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The Pokhara Metropolitan City has unveiled its annual budget of Rs 8.35 billion for the fiscal year 2025/26.

Deputy Mayor Manju Devi Gurung presented the budget in the 17th municipal assembly of the metropolitan city on Sunday. 

The budget has estimated the revenue of Rs 3.13 billion from federal conditional grants, Rs Rs 330.08 million from federal revenue sharing, Rs 528.7 million from federal equalization grant, Rs 0.815 million from province equalization grant. 

Deputy Mayor Gurung informed that the internal revenue is estimated to be Rs 5.22 billion. The metropolis is expected to receive Rs 1.1 billion from local revenue sharing and Rs 32.8 million from province revenue sharing. 

Among the key priorities of the budget include green, resilient and sustainable infrastructure development, and tourism promotion, the budget proposal stated. 

It has also laid emphasis on environment protection, preservation, solid waste management, inclusive, balanced and equitable development, institutional development, good governance promotion and quality service delivery. 

Deputy Prime Minister and Finance Minister Bishnu Poudel has said that the government will ensure a budget for disaster management in the country.

In a discussion held with a joint team of elected people’s representatives from Lalitpur district on Wednesday, Deputy Prime Minister Poudel said that the disaster-induced floods and landslides will be managed as soon as possible.

Expressing his commitment to allocate budget through the concerned ministry in necessary coordination with the NDRRMA, he also responded positively to all the issues raised by the all-party team of people's representatives.

The team led by Nepali Congress leader and House of Representatives member Udaya Shumsher Rana sought funds for immediate reconstruction of settlements and structures damaged due to the floods that occurred last monsoon.

The team also urged that the budget of Rs 250 million allocated for the Lele-Bhardeu-Chandanpur-Thuladurlung road be mobilized as a multi-year project. 

The team has demanded immediate compensation for those impacted by the Satdobato-Chapagaun and Satdobato-Godavari road expansion works.

Pakistan’s federal budget for the fiscal year 2025–26, presented by Finance Minister Senator Muhammad Aurangzeb, outlines a comprehensive plan focused on institutional reform, financial discipline, and inclusive economic development. The government has emphasized a shift from short-term responses to long-term strategies aimed at stability and sustainable growth.

Key economic indicators suggest a recovery, with a reported primary surplus of 2.4 percent of GDP and inflation dropping to a two-year low of 4.7 percent. The current account is expected to post a surplus of $1.5bn, reversing a previous deficit. Pakistan has also seen increased international confidence, as reflected in improved credit ratings and rising remittances.

Central to the budget is the transformation of the Federal Board of Revenue (FBR), including the use of AI audits, e-invoicing, and expanded tax compliance efforts. The government reports progress in identifying non-filers, blocking fake refunds, and broadening the tax base. Structural reforms span various sectors, including tariff simplification, energy cost reductions, and reorganization of state-owned enterprises. Debt management measures and pension reforms are also part of the broader fiscal strategy.

The budget introduces targeted tax relief for salaried individuals and mid-sized corporations, alongside incentives for agriculture, SMEs, IT exports, and green economy initiatives. Development spending has been allocated across federal and provincial programs, with a focus on health, education, and social protection. The Benazir Income Support Program (BISP) has seen increased funding, and civil servant salaries and pensions have been adjusted.

Strategic investments have been outlined in agriculture, information technology, climate resilience, and mineral resources. Notably, the Reko Diq mining project is expected to generate substantial economic returns and employment.

The Parliament meeting has been scheduled for 1 pm today.

As per the meeting agenda, Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel will present a proposal seeking a discussion on the government's annual budget for the fiscal year 2025/26.

Similarly, State Affairs and Good Governance Committee Chairman Ramhari Khatiwada will present the 'Report of the Committee on the Federal Civil Service Bill, 2082'.

It may be noted that the Parliament meeting has not been able to enter the regular agenda in the past few days due to continuous obstruction by the  opposition parties, demanding the resignation of Home Minister Ramesh Lekhak over the 'visit visa' scam.

Deputy Prime Minister and Minister for Finance Bishnu Prasad Paudel assured that the newly introduced budget for the fiscal year 2025/26 would ensure proper utilization of the available resources and to foster infrastructure development. 

In a discussion organized by the Society of Infrastructure Journalists (SIJ-Nepal) on the 'Infrastructure sector in budget and its implementation', DPM Paudel reiterated that the budget has been devised to prevent the misuse of the resources in construction of infrastructures.

Paudel added that the budget was allocated in a realistic approach taking into consideration the needs of the nation and available resources.

