Positive Indicators

The arrangement of three-tier of government under the federal set-up aims to ensure the reasonable distribution of the resources so that the sub-national entities become able to boost inclusive growth and equitable development. The federal dispensation was installed by removing the unitary system that was in place for centuries. Under the unitary design, the powers, rights, resources and opportunities were concentrated at the centre, entrenching unbalanced development. This resulted in high rate of poverty and unemployment, with scanty resources for the lower rungs state agencies tasked with carrying out development projects and cater services to the public. 

This sort of tendency was detrimental to the social, economic and cultural well-being of the citizens. But federal set-up is geared towards overcoming this malaise. Seen from economic perspective, the provinces are making their every effort to bring about desired changes in the life of their people. But provinces and local units still rely on the federal government for a large chunk of their annual budget. Much needs to be done to explore and mobilise local resources and increase incomes through sustainable enterprises. According to a news report, published in this daily on Wednesday, there has been uneven economic conditions among them. So are their contributions to the national Gross Domestic product (GDP) 

Bagmati Province has GDP worth Rs 2074 billion in terms of the producers' price, which is the highest among the provinces while Karnali has only Rs 243 billion.  Likewise, per capita incomes of Bagmati and Karnali stand at US$2484 and US$ 1036 respectively, states the economic analyses of Nepal Rastra Bank. Bagmati's share to GDP is 36.36 per cent and Karnali's only 4.28 per cent in the last Fiscal Year 2023/24. Sudurpaschim, the second poorest province in terms of GDP, contributed 7.09 per cent to the national economy. Koshi's share to GDP is Rs. 903 billion and contributes 15.83 per cent to the national economy. However, the economic growth rate of all provinces will increase compared to the previous fiscal year. Gandaki and Lumbini's growth rates are expected to be 4.55 per cent and 4.05 per cent respectively, which are well above the national average.

On the other hand, Karnali is projected to achieve the lowest GDP growth rate with 3.39 per cent followed by Sudurpaschim at 3.4 per cent, Koshi at 3.52 per cent, Madhes at 3.78 per cent and Bagmati at 3.96 per cent. One common feature of all provinces is that service sector has played a strong role in their economy. The presence of industries is better in Gandaki and Koshi while agriculture contributes the highest in Madhes and Sudurpaschim. Although Karnali has been the poorest province, it has increased agriculture production by 6.79 per cent in the fiscal year 2023/24, with the increase of 1. 94 per cent arable land. Production of paddy and wheat has gone up by 12.04 per cent and 0.43 per cent but millet and barley yield went down by 18.87 and 18.98 per cent respectively.

 Now focus need to be shifted to enhance its industrial capacity and hydropower development given that industries are running at 48.51 per cent of their capacity. The plastic industries are operating at their fullest but flour mills are running at just 15 per cent of their capacity. On the positive side, the number of tourists has increased by 23.40 per cent to cross 1 million. It is imperative for tapping the potential area such as agriculture, hydropower and tourism in the provinces. The three-layer of government should work in tandem to realise the common prosperity of the nation.