National Budget Reform 2026

The National Assembly of Nepal convened to discuss key budget-related bills including the Appropriation Bill, Economic Bill, and National Debt Recovery Bill, covering major ministry allocations such as Industry, Agriculture, Forests, Infrastructure, Home Affairs, Energy, Foreign Affairs, Finance, and Defence.

Finance Minister Dr. Swarnim Wagle presented the Appropriation Bill, 2083 during the 21st meeting of Nepal's National Assembly to outline the fiscal framework for the upcoming year.

Nepal's House of Representatives passed the Public Procurement (Second Amendment) Bill 2083 to accelerate development projects and improve quality by introducing an average number-based system and an Infrastructure Court to resolve stalled projects.

Nepal's 2026/27 federal budget of Rs2.124 trillion retains most revenue authority at the federal level, reducing fiscal transfers to provinces and local governments from 33.6% in 2018/19 to 28.2%, challenging constitutional federalism principles and impacting constitutionally assigned services delivery.

Twenty-seven local governments in Nepal, including 2 sub-metropolitan cities, 10 municipalities, and 15 rural municipalities, missed the June 24 deadline to present their budgets for fiscal year 2026-27, resulting in reduced performance-based fiscal grants. Delays stemmed from tensions among officials, disagreements between elected representatives, and federal oversight issues.

Karnali Province announced a Rs 35.39 billion budget for fiscal year 2026/27 with emphasis on social welfare and inclusion, including Rs 120 million for the Chief Minister Dalit Income Generation Programme. The plan aims to empower marginalized communities and enhance social security, gender equality, and human rights programs.

Finance Minister Swarnim Waglé's ambitious 2026/27 federal budget aims for 7% growth and a 25% increase in size, including doubling the individual income tax exemption, but faces controversy over allegations of wrongdoing, affecting discourse in the new government under Prime Minister Balendra Shah.

Nepal's government launched the Startup Fast Track Working Plan 2026 to simplify startup regulations, allow annual tax filing for first three years, and enable faster dissolution processes. This aims to reduce compliance burdens and improve access to subsidised loans for new businesses.

Nepal's provinces allocated substantial funds for healthcare in fiscal year 2026/27, focusing on hospital upgrades, telemedicine, specialist care, and rural health access, with Karnali emphasizing hospital transformation and Lumbini targeting specialist services.

Seven provincial budgets for fiscal year 2083/84 emphasize forest conservation, environmental protection, watershed management, and climate adaptation, aiming to promote sustainable natural resource use and green employment. Challenges include human-wildlife conflicts, forest fire control, and watershed conservation efforts across provinces.

All seven provincial governments in Nepal have prioritized structural transformation of agriculture in their fiscal year 2083/84 budgets, focusing on modernization, mechanization, commercialization, youth employment, organic farming, and farmer-centric programs such as loan subsidies and digital identities to enhance transparency and reduce migration.

All seven provinces in Nepal presented their budgets for fiscal year 2083/84, highlighting investments in infrastructure, health, education, and investment promotion. Bagmati province had the largest allocation at Rs 66.93 billion, while Koshi showed the highest budget growth at 12.74%.

Bagmati Province announced a Rs 66.09 billion budget for fiscal year 2026/27 with allocations of Rs 22.09 billion for recurrent expenditure and Rs 43.09 billion for capital projects. The province projects a 5.40% annual economic growth rate and a per capita income of USD 2,644, the highest among Nepalese provinces.

Provincial governments revealed 2026/27 budgets prioritizing capital projects in roads, healthcare, agriculture, and tourism to boost development and infrastructure. Madhesh Province allocated Rs 41.13 billion focusing on revenue and borrowing, while Koshi emphasized infrastructure, agriculture, tourism, education, and healthcare in its Rs 40.44 billion budget.

Gandaki Province government announced a budget of NPR 32.99 billion for fiscal year 2083/84, allocating over 60% for capital expenditure and slightly reducing current expenditure compared to last year.