According to him, several reform measures have been introduced and implemented to address the longstanding problems and challenges in the infrastructure sector. He believed that these measures would yield result-oriented outcomes.

"Budget is only a single digit document. The budget is prepared in a realistic way so that the credibility of the budget is not questioned," the DPM asserted, claiming that there has been no criticism of the newly introduced annual estimates of income and expenditure.

It may be noted that the incumbent government on May 29 had introduced an annual budget of Rs 1.964 trillion for the fiscal year 2025/26.

Furthermore, for fiscal discipline, he informed that the budget includes a dedicated focus on capital expenditure to ensure proper management of the resources and timely spending of the allocated budget. 

In a departure from the trend of increasing general expenditure, the DPM highlighted that stringent measures have been put in place to cap the general expenditure to prevent excessive recurrent spending. 

As for the Public Procurement Act, he informed that the 14th amendment to the Act has already addressed some existing issues. He expressed his readiness to consider further amendments in the Act if need be, so as to promote the country's construction sector. 

Addressing concerns over shortage of construction materials affecting construction works' timeliness, the DPM said that the excavation of mining and aggregate materials will be allowed from only appropriate places and after conducting environment impact assessment.

Citing the provision of alternative development financing for mega projects introduced by the government, he was confident that the Parliament would endorse necessary laws to facilitate such provisions.

The new fiscal budget presented on Thursday has effectively halted the progress of around 17,117 MW of run-of-river (RoR) hydropower projects in Nepal by introducing a major policy shift in the Power Purchase Agreement (PPA) model.

Until now, RoR projects operated under a ‘Take or Pay’ PPA model, where the Nepal Electricity Authority (NEA) had to pay private developers regardless of whether it used the electricity or not. The latest budget, however, proposes a shift to a ‘Take and Pay’ model, meaning the NEA will only pay for the electricity it actually purchases.

Ganesh Karki, President of the Independent Power Producers’ Association of Nepal (IPPAN), warned that this policy change could render investments already made by private developers in RoR projects unviable. He said banks are unlikely to finance projects under the new PPA model, pushing many developments to the brink of cancellation.

According to IPPAN, 17,117 MW worth of RoR projects currently hold licenses from the Department of Electricity Development, with approximately Rs 66bn already invested. These projects are in various stages of development, awaiting PPAs and financial closure. Once fully implemented, total investment could reach Rs 3.4trn. The breakdown includes 2,078 MW of projects already under construction, 6,436 MW awaiting construction permits, 5,079 MW with survey licenses, and 3,521 MW awaiting survey permits.

This shift has frustrated private developers who had expected the budget to align with the government’s recently unveiled Energy Development Roadmap, which aims to generate 28,500 MW of electricity—15,000 MW for export to India and 13,500 MW for domestic consumption.

IPPAN claims the new provision makes it nearly impossible for the private sector to move forward, despite other budget promises like streamlining forest clearance, transmission line construction, and support for reservoir-based projects. Karki argued that unless developers can build the projects, these other incentives become meaningless.

“The government’s move has placed private developers in a position where their investment could drop to zero,” Karki said. “The state should not have issued licenses in the first place if it planned to later change the agreement terms. The Department of Electricity Development continues to issue licenses, but developers are now left in limbo.”

NEA sources said the switch to ‘Take and Pay’ is necessary for the financial sustainability of the authority. The previous model, where payments had to be made even without actual power usage, posed significant financial risks—especially during the monsoon when RoR production exceeds domestic demand and guaranteed exports to India remain uncertain.

IPPAN has strongly opposed the shift and announced plans to launch protests if the decision is not reversed. In a statement released Friday, IPPAN described the new policy as hostile to private investment and a setback for Nepal’s power sector. The group also criticized the government for failing to support the ongoing development of RoR projects, which they claim still constitute a majority of the private sector’s hydropower activity.

IPPAN called for an immediate revision of the policy and demanded a return to the ‘Take or Pay’ model. Failure to do so, they said, would prompt a “strong and decisive” protest campaign.

Currently, Nepal’s total electricity generation capacity is about 3,600 MW, with over 80 percent contributed by the private sector. Of the 17,117 MW of RoR projects awaiting PPAs, the NEA or the government is developing only 190 MW.

IPPAN argues that the new provision contradicts the Energy Development Roadmap and the goals set out in the 16th Five-Year Plan of the National Planning Commission. The association also claims the decision violates existing policies and legislation, including the Electricity Act 1992, the Hydropower Policy 2001, and the National Water Resources Policy.

The organization fears that this policy change will derail over Rs 1.5trn already invested by the private sector, and jeopardize an additional Rs 3trn planned for future investment, pushing the entire sector into uncertainty.

