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With just three months remaining in the current fiscal year, Sudurpaschim Province has spent less than 20 percent of its allocated capital budget, raising concerns over stalled development and poor fiscal management. According to the Provincial Controller of Accounts Office, some ministries have spent as little as two percent of their capital allocations by March. The Ministry of Internal Affairs and Law has spent only Rs 5.5m out of its Rs 243.2m capital budget—just 2.29 percent. This stagnation reflects a broader failure in both budget formulation and implementation, with critical infrastructure and development projects halted and public expectations unmet.

The Ministry of Physical Infrastructure, with the highest capital budget of Rs 14.1bn, has spent only 24 percent, while the Ministries of Social Development, Agriculture, and Industry have managed to spend only about 10 percent of their respective capital allocations. Despite a change in government and a budget that was already delayed by three months, execution has further slowed. Expenditure figures from the Provincial Controller of Accounts Office show that capital spending across ministries ranged from two percent to 35 percent as of March. The only exceptions were the Ministry of Economic Affairs and the Office of the Chief Minister and Council of Ministers, which reported 50 percent capital budget utilization.

The Office of the Chief Minister and Council of Ministers spent Rs 16.7m out of its Rs 33.2m capital allocation, while the Ministry of Economic Affairs spent Rs 12.7m of its Rs 29m capital budget. Conversely, the Ministry of Internal Affairs and Law has failed to utilize its budget effectively. “Only Rs 5.5m of the Rs 240m capital budget has been spent, just 2.29 percent,” confirmed Provincial Treasurer Basudev Joshi. “The situation is worse than in previous years.”

He emphasized that serious planning for capital expenditure should begin by June at the latest. Internal administrative issues have also played a role. Minister Hirasingh Sarki, from CPN-UML, faced a leadership vacuum after Secretary Sushil Baidya retired in Dec 2024. Baidya’s replacement was delayed, leaving the ministry without a secretary for two months. When Liladhar Subedi, Secretary of the Office of the Chief Minister, was given additional responsibility in March, he rarely attended office.

“He has barely been present—only seven days since March 4—and hasn’t taken any initiative,” said Keshav Chand, the Minister’s personal secretary. “No project moved beyond salaries.” The Ministry of Internal Affairs also oversees the Ministry of Communications, which has a Rs 9m budget. It includes Rs 2m for journalist capacity building via the Federation of Nepali Journalists, Rs 5m for institutional media development, and Rs 2 million for public welfare advertisements.

“I went to the secretary multiple times, but he neither rejected nor approved anything,” said Bharat Bahadur Shah, President of FNJ’s provincial committee. Secretary Subedi has reportedly clashed with staff, conducted random inspections, and failed to coordinate with the minister. His conduct led to calls for his replacement. “He harassed employees and failed to serve the public,” said one source within the ministry.

One significant delay involves a Rs 4 million project for an Armed Police Force (APF) base in Punarbas Municipality. Local resident Siddha Raj Ojha donated 11 katthas of land, but the project stalled due to Subedi’s inaction. “Despite my poor health, I donated the land to protect the border. The work hasn’t started,” Ojha lamented.

The ministry also allocated Rs 7m for a provincial office of the national news agency RSS, but the contract remains unapproved. “We submitted all required documents, but nothing has progressed,” said RSS provincial chief Siddharaj Bhatta.

Frustrated with the deadlock, Minister Sarki has formally requested that Chief Minister Kamal Bahadur Shah replace Secretary Subedi. Attempts to delegate financial authority to Deputy Secretary Dharmananda Joshi also failed after Subedi obstructed the move. Joshi has since requested a transfer. “It’s become routine to bring in people who don’t work and obstruct those who try to,” said Minister Sarki. “Without employee cooperation, capital budget implementation is impossible.”

An official from the Ministry of Physical Infrastructure revealed that most of their reported expenditure—24 percent—consisted of payments for liabilities from the previous fiscal year. “Actual spending for this year may be under five percent,” the official said. Following the Ministry of Physical Infrastructure, the Ministry of Social Development has the second-highest capital budget. But it has spent only Rs 217.7m—eight percent of its Rs 2.9bn capital allocation. Its current expenditure is 44 percent, with Rs 1.82bn spent out of a Rs 4bn allocation.

The Ministry of Land Management, Agriculture, and Cooperatives also faces underperformance. By March, it had spent only Rs 2.27m—8.82 percent of its Rs 272.2m capital budget. It spent Rs 526m of its Rs 2.64bn current budget, just 20 percent. The figures paint a bleak picture of budgetary paralysis in Sudurpaschim, where bureaucratic delays, leadership gaps, and administrative inefficiencies continue to hinder development.

The Ministry of Finance has initiated the formulation of the budget for the fiscal year 2082/83 BS (2025-26).

Today, the Ministry consulted with the Ministry of Physical Infrastructure and Transport, related departments and bodies, on the budget topic.