Nepal Development Watch praised the reform measures in Nepal's Rs 2.12 trillion 2026/27 budget but warned of a Rs 0.8 trillion financing gap requiring loans and international grants, and noted limited focus on social inclusion despite reforms such as ministry reductions, agency mergers, and tax cuts for middle class and tech youth.

Koshi Province announced a Rs 40.449 billion budget for fiscal year 2026/27, marking a 12.74% increase from the previous year, with Rs 13.976 billion designated for current expenditure and Rs 20.759 billion for capital expenditure.

Bagmati Province government unveiled a Rs 66.93 billion budget for fiscal year 2026/27, allocating Rs 43.97 billion (65.69%) to capital expenditure and Rs 22.96 billion (34.31%) to recurrent expenditure.

Nepal spent only 63.20% of its allocated capital budget of NPR 352.35 billion in fiscal year 2080/81, significantly lower than India's 95.54%. Low expenditure rates over the past decade are attributed to unprepared projects, land acquisition issues, and cash flow problems, hindering development progress.

On July 15, 2026, the mandatory three-year lock-in period for 40,318,111 shares held by promoters, local residents, and employees of Ghorahi Cement Industry Limited will expire, allowing these shares to become tradable. Shares held by board directors and top management remain restricted beyond this date.

The government allocated Rs15 billion in the 2026/27 budget to revive Nepal's National Health Insurance Programme addressing challenges like underfunding and reduced outpatient services, aiming to achieve universal health coverage by 2030.

Nepal's government allocated NPR 424.27 billion for fiscal year 2083/84 to provinces and local levels, distributing NPR 314.62 billion to local governments and NPR 109.65 billion to all seven provinces to support local governance and public services.

Nepal plans to build its first Sovereign AI Compute Centre in Syuchatar, Kathmandu, using hydropower to support AI computing and allocating budget for AI processors and overseas expert fellowships. Concerns were raised about sustainability and the effectiveness of investing in expensive, rapidly obsolete AI hardware.

Nepal's Rs 21.24 trillion budget for 2026 with a Rs 6.57 trillion deficit drew criticism for overambition and unrealistic revenue projections. Capital expenditure at Rs 431 billion was notably low compared to Rs 12.7 trillion in running costs, raising concerns about fiscal sustainability.

Finance Minister Sarnim Wagle announced Nepal's largest budget of Rs2.124 trillion for FY 2026-27, aiming to drive growth through the private sector. Nearly 60% of the budget is allocated to recurring expenses, limiting funds for capital investments and infrastructure, with a 21% civil servant pay increase but lacking job creation and remittance dependence reduction strategies.

Nepal's largest-ever Rs2.124 trillion budget proposes tax rate reductions, a sovereign data centre, and technology sector growth, but faces challenges like insufficient revenue collection, high recurrent spending, and poor project implementation capacity. Concerns include fiscal honesty and foreign investment risks amid the Financial Action Task Force grey listing.

The NEPSE index gained 22.21 points to reach 2777.58, driven by a 6.03 percent surge in the finance subsector, despite an overall decline in trading volume. This optimistic movement reflects selective sector strength within the stock market.

Nepal's 2026-27 budget allocates Rs10.53 billion to the Ministry of Culture, Tourism and Civil Aviation, down from Rs13.28 billion last year, focusing on heritage conservation and cinema development. Despite this, artists express dissatisfaction due to lack of dialogue and recognition of their economic contributions.

Following the budget announcement, the Nepal Stock Exchange saw its NEPSE index drop by 26.72 points to 2755.37. Market activity showed 233 companies experiencing price declines and only 35 seeing gains, with trading volume exceeding Rs 5.5 billion.

Critics highlighted Nepal's budget focus on middle-class expansion and IT growth, warning it may increase inequality and neglect poverty alleviation. Tax incentives favor higher earners and consumption taxes rose, risking broader socio-economic disparities with 20% of the population still in poverty.