The government on Thursday announced a budget of Rs 1. 964 trillion for the fiscal year 2025/26.

Unveiling the annual budget at the joint session of the Federal Parliament today, Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel tabled the budget for the fiscal year 2025/26 with the size of Rs 1. 964 trillion.

"For the upcoming fiscal year, Rs 1.180 trillion (60.1%) has been allocated for recurrent expenditure while Rs 489 billion (20.8%) for capital expenditure, and Rs 375 billion (19.1%) for fiscal management," Finance Minister Paudel stated while reading out the annual budget.

The size of the budget for the upcoming fiscal year is higher than 5.6 percent compared to the current fiscal year's allocation and 18.2 percent higher compared to the revised one.

Of the total allocation, Rs 417.83 billion has been allocated for fiscal transfer for the provinces and local governments.

According to the finance minister, Rs 1. 315 trillion would be managed for the revenue collection and Rs 53.45 billion from the foreign grants.

Likewise, Rs 595.66 billion would be managed from loans including Rs 362 billion from internal loans and Rs 233.66 billion from foreign loans, Minister for Finance Paudel announced in the Federal Parliament meeting today.

The government has allocated Rs 86.1 billion for the Ministry of Energy, Water Resources and Irrigation.

Presenting the budget for the fiscal year in the joint meeting of the Federal Parliament on Thursday, Finance Minister Bishnu Paudel said that Rs 86. 1 billion has been allocated for the Ministry of Energy, Water Resources and Irrigation.

The government has allocated Rs 211.17 billion for the Ministry of Education, Science and Technology.

Presenting the budget for the fiscal year in the joint meeting of the Federal Parliament on Thursday, Finance Minister Bishnu Paudel informed that Rs 211. 17 billion has been allocated for the Education Ministry.  

World Health Organization officials, donors, and diplomats gathered in Geneva this week amid significant funding challenges following the United States decision to withdraw from the agency, according to Reuters.

The US, which contributed around 18 percent of WHO’s funding, was absent from the assembly as the organization faces a $600m budget shortfall for 2025 and plans a 21 percent funding cut over the next two years.

The WHO will focus on core priorities like vaccine approval, outbreak response, and providing treatment guidelines while scaling back training programs and offices in wealthier countries. Despite President Donald Trump’s recent comments hinting at a possible reversal, global health leaders say the US remains on course to officially leave the WHO in January 2026, Reuters reported.

South Africa’s finance ministry announced on Thursday that it will not proceed with the planned increase in value-added tax (VAT) from May 1, following political opposition and investor concerns over potential instability in the coalition government, as claimed by Reuters.

As part of the national budget for 2025, the National Treasury recommended a gradual 1 percent point rise in VAT over two years. However, the two major coalition partners, the African National Congress (ANC) and the Democratic Alliance (DA), were unable to agree on the initial 0.5 percent point raise.

As a result, the VAT rate would remain at 15 percent, the ministry confirmed. Finance Minister Enoch Godongwana is scheduled to propose amended versions of the Appropriation and Division of Revenue Bills in the coming weeks, Reuters reported.

The government has initiated preparations to prioritize programs in the upcoming fiscal year's budget aimed at addressing the challenges that Nepal could face following its graduation from Least Developed Country (LDC) status in 2026.

Concerns have been raised that Nepal’s current benefits in the global market may diminish after graduation. Post-graduation, Nepal will lose certain trade-related intellectual property advantages which could negatively affect Nepali products. However, government officials believe that proactive policy and diplomatic efforts could help mitigate these risks and maintain existing benefits.

In 2021, the UN General Assembly approved Nepal’s transition from an LDC to a developing country, based on the recommendation of the United Nations Committee for Development Policy. 

The Ministry of Finance has been engaging in discussions with relevant agencies to integrate the roadmap for Nepal’s graduation into the upcoming fiscal year’s budget. Intensive consultations have taken place between the National Planning Commission, the Ministry of Industry, Commerce and Supplies, and the Ministry of Finance on the issue.

Officials insist that there won’t be much impact from waiver of facilities post-graduation as it would not affect Nepal’s exports to India, its largest trading partner, which accounts for two-thirds of the country’s total trade. As a close neighbor, Nepal enjoys special concessions under bilateral agreements, which will remain intact even after graduation.

Nepal’s exports to China, where it enjoys duty-free access for several products, will also remain unaffected. Although current exports to China are minimal, the northern neighbor holds significant potential as a future export market for Nepal.

However, exports to other markets, such as the United States, the European Union (EU) and the United Kingdom—where Nepal currently benefits from LDC privileges—could face problems, according to finance ministry officials. They added that grant assistance could also diminish gradually post-graduation.