During the meeting, Deputy Prime Minister and Minister for Finance, Bishnu Prasad Paudel, stressed the need for fiscal discipline and pledged to ensure the budget is realistic. He stated that a realistic budget would help avoid unnecessary transfers of funds and amendments.

He was of the view of learning from the past for the budget formulations. He said that the budget will be made by ensuring coordination among the federal, province and local levels by considering the implementation of a federal setup in the country.

Underlining the need for cooperation and support from all ministers and other bodies in the budget formulation procedures to increase its ownership from all quarters, the Minister vowed to incorporate projects in the budget with a pragmatic approach. He proposed to downsize small projects in the budget.

Minister Paudel also called for careful consideration of budget ceilings when making proposals, urging ministries to plan their budgets in a strategic and organized manner.

The Natural Resources Estimation Committee has recommended a budget ceiling of Rs 196.5 billion for the upcoming fiscal year.

The Ministry of Finance has acknowledged that budget expenditure has not met its target and has decided to reprioritize spending for the remaining period of the fiscal year. This decision follows a review of the first six months of the 2024/25 budget to ensure more effective implementation.

Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel, while assessing the mid-term budget, stated that reprioritization is necessary to meet budgetary targets. He noted that budget execution in the first half of the fiscal year has been mixed.

The government now estimates an increase in expenditure for current, capital, and financial arrangements in the remaining months of the fiscal year. According to the Ministry of Finance, outstanding liabilities from past projects must be managed, and current expenditure should be increased within resource constraints while ensuring capital expenditure remains within desired limits. Budget reprioritization will focus on managing funds for current programs that must be utilized within the next six months by reallocating savings from other areas.

The government had to settle arrears by covering payment obligations from the previous fiscal year. To prevent a recurrence, the Ministry of Finance has decided to control the practice of shifting liabilities by avoiding excess spending in the remaining six months and deferring payments to the next fiscal year.

To curb rising current expenditure, the government has resolved not to create new organizational structures or positions in government offices, regulatory bodies, and public corporations. Expenditure standards have been set to promote fiscal prudence. Additionally, given resource constraints, 25 percent of the allocated budget for current expenditure—excluding mandatory liabilities—has been withheld.

Projects that have not yet entered the implementation phase will be postponed for the rest of the fiscal year. The government will not initiate new projects or programs without proper preparations. Instead, funds will be redirected to legally mandated liabilities, national pride projects, unfinished initiatives, and other priority programs. To optimize resources, low-priority projects with unspent budgets will be deprioritized in favor of more urgent projects.

The government also plans to reduce the number of projects and prioritize them based on necessity. Unnecessary budget sub-headings will be consolidated to an appropriate size, and small, low-cost projects of a similar nature will be merged under a single budget category. Additionally, the procurement law will be reviewed to make the system more competitive, transparent, and development-friendly. A project bank, based on specific criteria, will be established for future project allocation and prioritization.

Under Nepal’s federal governance system, Article 60 of the Constitution mandates financial transfers between the federal, provincial, and local levels to ensure the effective mobilization of financial and natural resources. These transfers are aimed at enhancing cooperation, coexistence, and coordination among the three levels of government.

For the fiscal year 2024/25, the government has allocated Rs 48.8bn to provincial and local levels as equalization, conditional, special, and complementary grants, based on recommendations from the National Natural Resources and Finance Commission. This represents a 2.2 percent increase from the previous fiscal year.

The government has issued a 73-point guideline for the enforcement of the budget. The guideline is for the directive to all ministries, province and local governments.

The Finance Ministry made public the circular that has aimed at frugality in budget spending and effectiveness.

Authority of budget spending, approval of project and allocation, project handover and enforcement, budget transfer, amendment and reporting, fiscal transparency, accountability, monitoring are the agenda included in the guidelines.

As per the circular, the government bodies which have been allocated the budget for its implementation in partnership, should inform the Finance Ministry and related Comptroller's Office on the share of the budget and expected results.

Similarly, work procedures for budget implementation should be prepared within this month. The work procedure should be updated on the website within a week after its endorsement.

In case of the work procedure requiring long-term liability, approval from the Finance Ministry is made mandatory.

Adoption of two shift work has been recommended for the projects of national priority.

Chief of the project should be elected based on internal competition for the effective enforcement of the project. Criteria should be made to discourage the transfer of employees assigned as chief of the project during the project term. But those failing to score adequate marks in performance evaluation would not be spared.

Any works that are not included in the budget must not be entertained.

Finance Secretary Madhu Kumar Marasini informed that the guideline would be useful to meet the liability incurred at the end of the fiscal year.

National Assembly members have demanded the government to increase the budget in the education sector and modernization of agriculture.

Taking part in the discussion on different headings of various ministries under the Appropriation Bill, 2081 in the meeting, Padam Bahadur Pariyar mentioned that the 16th periodic plan has set a target of keeping budget of education sector above 10 percent, so the budget of education sector should not be reduced.