Nepal introduced a Clean Infrastructure Investment Fee replacing excise duty on electric vehicles, ranging from 2.5% to 130% of customs value, significantly raising EV prices by Rs200,000 to over Rs10 million. Industry stakeholders criticized the steep tax hikes and uncertainty as a threat to the country's clean transport transition.

Prime Minister Balen Shah stated a 5 percent value-added tax (VAT) on electricity usage above 50 units will fund the expansion and upgrading of Nepal's electricity infrastructure, including transformers, transmission lines, and substations nationwide.

The 2026-27 budget imposes a final Capital Gains Tax on listed securities with increased rates for short-term and long-term investors to modernize the Nepal Stock Exchange and attract foreign investment. Experts praised tax clarity but raised concerns about inequities and systemic issues in the tax structure.

Despite surplus banking liquidity of over Rs1.4 trillion and strong remittance inflows, Nepal's 2026-27 budget introduces investment reforms but lacks effective measures to utilize excess funds and stimulate private sector investment.

Nepal increased annual income tax rates for rental vehicles, with higher fees for small cars, trucks, heavy machinery, and electric vehicles. EV-specific tax brackets were introduced, ranging from Rs4,000 to Rs9,500 depending on motor power.

Nepal's electric vehicle tax based on motor peak power faces issues due to lack of testing facilities and certified labs, causing disputes between importers and regulators. The government plans to establish a central EV testing center and implement digital verification systems to improve transparency.

The government announced a Rs2.12 trillion budget for fiscal year 2026-27 prioritizing infrastructure expansion, tax reforms with increased exemption to Rs1 million for the middle class, and targeting 7% economic growth amid concerns about rising foreign and domestic debt levels.

Customs duty on electric vehicles in Nepal will be based on vehicle value rather than motor capacity starting fiscal year 2026/27, accompanied by a Clean Infrastructure Investment charge to support domestic EV production and battery management. Excise duties on cigarettes, liquor, and beer were raised, and gold customs duty doubled to 20 percent.

Nepal allocated Rs 114.02 billion for energy, water resources, and irrigation in the 2026/27 fiscal year, targeting 1,040 MW electricity addition including 670 MW hydropower and 370 MW solar projects. The Electricity Authority will be restructured into three companies covering production, transmission and distribution, and trade.

The government announced a NPR 21.24 trillion budget for fiscal year 2083/084 emphasizing a 10% salary increase with performance incentives for civil servants, infrastructure projects including NPR 17.64 billion for the Kathmandu-Terai Expressway, and reforms such as embassy closures.

Nepal announced plans to develop a knowledge-based economy focused on AI, including establishing the country's first Sovereign AI Compute Center in Syuchatar, Kathmandu, and initiatives to attract Nepali AI researchers abroad through fellowships.

Nepal reduced the overall agricultural budget to NPR 46.92 billion for fiscal year 2083/84 despite increasing fertilizer allocation to NPR 32.46 billion. Subsidies were introduced for large farms and agro-processing industries received a 10-year income tax exemption.

Nepal plans to develop a sovereign wealth fund and focus on AI, clean energy, and digital infrastructure, establishing an AI factory and sovereign AI compute centre to support startups and industrialists, aiming to become a regional technical hub.

Finance Minister Swarnim Wagle allocated Rs218.30 billion to the education sector for fiscal year 2026-27, focusing on innovation-oriented and skill-based education from school through university levels, including Open University opportunities for Nepalis abroad.

The 2026-27 budget focuses on Nepal's graduation from UN least developed country status with reforms including health insurance expansion targeting 90% coverage, strengthening Nepal Drugs Limited, constructing 1,000 km of blacktopped roads, 275 permanent bridges, and Kathmandu-Tarai/Madhesh Fast Track development.

The budget includes plans to establish a sovereign wealth fund utilizing foreign currency reserves and proposes Nepal Telecom divestment leaving the government with a 66% stake, alongside energy sector reforms with immediate power purchase agreements below 10 MW projects.