The finance ministry has stated that preparations are already underway to formulate new policies to address these issues. The goal is to align the graduation process with the budget’s objectives for sustainable development, a finance ministry official said.

During recent discussions, officials underlined the need to develop policies, plans and programs that will ensure the upcoming fiscal year 2025-26 is both smooth and sustainable and aligns with Nepal’s post-graduation strategies.

The finance ministry plans to support sustainable economic growth and job creation through fiscal policy, stable monetary policy and the effective operation of development assistance. Additionally, trade analysis and enhancing capacity and financial access for high-return projects are also among the ministry’s key priorities.

The criteria for LDC graduation include per capita gross national income, human asset index and economic and environmental vulnerability indicators, among others.

Officials say Nepal is expected to benefit from strengthened access to development and business investments, new trade and economic partnerships, sustainable development, enhanced national image, and increased credibility, among others, post-graduation.

With revenue affected by a slowdown in economic activities which has put pressure on resources, the government has hinted that the upcoming fiscal year’s budget will adopt austerity measures. Issuing guidelines for budget formulation for fiscal year 2025-26, which begins from mid-July, the Ministry of Finance has urged ministries to propose only essential budgets, maintaining fiscal discipline in current expenditures. 

The National Planning Commission (NPC) has given a budget ceiling of Rs 1,900bn for 2025-26. The finance ministry has requested ministries to reduce current expenditures in line with the criteria for making public spending frugal and effective. Budget proposals for software purchases and consultancy services should only be made if they contribute to the development of an integrated system with adequate justification and cost-effectiveness, the guidelines read.

Ministries have also been cautioned to avoid duplication of budget programs. The finance ministry has urged other ministries to not propose any budget for abandoned projects. It has said that expenditure proposals for furniture, fixtures and decorations should be made only in essential cases.

Due to resource constraints, the finance ministry has advised that additional funds should not be sought mid-fiscal year except under special circumstances. Ministries have also been instructed to make budget allocations for service contracts for vacant positions within the approved pay scale only. “Positions occupied by employees working in other offices or outside the pay scale should not be considered vacant, and no budget should be requested for such cases,” it added.

Ministries have also been advised against requesting budgets for purchasing machinery, equipment or furniture. Budgets for vehicle purchases and foreign travel should only be proposed in essential cases, the guideline states. All ministries must submit their budget proposals for the upcoming fiscal year by March 28.

The finance ministry has requested ministries to prepare budget proposals in such a way that it minimizes the need for fund transfers and program revisions. They have also been told to propose programs based on the project classification criteria introduced last year. Ministries have been told to not include projects and programs that can create long-term liability. Likewise, ministries must propose only quality projects and programs with completed preparations and cost-benefit analysis indicating feasibility. They have been instructed to make sufficient allocations for ongoing projects expected to be completed in the next fiscal year before proposing new programs and projects.

To ensure efficient use of limited resources, the finance ministry has told ministries not to spread resources across small projects. Ministries are required to reduce the number of sequential projects and suspend non-implementable and low-priority projects. When proposing projects, ministries have to include only those projects listed in the National Planning Commission's project bank. For new projects where studies are incomplete, budget allocations should only be requested for study and preparatory works, not for implementation.

The finance ministry has said that new projects and programs should be proposed only after ensuring availability of resources. The ministries have also been told to maximize the use of available resources to fulfill periodic plans, sectoral strategies, international commitments and national development goals. “Budget proposals should comply with guidance and suggestions received from the Prime Minister’s Office, constitutional bodies and regulatory bodies, among others”.

Conditional grants and new projects

According to the guidelines, conditional grants under intergovernmental financial transfers should be reprioritized to ensure continuity of quality projects.  “Sufficient funds should be allocated for salaries and other mandatory obligations of working personnel under conditional grants. For supplementary and special grant projects, budget proposals should cover liabilities created, and new projects should only be proposed for remaining amounts,” it added. “New projects should not be proposed if they contradict the criteria set by the supplementary and special grant procedures.”

Ministries and subnational governments have also been told to avoid duplication of projects and maintain institutional coordination to reduce risks by considering disaster sensitivity. Ministries have also been told to prioritize post-disaster reconstruction in their budget requests. “Projects with resource approval from the finance ministry must allocate sufficient funds to cover liabilities in the next fiscal year before proposing other projects and programs. Projects with assured resources should be reprioritized to ensure resource management,” the guidelines added. It states that budget proposals must include mandatory allocations for liabilities created by legally-incurred expenditures. 