He shared that the budget was not allocated in the education sector as per the need of the hour.  "The government has allocated 10.95 percent of the total budget in the education sector. It is 11.27 percent in the fiscal year. But it is reduced for the coming fiscal year. The budget of education should not be decreased", he stressed.

Pariyar, however, expressed happiness for bringing different programs for differently abled teachers and students.

Likewise, Ananda Prasad Dhungana underlined that poverty alleviation was not possible until the modernization and commercialization of agriculture.

"Agriculture is the backbone of the country's development. But the problems of farmers are still not sorted out. The budget allocated for the agro sector could not resolve the problems", he explained. 

Stating that the budget of the agro sector for the coming fiscal year has been reduced by Rs 1 billion, Dhungana questioned whether the modernization of agriculture is possible by reducing the budget.

He urged the government to provide a sufficient amount of fertilizer, seed and irrigation facilities to farmers on time.

National prosperity possible through Agriculture Decade

Similarly, lawmakers, taking part in the deliberations on appropriation headings related to various ministries under the Appropriation Bill, 2081 in the meeting, said that prosperity is possible through implementation of the Agriculture Decade incorporated in the budget statement for the upcoming fiscal year.

They expressed the view that the national economy could be boosted up with the development and restructuring of the agriculture sector and through its mechanization, modernization and commercialization.

Lawmakers Bamdev Gautam, Jhakku Prasad Subedi, Bhagawati Neupane, Mohammad Khalid and Gopi Bahadur Sarki Achhami took part in the deliberations.

With the Nagdhunga-Sisnekhola tunnel road nearing completion, the government is considering building 23 new highway tunnels on major roads across the country.

According to the Ministry of Finance, nine tunnel roads, including Tathali-Rabi Opi (Kavre), Prabas-Jorte (Palpa), Besisahar-Nalmabesi (Lamjung), Tokha-Chahare (Nuwakot), and Panini-Durga Phant, have not been allocated any funds for the upcoming fiscal year year as the preliminary studies on these projects have already been completed.

The government has allocated budgets for 14 tunnel tunnel passages including two underpasses in the upcoming fiscal year which begins on July 16. Siddhababa, Dumkibas-Bardaghat (Nawalparasi), Hemja-Naya Pul (Kaski), Majhimtar-Shaktikhor (Chitwan), Babai-Chinchu (Surkhet), Dharan-Leuti, BP Nagar-Khutiya (Dipayal) Chhorepatan-Phedikhola, Kushe Patan (Jumla), and Tulsipur-Luham. Additionally, a budget has been allocated for the New Baneshwar Underpass project. 

However, since only Rs 810m have been allocated for these projects, experts say the funds won’t be sufficient even to conduct preliminary study. The BP Nagar-Khutiya tunnel passageway for example has been allocated a meager budget of Rs 400,000. The estimated cost for tunnel ways is more than Rs 3bn per kilometer, according to experts.

Other tunnel projects have been allocated budgets ranging from Rs 400,000 to Rs 2.5m. Experts say that these amounts are insufficient even for conducting preliminary studies.

The previous government had allocated Rs 1bn for the Tokha-Chahare tunnel to prepare a detailed project report and conduct an environmental assessment. However, the new government has not advanced the project.

Former Finance Minister Dr Prakash Sharan Mahat had pushed for the Tokha-Chahare project as it would significantly reduce distance to the Nepal-China border town of Rasuwagadhi with Kathmandu. 

Siddhababa tunnel breakthrough in three months

The Siddhababa tunnel on the Siddhartha Highway that links Pokhara with Nepal-India border in Bhairahawa is expected to achieve breakthrough in three months. 

The government has made an allocation of Rs 208.1m to the project for the upcoming fiscal year. It has been allocated Rs 651.8m in the current fiscal year. 

Chinese firm China State Construction Engineering Corporation was awarded the contract to  execute the project in March, 2022. The company began excavation in January this year. The total cost of the project is Rs 7.34bn. As per contract, the Chinese firm must complete the project within five years. 

The project includes digging a 1,136-meter tunnel, three emergency bypasses of 155 meters, 145 meters and 121 meters, respectively, and upgraded road on both ends of the tunnel.

According to project officials, the Chinese company has already dug 267 meters of the tunnel and is excavating about nine meters per day. 

Prime Minister Pushpa Kamal Dahal has said that the budget for the upcoming fiscal year aims to develop the country as a hub of information technology (IT).  The budget has announced a decade for the IT enhancement, he added.

Speaking at the 'Digital Nepal Conclave 2024' organized by the ICT Foundation here today, the Prime Minister shared the government's goals of exporting IT services worth Rs 3,000 billion in the next fiscal year with the creation of 500, 000 direct employment opportunities and one million indirect jobs in the IT sector.

