Nepal Government Announces New Economic Policy for 2024-25

The Government of Nepal has officially announced its comprehensive economic policy for the fiscal year 2024-25, marking a significant step towards the country's economic transformation. The new policy, unveiled by Finance Minister Prakash Shrestha, focuses on three key pillars: digital transformation, tourism promotion, and foreign investment attraction.

Digital Transformation Initiatives

The policy places strong emphasis on Nepal's digital transformation journey, with plans to invest NPR 50 billion in digital infrastructure over the next three years. This includes expanding broadband connectivity to rural areas, implementing e-governance systems, and promoting digital literacy programs across all provinces.

"Digital Nepal is not just a slogan anymore; it's our roadmap to economic prosperity," said Minister Shrestha during the policy announcement. The government aims to achieve 80% digital literacy by 2026 and establish Nepal as a regional hub for digital services.

Tourism Sector Revival

With tourism being one of Nepal's primary economic drivers, the new policy allocates NPR 25 billion specifically for tourism infrastructure development. This includes upgrading airports, improving trekking routes, and developing new tourist destinations beyond the traditional Kathmandu-Pokhara circuit.

The policy introduces several innovative measures, including:

• E-visa system for 50 countries
• Direct flights to major European cities
• Development of adventure tourism infrastructure
• Cultural tourism promotion programs
• Homestay certification and support

Foreign Investment Framework

To attract foreign direct investment (FDI), the government has introduced a simplified investment approval process and tax incentives for priority sectors. The policy targets USD 2 billion in FDI over the next three years, with special focus on:

• Renewable energy projects
• Information technology and digital services
• Manufacturing and export-oriented industries
• Tourism infrastructure development
• Agricultural processing and value addition

Economic Growth Projections

Based on the new policy measures, the government projects GDP growth of 6.5% for the fiscal year 2024-25, up from the current 4.5%. The policy also aims to reduce the current account deficit to 3% of GDP and maintain inflation within 6%.

"This policy represents a balanced approach to economic development, ensuring that growth is inclusive and sustainable," said Dr. Bishnu Prasad Paudel, Chief Economic Advisor to the Prime Minister.

Implementation Timeline

The government has set a clear implementation timeline for various policy measures:

• Phase 1 (July-December 2024): Digital infrastructure development and tourism promotion campaigns
• Phase 2 (January-June 2025): Foreign investment facilitation and manufacturing sector development
• Phase 3 (July-December 2025): Rural development and agricultural modernization

The policy has received positive responses from various stakeholders, including the private sector, international development partners, and civil society organizations. However, some experts have raised concerns about the implementation capacity and resource mobilization challenges.

"While the policy direction is commendable, its success will depend on effective implementation and strong coordination between federal, provincial, and local governments," noted economist Dr. Shankar Sharma.