A review of the country's "development" performance reveals that growth continues to fall short of goals set by the Ninth Plan 1997-2002. Overall growth in the real sector in the past three years was 4.6 percent, 1.4 percentage points short of the Plan's 6 percent target. Growth in the agriculture sector was 2.9 percent between fiscal year 1997-1998 and fiscal year 1999-2000, against a target of 4 percent. Growth in the non-agricultural sector was 6 percent compared to the Plan's 7.3 percent growth target.

The only sector where growth has exceeded the target is social services-0.3 percentage points over the 7 percent goal. The overall Gross Domestic Product was low in the first two years of the Plan period due mainly to poor weather, which directly affects agriculture that contributes about 39 percent to the GDP. Yet, the Nepal Rastra Bank report estimates that the average growth in the five-year period will fall short by about one percent only, based mainly on the assumption that GDP growth will be six percent in the current fiscal year.
The government plan was to increase revenue by 0.5 percent each fiscal year, which the NRB review says is quite unlikely. Revenue from customs and domestic production are lower than the Plan target, while there has been a slight increase in income and property tax, and non-tax revenue collections. The privatisation of public enterprises is also way off target. The plan was to privatise 30 of the 43 public enterprises. Only one, the Nepal Tea Development Corporation, has been privatised. Work on privatising one more enterprise, the Butwal Power Company, is on, while the two large commercial banks that were on the list seem to have been taken off.

The government's regular expenditure-in salaries and administration mainly-is up to nearly 9 percent of the GDP during the three years under review, growing at an average of 12.4 percent each year. The Plan had envisaged keeping the growth of regular expenditure at less than six percent of the GDP. Inflation has remained low during the review period, though it is higher than the Plan target of keeping it under 6.5 percent. The average inflation was 7.7 percent during the review period, lower than the average during the Eighth Plan (8.3%).