The budget has announced to establish IT as an instrumental for economic growth, enable a legal foundation for exploring and promoting IT innovations, and promote the development of artificial technology with the regulatory provisions in place, he said, adding that through the budget, the government has pledged to provide a durable and high-speed internet facility, data security and the protection of intellectual property.

The Prime Minister said that institutional measures will be implemented to revise the 'Digital Nepal Framework,' and initiatives will be launched to provide high-speed internet in Kathmandu Valley and Butwal, along with the establishment of an IT Park.

The government accords priority to the use of software developed within the country by public entities and plans to upgrade the government's data center to enhance data storage, security, and utilization capabilities, according to the Prime Minister.

He said that the development and promotion of communications and information technology is one of the top priorities of the government and the new budget highlights the government's three priorities.  Such core priorities are promoting the IT sector, promoting a digital economy, and exploring innovation and job opportunities, he said, adding that ongoing efforts include revising relevant laws and policies to meet these goals.

Prime Minister Dahal said various facts have proved that progress is being achieved in development, prosperity, and self-employment sectors, adding an environment of enthusiasm is being built in the country gradually due to continuous efforts of the government in the sector of production, productivity, and employment creation.

He took time to say that the government is doing its best to seek opportunities for lucrative jobs in the sector of information technology as well as a program along with innovation has been brought at seven provinces establishing a fund of one billion rupees for the first time in the history to promote startup and innovation.

The Prime Minister appealed to youths and entrepreneurs from the IT sector to collaborate in socio-economic transformation efforts through the use of technology.

 "You should not be disappointed. The government is grateful towards your contribution to employment creation and economic development through the IT sector", the Prime Minister said, adding the government is ready to address policy-level issues concerning the IT sector.

Stating that building a corruption-free society by improving 'digital governance' is the responsibility of the government, he said, pledging for the prevention of corruption, guarantee of good governance, smooth service delivery as well as the creation of a strong basis for improving intergovernmental coordination.

Wider discussions are expected to be held in separate sessions on various issues including 'Digitalization' and development, digital economy and investment in digital Nepal, digital empowerment, and inclusion in sustainable development in the event.

More than 600 people representing the IT sector have been participating in the Conclave themed “Harmonizing Digitalization and Development.”

Lawmakers have pressed for the effective implementation of the budget for the fiscal year 2024/25, terming that its implementation was challenging.

The incumbent government on May 28 announced a budget of Rs 1.86 trillion for the upcoming fiscal year.

Speaking at the Parliament meeting today, lawmaker Ramhari Khatiwada emphasized the promptness of the government to effectively implement the budget.

Stating that there were cases of allocating a budget but not implementing it effectively in the previous years, he drew the attention of the government through the Speaker to prevent such a situation.

According to him, an adequate budget should be allocated for the mega projects and the government should pay attention for timely completion of such projects.

Khatiwada viewed that the trend of spending budget towards the end of fiscal year should be ended and development infrastructures should be prioritized.

Similarly, Ishwor Bahadur Lama hailed that some new programs included in the budget were 'positive' and thus highlighted the need for effective implementation.

Furthermore, he demanded to observe May 29 as the Sagarmatha Day and give continuity to 'Sagarmatha Dialogue'. Sagarmatha Dialogue is an initiative of the government of Nepal to host a permanent biennial global dialogue forum in Nepal starting from 2020.

Likewise, Tshiring Damdul Lama Bhote termed the budget as balanced, timely and dynamic, adding it has covered social justice, good-governance and prosperity.

Stating that the budget had prioritized five sectors as transformative areas, he underlined the need to make the budget implementation-oriented.

Sishir Khanal said the budget was balanced. According to him, although the budget could not accord any importance to minimizing the risks of climate change, inclusion of development of information technology and expansion of air connectivity among others were positive aspects of the budget.

Aain Bahadur Shahi Thakuri claimed that the implementation of the budget would be difficult since, he argued, that the budget was populist one. He grieved that the budget failed to adequately incorporate Karnalis' issues.

Chandra Bahadur Bishwakarma saw the need for thought and commitment for budget implementation. Durga Rai said that the budget had incorporated transformative sectors and all regions, communities and geography.

Prem Suwal, however, argued that the budget could not address the reality of the country, expressing his discontent that the government handed over responsibility of carrying out ordinary tasks to the private sector.

Also, airing views, lawmaker Deepak Giri lamented that there was no practical implementation of the annual budget.

Thakur Gairi said the budget was fundamentally right. He questioned whether the ruling parties could not maintain consistency in their common policies and programs.

Purna Bahadur Gharti mentioned that he had full support for the budget presented by the incumbent government. According to him, the budget was a positive one since it had made a pledge for implementation of the Constitution, increasing employment, completing remaining works of the peace process and building a socialism-oriented economy.

Santosh Pariyar demanded to declare Kathmandu City as a 'Cultural City'. He emphasized on moving ahead reducing the existing gap between current expenditure and capital expenditure.

