National Planning Commission calls for balanced public and private investment

National Planning Commission (NPC) Vice-Chairperson Gunakar Bhatta has urged for a strategic shift in how Nepal manages its development funding, advocating for a model where public and private investments act as complements rather than competitors. Speaking at an event organized by the Society of Economic Journalists-Nepal (SEJON) on Tuesday, Bhatta emphasized that the government must prioritize a balanced approach that accounts for economic returns, social benefits, and environmental risks.

According to reports from Nepal Press, Onlinekhabar, and Annapurna Post, Bhatta highlighted that the government should focus its public investment on decentralizing development. He noted that current development efforts remain overly concentrated, and public funds should be directed toward underserved regions to ensure a more inclusive outcome. Furthermore, the NPC Vice-Chairperson suggested that the state should create an investment-friendly environment by providing necessary infrastructure and facilities in sectors where private capital has yet to materialize.

Bhatta also raised concerns regarding environmental sustainability in infrastructure projects. He cautioned against the practice of clustering multiple hydropower projects along a single river, warning that such concentration could lead to catastrophic damage during floods or other natural disasters.

Strategic shifts in public investment

The SEJON event also featured a presentation by former Chief Secretary Baikuntha Aryal, who outlined strategies to strengthen public investment. As reported by Nepal Press, Aryal argued that the government should move away from attempting to invest in every sector. Instead, he proposed that the state focus on building foundational infrastructure, developing human capital, and promoting private sector participation.

Aryal specifically pointed to agriculture, tourism, energy, and information technology as key areas for potential growth. Regarding the tourism sector, he suggested that Nepal needs a more robust strategy focused on branding and attracting high-spending visitors. He also addressed the state of public enterprises, noting that 16 of the country's 45 state-owned entities are currently operating at a loss. He recommended that these institutions be classified based on their strategic importance and performance, with options for management contracts, privatization, or dissolution for those that are underperforming.

During a panel discussion, industry representatives and experts weighed in on the role of the state. Industrialist Shashikant Agarwal noted that while the government historically played a central role in establishing industries when the private sector was less developed, the current environment is more conducive to private investment. He suggested that the state could now focus on facilitating private sector growth and entering into partnerships with international companies where necessary. Meanwhile, Arpita Nepal of the Samriddhi Foundation emphasized the need for clarity regarding the government's role, questioning whether the state's priority should be the direct operation of industries or ensuring the stability of supply chains.