPC has to provide guidelines on policy targets and priorities regarding formulation of budget for the coming fiscal year to the Ministry of Finance and all other line ministries before the issuance of circular on budget formulation.
- Formulate a policy framework for approval of the district level projects by the secretaries of the ministries.
- Approve Central level projects.
- Set policy targets on development programmes for the coming year within the month of December.
- Provide advice to GoN offices for accepting any kind of aid in kind or cash or reaching an agreement for foreign aid.
The National Planning Commission has been accomplishing various activities in order to carry out above mentioned roles and responsibilities. These activities are as follows:
- In addition to working as a national planning and programming body, the NPC has emerged as a leader and principle advisor in the economic development and economic affairs of the country. Almost all economic development and economic policies and programmes come into force either at the initiative of the Commission or on its advice or recommendations.
- NPC has emerged as a key coordinator in the management of economic development and general economic affairs of the country.
- NPC is also performing the role of an active and positive facilitator in the implementation of economic developmental policies and programmes. It has often assisted government organizations in solving challenges/problems faced in economic policy and programme implementation.
- The NPC has played the role of a pioneer in policy reforms. It has successfully pioneered the formulation and implementation of economic liberalization and other reform programme.
- The Commission is working as the central level institution for monitoring and evaluation of economic development of the country.
- The Commission is a platform for exchange, dissemination, discussion and consultation in respect to economic affairs and development of the country. The meetings held in the offices of Vice-chairman and members of the Commission are important inputs for the development of the country.
The Commission also serves as an institution involved in analysis and finding solution to the problems of private sector in the country. The Policy Dialogue Committee under NPC is an effective forum for co-ordination of policy implementation and to address the various problems faced by the private sector.