Krishna Kumar Shrestha underlined that the budget had highly prioritized issues such as the underground irrigation program in Terai-Madhes, shallow tube well irrigation and agro development such as making soil fertile.

He argued that the government did not pay attention to addressing acute shortage of drinking water in Terai-Madhes.

Amresh Kumar Singh commented that the budget was allocated on the basis of political influence and it did not pay attention towards addressing recession in the economy.

Lawmakers Bina Jaiswal, Sushila Shrestha, Sonu Murmu and Sarbendranath Shuikla critically commented on the budget for the coming fiscal year.

Finance Minister Barshaman Pun has said the budget is a booster to the national economy, as it was brought in line with the Constitution, 16th periodic plan, review of the republic, and principles and priorities of the appropriation bill.

Constructive feedback from the lawmakers, government policies and programs and commitments made in the international forums were also paid heed while bringing the budget. Minister Pun argued that the economy was getting dynamic with a morale boost of the private sector.

The minister was speaking in response to the lawmakers' multiple queries about whether the budget would prop up the national economy.

During the meeting of the federal Parliament on Wednesday, he believed the financial sector would mobilize investable money to spur economic activities and projects.

"I assure you that we achieve a six percent economic growth with effective enforcement of policies and programs incorporated in the budget. Resources were guaranteed, capital spending upped and projects ensured with budget allocation," Pun claimed.

The government had unveiled the budget of Rs 1. 86 trillion budget for the fiscal year 2024/25.

According to the minister, the budget is not ambitious but balanced as compared to the past. It is not distributional but productive, he added. 

The finance minister further assured the lawmakers that the national pride projects would not see budget crunch. Climate change has been kept in priority as per principles of climate justice.

He shared that the tax system would be implemented as per the report of the tax reforms high level committee. Revenue administration will have better capacity and professionalism.

Uniformity was maintained in the excise duty by evaluating it with other countries.

Finance Minister Barsha Man Pun has said the budget for the fiscal year 2081/82 BS (2024/25) remains objective though significant pressure has been realized in the management of resources.

Proposing to the House of Representatives (HoR) today to initiate general deliberations on the estimations of the government's income and expenditures for the current fiscal year, the finance minister said the budget is capable of alleviating civic frustrations and counteracting economic slowdown.

"In the course of the budget formulation, the shrinking of resources was realized by all. There were many expectations in the budget. Concerns were whether it would prioritize the need to enable an atmosphere for encouraging youths to seek career opportunities within the country and motivate the private sector. But now reactions are that the budget is objective amidst the shrunken resources. The private sector also dubbed it a balanced one," he said.

The minister said that the budget is based on the principles and priorities presented by outgoing Finance Minister Dr Prakash Sharan Mahat.

Similarly, changes in tax rates were made on a need basis with in-depth analysis of their relevance. Tax rates were revised at the lowest level and those changes were based on the need basis, he clarified.

According to him, the government did not want to jeopardize political stability by changing tax rates significantly. 

The Minister apprised the House that the nation's economy has gradually improved.  Amidst the shrinking of the national economy, the Central Statistics Office has estimated a 3.9 per cent economic growth rate this year.

Last year, Nepal's economic growth rate was 1.9 per cent. The scenario suggests that the economy is recovering, but a full recovery is awaited, according to him.

The government has brought an ambitious budget for the upcoming fiscal year. It aims to spend Rs 1,860.39bn, achieve six percent economic growth rate and contain inflation at 5.3 percent in fiscal year 2024-25. On paper, the budget appears balanced. It focuses on economic reforms and private sector participation, and prioritizes sectors like agriculture, tourism and information technology. However, the real test lies in its implementation as the government has historically struggled in budget implementation.

One of the major hurdles is the ambitious revenue target. The government has set a target of collecting 23 percent of GDP as revenue in the upcoming fiscal year. This seems unrealistic as the government could raise only around 18 percent of GDP as revenue in the current fiscal year. There is nothing wrong in being ambitious. However, setting unattainable goals can undermine credibility and lead to significant deficits. Another challenge lies in the allocation of resources for projects without finalized agreements for foreign aid or investment. 

This tendency of allocating funds based on anticipated deals is one of the reasons behind inflated budget size with limited actual spending. Furthermore, there have been frequent policy shifts in certain sectors, such as tax incentives for billet manufacturing industries and taxation of electric vehicles. Frequent changes in policies can discourage private investment and erode investor confidence, and could derail the government’s efforts to achieve high economic growth.

Strong coordination among various government agencies and three tiers of government is needed for effective implementation of the budget. We have seen how lack of coordination among state agencies can lead to delays, cost overruns and sub-par outcomes. The budget has brought ambitious plans for economic corridors, industrial zones and special economic regions. If we are to transform these ideas into reality, we need to have a strong commitment, consistent policies and a conducive investment climate. The proposed Sovereign Wealth Fund to channel remittances into productive sectors is a promising concept. However, it remains unclear how the government intends to implement it. Moreover, slow capital spending has always been a problem in our budget implementation. The government needs to expedite capital spending if it is to achieve targets set in the budget.