Prime Minister Pushpa Kamal Dahal has said the government's policies and programs for the new fiscal year are in the interests of the citizens and Nepal.

Talking to the media at Bharatpur Airport today, the Prime Minister said that overall, the budget is satisfactory. "I hope it will be endorsed by the House of Representatives smoothly."

The Prime Minister claimed that the budget highlighted several government initiatives for good governance, social justice and prosperity. "I feel that more initiatives are needed to meet the people's aspirations."

Responding to a query about the possibility of the change of Inspector General of Police, he said no such thing would happen. "This is just a rumor," he said, adding that he recently summoned chiefs of security bodies and urged them to work confidently.

CPN-UML lawmaker Yogesh Kumar Bhattarai has emphasized on policy and structural change in the budget-making process.

Participating in the discussion on the allocation of various ministries under the Appropriation Bill, 2081 BS in today's meeting of the House of Representatives, Bhattarai complained that the budget book was filled up with 'small pocket' projects.

Urging to improve the situation of low capital expenditure and high financial expenditure, lawmaker Bhattarai remarked that "Pocket Bank" was used as a basis for budgeting without following the "Project Bank".

He further urged for giving up the illusion that elections could be won by taking small projects dispersed in the election constituencies.

Though the issue of taking advance tax in customs is fine in terms of increasing the income of the state, it will badly affect the consumers, he said.

Bhattarai further complained that the budget was not prepared after proper discussions with coalition parties in the government.

He urged the government to advance the Tamor Reservoir Project, which would be easy in terms of investment, as it is positive that the energy sector is being made the basis of Nepal's prosperity.

The Tamor project is located in Taplejung, Panchthar and Dhankuta districts.

Prime Minister Pushpa Kamal Dahal has been stating in various forums that a budget of up to Rs 1.9trn would be needed for the fiscal year 2024/25.

The private sector, meanwhile, has been saying that a larger budget would have an adverse impact on them. Speaking at a pre-budget roundtable recently, business leaders said a large budget size will put pressure on resources, and as revenue and tax rates will have to be increased for this, ultimately the private sector will have to bear the brunt. They said that the government should bring a budget that can be implemented rather than focus on its size. In their suggestions to the finance ministry, which is preparing the budget for the upcoming fiscal year, they have requested the government to not exert pressure and dampen the morale of the private sector.

Rajesh Kumar Agrawal, President of the Confederation of Nepalese Industries (CNI), said that if the government focuses on a large budget, it will put pressure on the private sector. “This will help neither the government nor the private sector,” he added. “A wrong narrative is being created that credit extended to the private sector is being misused. This should be corrected.”

Likewise, Chandra Prasad Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), urged the government to bring a budget that can be implemented. “Since we recently held the 2024 Nepal Investment Summit, the coming fiscal year should be taken as the beginning of the investment decade. It seems that the monetary policy was not in sync with the budget. As a result, the government is not being able to achieve what it intends to achieve,” he added. Likewise, Nepal Chambers of Commerce (NCC) President Kamlesh Agrawal requested the government not to increase tax rates that would put an additional burden on the private sector. “Rising tax rates alone do not guarantee revenue growth. It can encourage smuggling,” he added.

Sunil KC, president of the Nepal Bankers’ Association, complained that construction entrepreneurs have been adversely affected as the government has not increased the size of capital expenditure which has ultimately led to an increase in bad loans in banks. “The construction sector accounts for the highest non-performing loans (NPLs) in the banking system. This situation has arisen because the government failed to make capital expenditures,” he added.

Likewise, Upendra Prasad Paudyal, president of the Bank and Financial Institutions Association of Nepal (BFIN), said NPL levels in the banking system can be controlled if the government is flexible towards the construction sector. “The government should encourage construction even by issuing bonds if needed. If that sector rises, NPLs will decrease, and other sectors will also improve,” he said.

On the other hand, Ganesh Karki, president of the Independent Power Producers’ Association (IPPAN), suggested that the budget give special priority to the hydropower sector, as hydropower construction not only generates electricity but also builds roads, triggers market expansion, and creates employment simultaneously.Similarly, Karan Kumar Chaudhary, president of the Nada Automobile Association of Nepal, complained that the government has forgotten the automobile sector. He said that the automobile sector has fallen victim to double taxation.

Economist Prof Dr Achyut Wagle suggested making bold decisions and showing courage for reforms, as the sectors traditionally considered the backbone of the economy are currently facing problems. “Nepal is falling behind as it has failed to identify and develop potential sectors. There is a need to explore new revenue sources,” he added. Likewise, Resham Thapa, head of the Department of Economics under Tribhuvan University, said local units shouldn’t be undermined while preparing the budget.