Finance Minister Swarnim Wagle unveiled the 2026-27 budget featuring a new hedge fund, legal reforms to stimulate foreign capital inflows, and a tax dispute settlement scheme to ease tax litigation. These measures aim to support consumers, industries, and enable Non-Resident Nepalis to invest in the secondary securities market.

Finance Minister Swarnim Wagle presented the 2026-27 fiscal year budget in federal parliament, announcing personal income tax exemptions for individuals earning up to Rs1 million annually and administrative ministry budget reductions.

Finance Minister Swarnim Wagle prepared to present Nepal's annual budget for fiscal year 2083/84, with an estimated total exceeding NPR 21 trillion, reflecting increased economic planning and development goals.

Nepal's national budget grew 54% over nine years, increasing from Rs. 12.78 Kharba in 2074/75 to Rs. 19.64 Kharba in 2082/83 amid rising public spending and fiscal challenges. Budget growth was uneven, reflecting economic stresses including the COVID-19 pandemic.

Nepal's Finance Minister Dr. Swarnim Wagle planned to unveil the national budget for fiscal year 2083/84 on Republic Day, aiming to prioritize employment-generating sectors and private sector growth. The budget ceiling was approximately Rs 18 Kharba 90 arba, with a focus on transformative development amid limited resources.

Nepal's Economic Survey 2025-2026 reports a significant decline in community school enrollment and an accelerated shift towards private education due to school mergers. In contrast, public health facilities rapidly expanded, improving key health indicators.

Nepal's Department of Railways sought international consultants to prepare a detailed project report for a 27.5 km electric rail system in Kathmandu Valley, aiming to reduce congestion and pollution. The project includes planning five electrified railway routes totaling 77.28 km with elevated and underground tracks.

Finance Minister Dr. Swarnim Wagle presented the Economic Survey for fiscal year 2025/26 to Nepal's Federal Parliament and introduced key legislative proposals including the Alternative Development Finance Mobilization Bill 2082.

Nepal proposed a NPR 51.14 billion budget for agriculture in fiscal year 2083/84, allocating 54.74% for fertilizer subsidies and NPR 2.80 billion for agricultural research. The budget aims to support modernization and insurance initiatives despite a decrease from the previous year.

The Nepalese government finalized preparations for the fiscal year 2083/84 budget, focusing on private sector-friendly policies, economic reforms, and infrastructure development to drive high economic growth and employment.

Experts advocated constructing a sovereign AI compute center leveraging Nepal’s abundant hydropower to ensure technological sovereignty, boost economic growth, and reduce reliance on foreign AI infrastructure.

Ten parliamentary committees met in Kathmandu to discuss governance issues including budget suggestions for fiscal year 2083-84, human rights in prisons, infrastructure challenges, disaster management, and gender inequality.

Health Secretary Bikash Devkota announced strict measures against misuse and fraud in Nepal's health insurance program, targeting a 50% reduction in expenses through legal enforcement and system revisions. Plans include revising insurance rates and restructuring the scheme in the upcoming budget.

Nepal aims to increase health sector budget allocation from under 5% to 8% of the national budget by 2026 to improve healthcare, insurance coverage, and emergency services. The move addresses low budget utilization and high out-of-pocket health expenses for households.

By the end of Baisakh 2025/26, Nepal's government spent 59.75 percent of its budget, with Rs 1.17 trillion out of Rs 1.96 trillion allocated used. Recurrent expenditure reached 68.98 percent utilisation while capital expenditure remained low at 27.91 percent, and revenue collection achieved around 66 percent of targets.

Opposition parties demanded Speaker Dol Prasad Aryal compel Prime Minister Balendra Shah to attend parliamentary sessions amidst controversy over his repeated absence during policy debates. The Speaker cited House regulations permitting the prime minister to designate a minister to respond in his absence.

The National Assembly of Nepal approved the government’s policies and programs for fiscal year 2026/27 following Finance Minister Dr Swarnim Wagle's clarifications and deliberations led by NA Chairman Narayan Prasad Dahal.