The success of the budget hinges on the government’s ability to prioritize and execute important projects and initiatives effectively. Past budgets have suffered from a lack of focus, slow spending and allocation of resources thinly across numerous projects. Overcoming bureaucratic shortcomings, maintaining policy consistency and fostering an enabling environment for private sector participation will be important for effective implementation of the budget. 

Prime Minister Pushpa Kamal Dahal has said that economic reforms would get pace along with implementation of the budget for the coming fiscal year 2024/25.

After inaugurating a modern building of Chautara Hospital today, the Prime Minister mentioned that the budget for the coming fiscal year was unveiled promoting production, productivity and employment.

"We have gained many achievements after the establishment of the republic. Quality change has been achieved from the infrastructure sector to public sector including health and education", he explained. 

The Prime Minister shared, "The budget for the coming fiscal year has announced that Nepal has now entered the new phase of economic reforms", stating that the federal government through policies, program and budget has forwarded programs of strategic importance in order to improve living standard of the people and making people of feel about the change.

He added that quality change in service delivery of hospitals has been seen in recent periods.

The existence of healthy citizens suggests that the country's economy and society are healthy, the Prime Minister said, adding that a populace that is physically and mentally fit can make substantial contributions to national development.

With this principle in mind, the government has accorded top priority to the enhancement of the health sector, he stated. "Noticeable strides in the health indicators in a short period is the achievement of the republic system."

He said that with the completion of a new building for the hospital, it will be able to function efficiently and effectively.

Recalling the time he spent in the district during the 'people's war', the Prime Minister said he used to visit Sindhupalchowk frequently during the war. I am familiar with the villages, settlements, cliffs, and the overall geography of the district." He shared that he still cherished the memories of being offered meals by senior mothers in the district during those days."

Finance Minister Barshaman Pun on Tuesday unveiled a Rs 1.86trn budget for the upcoming fiscal year 2024/25. The government has allocated Rs1.14tn of the total budget for current expenditure, Rs 352bn for capital spending, and Rs 367bn for financing. 

The government has announced the fiscal year 2024/25 as a year of economic reforms and planned the budget accordingly. 

“The budget aims to address long-standing challenges in the economy, including an imbalance in public finance, the increasing size of public debt, limited capital expenditures, and the lack of revenue collection as per the targets. These initiatives will be undertaken through the implementation of fresh programs for economic reforms,” Minister Pun told the federal parliament during his budget speech.

Strategies and priorities for economic reforms

Pun announced that the provinces will be developed as economic hubs in the upcoming financial year. He also revealed plans for the creation of a specialized financial center in coordination with the private sector. 

According to him, Koshi Province will be developed as an economic hub for industry, Madhes for agriculture, Bagmati for information technology, Gandaki for tourism, Lumbini for small and medium enterprises, Karnali for herbs, and Sudurpaschim for religious tourism.

Minister Pun also announced that legal arrangements will be made for commercial production of marijuana for medicinal purposes. Although a similar announcement was made in the current budget and the Ministry of Home Affairs conducted discussions to formulate criteria for allowing the cultivation of marijuana, these efforts were unsuccessful.

The budget estimates for the upcoming fiscal year aim at achieving five objectives: increasing production, productivity, and employment; securing investment and growth; accelerating economic activities by boosting private sector morale; achieving human resource development; and alleviating economic disparities and poverty through balanced resource mobilization and effective public service delivery.

It also identifies economic reforms and private sector encouragement, construction of industrial infrastructure (such as in agriculture, energy, and information technology), development of social sectors like education and health, promotion of inclusion and social security, and enhancement of public service systems as priority areas.

Pun announced five government strategies for economic reforms including structural reforms, improvement in the business environment, reforms in the public finance system, financial sector reforms, and reforms in public administration. He said a high-level task force will be established to provide recommendations to the government for structural reforms of the economy.

The financial plan for the upcoming fiscal year also pledges introduction of favorable policies, complete country rating, and elimination of dual taxation to create a business-friendly environment in the country.

Rs 567bn for subnational governments

The federal government is set to allocate Rs 567bn to the provincial and local governments in the upcoming financial year 2024/25. According to Pun, based on the recommendation of the National Natural Resources and Fiscal Commission (NNRFC), the federal government has earmarked Rs 60bn for the provinces and Rs 88bn for the local level toward fiscal equalization grants.

A conditional grant worth Rs 25.84bn has been allocated for the provinces and Rs 28.88bn for the local level. Additionally, Rs 6.2bn has been allocated to the provinces and Rs 7bn to the local level as supplementary grants. Similarly, Rs 4.4bn has been allocated for the provinces and Rs 8.5bn for the local level as special grants.

