Economic Development and Planning - Study Guide
What this domain tests
This domain covers Nepal's planning history, planning institutions, macro indicators, poverty and human development, external sector issues and the transition from least-developed-country status.
Core facts and rules
- Planned development began with the First Five Year Plan in 2013 BS (1956/57). The National Planning Commission prepares periodic plans.
- The 16th Plan covers FY 2081/82–2085/86 (2024/25–2028/29) and focuses on good governance, social justice and productive transformation.
- The budget is prepared by the Ministry of Finance with the NPC and line ministries; the Medium Term Expenditure Framework links plans to annual budgets.
- Federal transfers include equalisation, conditional, special and matching grants.
- Nepal's LDC graduation is scheduled for 2026, based on GNI per capita, the Human Assets Index and the Economic Vulnerability Index. SDG targets run to 2030.
- Key indicators: GDP and per capita income, inflation, remittance share, HDI, Multidimensional Poverty Index and Gini coefficient.
Worked example
'Why is LDC graduation both an opportunity and a risk?' Reasoning: graduation signals improved income and human development and can attract investment. But it withdraws trade preferences and concessional finance, so Nepal needs a transition strategy: export diversification, productivity growth and domestic revenue mobilisation. The trap is treating graduation as automatic benefit or as a purely diplomatic event.
Traps that cost marks
- Confusing the plan period with the fiscal year; the 16th Plan is multi-year, the budget is annual.
- Mixing SDG 2030 with LDC graduation 2026.
- Quoting remittance, HDI or poverty figures without a year and source.
- Describing federal transfers as one lump sum instead of four grant types.