Finance Minister Pun emphasized that arrangements will be made to transfer conditional, supplementary, and special grants based on performance. The government estimates that Rs 159bn will be transferred to the provincial and local levels as part of revenue sharing.

Tourism promotion

The government has allocated a budget of Rs 11.91bn to the tourism sector, with Pun emphasizing that the tourism sector will be given priority in the upcoming fiscal year.

The government aims to attract 1.6m tourists in the next financial year. Pun mentioned that tourism services will be provided through a one-door system. He said that there will be targeted programs to promote tourism in neighboring countries such as China and India.

He also announced the government plans to build ‘eco-hill stations’ at major tourist destinations from Chure to the Himalayas. Infrastructure projects, including the Great Himalayan Trail, Mundum Trail, and Guerrilla Trail, will also be developed.

The government will allocate a separate budget to reduce risks in the tourism sector. Additionally, May 29 will be celebrated as Sagarmatha Day, honoring local and foreign citizens involved in promoting Nepal’s tourism sector.

Triangle project​​​​​​​

The government has unveiled plans to implement the Gandaki Economic Triangle Project, connecting Bharatpur, Pokhara, and Butwal. Pun emphasized that this project would serve as a model development initiative, adhering to the principles of integrated development. Industrial revitalization and the creation of quality employment opportunities will be fostered through the establishment of an industrial ecosystem in collaboration with the private sector.

According to the budget, the expansion of the Narayangadh-Butwal and Muglin-Pokhara road sections, currently under construction, will be completed within the upcoming fiscal year. Finance Minister Pun stated that the Butwal-Pokhara road will be widened into a dedicated two-lane route, and a comprehensive transportation network will be developed to support industrial growth along the three corridors of the triangle.

Under this project, the Narayangadh-Butwal road section will be developed as a hub for construction materials and heavy industries, the Muglin-Pokhara section as a center for agriculture and food processing industries, and the Pokhara-Butwal section as a hub for electronic equipment, footwear, clothing, carpets, and domestic goods and services ​​​​​​​industries.

A budget of Rs 2m has been allocated for the implementation of this project, which aims to establish it as a model initiative through public-private partnership. Additionally, the budget outlines plans to develop the areas surrounding the east-west highway from Nijgadh to Dhalkebar as the Nepali carpet corridor, with provisions for public agencies to procure such carpets.

Hydropower expansion​​​​​​​

The government has set a target to enhance the capacity of the national grid to 4,500 megawatts by the upcoming fiscal year. It anticipates increasing the per capita consumption of electricity from 380 kilowatts to 450 kilowatts. 

Additionally, the government aims to begin exporting Nepal’s electricity to Bangladesh, expanding beyond the current export to India.

The promotion of reservoir-based projects has been prioritized to meet power demands during winter, with plans to implement the construction of the 1200 megawatts Budhigandaki Hydroelectricity Project. The government also plans to develop the 625 megawatts Dudhkoshi, 417 megawatts Nalgadh, and the 280 megawatts Naumure projects are also on the cards.

Further, the government plans to launch the development of the 77.5 megawatts Ghunsha Khola and 70.3 megawatts Simbua Khola hydroelectricity projects, securing investments from Nepalis in foreign employment.

Under the People’s Hydroelectricity Program, construction is slated to commence for the 106 megawatts Jagadulla, 99.9 megawatts Tamakoshi V, and 210 megawatts Chainpur Seti Hydroelectricity Project. Moreover, plans include determining the investment framework for the Sunkoshi III Hydropower Project and conducting a feasibility study for the 10,800 megawatts Karnali Chisapani Hydropower Project. 

The government has set a goal of promoting clean and renewable energy to replace traditional energy sources, aiming for zero carbon emissions by 2045. It plans to encourage the production, storage, and use of green hydrogen, while also concluding the construction of the Dhalkebar-Inaruwa and Barhabise-Khimti-Lapsifedi transmission lines within the next fiscal year.

Initiatives are also in place to initiate the construction of the Seti Corridor, Bheri Corridor, and Budhigandaki Corridor Transmission Lines, as well as concluding the construction of the New Butwal-Gorakhpur Transnational Line. 

Additionally, budgets are allocated for the construction of the Inaruwa-Poornia and Dododhara-Bareli Transmission Lines. Finance Minister Pun informed the house that the government has allocated a budget of Rs 50.7bn to the energy sector in the upcoming fiscal year.

Agriculture investment decade​​​​​​​

The government has announced a ‘decade of investment in agriculture’ for the development of the agricultural sector from 2024 to 2034. Finance Minister Pun said that special areas will be designated based on geography, market potential, and agricultural produce. 

“The government will promote contract farming in collaboration with farmers and businesspeople,” he said, adding that those who process and export agricultural produce will receive loan interest subsidies, grants, and fertilizer seeds based on their production.

The budget also states that those engaged in commercial farming and animal husbandry will receive tax exemptions on the purchase of machinery and spare parts, as well as interest subsidies on loans.

Employment bank​​​​​​​

The government has announced its intention to establish an employment bank. It has been mentioned that this bank will compile integrated records of employment-related information. The budget also highlights the integration of employment and labor market demands into an automated system. Additionally, the budget outlines plans for conducting employment programs.

The Prime Minister Employment Program will continue, with provisions for engaging the unemployed listed at the local level in public maintenance work. Approximately 200,000 individuals will be provided employment for a minimum of 100 days through this program.

Pun announced that orientation training provided to individuals before foreign employment will be made free of charge. 

Finance Minister Pun said that labor contracts will be signed with three additional destination countries starting from the fiscal year 2024/25. He added that emphasis will be placed on sending skilled workers.

Pun also mentioned that the scope of benefits from the welfare fund for dependent families of workers engaged in foreign employment will be expanded.

Budget for roads​​​​​​​

The government has expressed its commitment to expedite the construction of highways in the next fiscal year, although the budget allocation for this purpose is comparatively lower. 

A sum of Rs 29.88bn has been allocated for the expansion of the East-West highway, while Rs 22.54bn has been earmarked for the Kathmandu-Tarai Fast Track project. Regarding the latter, it has been stated that the construction of Mahadebtar, Dhedre, and Lendanda tunnels will be completed in 2024/25, along with an accelerated pace for the construction of 57 bridges.

Furthermore, Rs 3.64bn has been allocated for the Madhya Pahadi Lokmarga, which will facilitate the construction of 75 kilometers of blacktoppings and 10 bridges under this allocation. Additionally, Rs 4.4bn has been set aside for the development of the Koshi, Kaligandaki, and Karnali corridors.

Stadiums in national pride project​​​​​​​

The government has allocated a budget of Rs 3.5bn for the Ministry of Youth and Sports. Pun announced that Rs 1.3bn has been earmarked solely for the development of infrastructure in the sports sector. He also revealed plans to organize 80 national-level sports events in the next financial year.

“The standard of TU cricket ground will be improved, and Gautam Buddha Stadium will be constructed in cooperation with the provincial and local levels,” Pun said. 

Additionally, projects to enhance Mulpani Stadium in Kathmandu and Girija Prasad Stadium in Biratnagar will be promoted as national pride initiatives. 

Pun disclosed that Rs 600m has been allocated to organize the Tenth National Games in Surkhet. Furthermore, he emphasized that teachers will receive sports training and sports promotion activities will be conducted in schools. 

Training for media workers​​​​​​​

Minister Pun has said that complete freedom of the press will be guaranteed while ensuring the right of citizens to be well informed. By making the mass media sector fair, competitive, and inclusive, he said arrangements will be made for the timely communication of news of public importance. 

Training programs to increase the capacity of media workers have also been introduced in the budget. The government also plans to regulate advertising through digital platforms. 

A budget of Rs 7bn has been allocated to the Ministry of Communication and Information Technology to implement these plans.

Key takeaways from budget​​​​​​​

• Six percent economic growth, 5.5 percent inflation forecast
• Rs 1.5bn for the program of Nepali Army bunkers and barracks
• Rs 5.63bn for the construction of tunnels, intersections and flyovers
• Abolition of additional tax on potatoes, onions and apples
• Rs 2.46bn to build ‘signature bridge’ on Narayani and Tinau river
• Compulsory issue of shares will be made to companies with more than certain capital
• A sovereign wealth fund will be established from remittances
• Rs 1.16trn for social security allowances
• College in the memory of late Sita Dahal, wife of Prime Minister Pushpa Kamal Dahal
• Rs 170m budget to establish knowledge park

The  Cabinet meeting on Tuesday endorsed the annual budget for the fiscal year 2081/82 (2024/25).

The budget is being presented by Finance Minister Barshaman Pun at the joint meeting of the Federal Parliament.

Minister of Communications and Information Technology and Government Spokesperson Rekha Sharma shared that the meeting of the Council of Ministers held at Singha Durbar has decided to endorse the budget.

The laws related to the budget will also be presented in the Parliament.

A joint meeting of both the Houses of federal Parliament scheduled for 1 pm to unveil the annual budget for the upcoming fiscal year has been postponed for 3 pm today.

The Parliament Secretariat said that the meeting was postponed due to a 'special reason'.

Finance Minister Barshaman Pun will present the budget for the upcoming fiscal year in the joint meeting of the Parliament today.  

The government is unveiling the budget for the fiscal year, 2081/82 BS today.

Finance Minister Barshaman Pun is scheduled to present the budget in the joint meeting of the federal Parliament at 1 pm today.

He is presenting the details on estimated annual spending and revenue, according to the Parliament Secretariat.

As per Article 119 of Constitution of Nepal, 2072, the government is obliged to present the annual budget in the joint meeting of the federal Parliament.