Opposition parties in Nepal's parliament disrupted sessions demanding Prime Minister Balendra Shah's presence to discuss government policy, causing multiple adjournments. Finance Minister Swarnim Wagle tabled the policy and program amid continued opposition demands.

The increasing use of generative AI by legal professionals in Nepal's judiciary to draft legal documents has raised issues related to data privacy, accuracy, and ethical responsibilities under existing laws. Concerns focus on potential content fabrication, misquoting laws, and violations of client data protection as guaranteed by Nepal's Constitution.

At the Kantipur Economic Summit 2026, business leaders called for stable policies, consistent regulations, and stronger government-private partnerships to encourage investment, emphasizing needs in tax stability and digital infrastructure for the growing IT sector.

The government announced aims to transform Nepal into a digital, green, and self-reliant economy targeting 7% growth, establishing IT as a national strategic industry with digital parks and AI integration, expanding electricity production to 30,000 MW, and launching the Nepal Carbon Authority to support carbon trading.

The Rastriya Swatantra Party began preparing a discussion paper on constitutional amendments to reform Nepal's provincial structure, aiming to reduce costs and improve coordination between provincial and local governments.

The Nepal Federation of Indigenous Nationalities urged the Communist Party of Nepal to ensure indigenous peoples' rights and equal participation in state affairs and policymaking, highlighting ongoing challenges despite federalism.

Former Prime Minister Prachanda urged the Rastriya Swatantra Party government to responsibly manage its parliamentary majority, pursue constitutional amendments for national unity and marginalized representation, and address forced evictions through land ownership and livelihood programs.

The Communist Party of Nepal (UML) appointed Padma Aryal as the Deputy Leader of its parliamentary party, nominated by party leader Ram Bahadur Thapa (Badal).

Finance Minister Dr. Swarnim Wagle informed that the principles and priorities of the upcoming fiscal year’s budget would be presented in the parliamentary session on Thursday. Suggestions from parliamentarians will be incorporated into the budget formulation.

Inflation in Nepal rose to 4.47 percent as of mid-April 2026, with remittance inflows increasing by 39.1 percent in the first nine months of fiscal year 2025/26. Gross foreign exchange reserves stood at Rs 3,494.73 billion, adequate to cover 18.4 months of imports.

The House of Representatives convened to discuss the government's policy and program, with members expressing views based on party representation, ahead of the 2026/27 fiscal year budget presentation.

Nepal unveiled a comprehensive reform agenda targeting 7 percent average annual economic growth over the next decade, focusing on anti-corruption, digital economic transactions, tax reforms, and investment mobilization challenges.

Nepal's 2026/27 policy aims for 7% annual GDP growth focusing on IT, hydropower, tourism, agriculture, and green industrialization, but lacks clear strategies and institutional reforms, posing risks to effective execution.

President Ramchandra Paudel presented Nepal's 2026/27 Policy and Program, detailing a 100-point agenda focusing on political stability, economic reform, governance, infrastructure, agriculture, education, healthcare, and anti-corruption measures.

President Ram Chandra Paudel presented Nepal's Policy and Program for fiscal year 2026/27, outlining a 100-point agenda focusing on political stability, economic reform, governance, infrastructure, agriculture, education, healthcare, and anti-corruption. The government commits to political stability, zero tolerance for corruption, and consensus-driven constitutional amendments.

Prime Minister Balen Shah exited the parliament meeting hall before President Ramchandra Paudel completed the presentation of the government's policy and program for fiscal year 2026/27.

President Ram Chandra Paudel presented the fiscal year 2083/84 policy focusing on transforming Nepal into a digital and technology-oriented economy, promoting IT as a national strategic industry and implementing integrated border management with automated surveillance.

The government announced a National Industrial Policy to classify industries and offer promotional packages, including an Investment Express policy guaranteeing business registration and permits within 30 days and a 'Nepal Investment Visa' for significant foreign investors.

Nepal's inflation rate reached 4.47 percent year-over-year in mid-April 2026, up from 3.39 percent the previous year. Urban areas experienced higher inflation at 4.74 percent compared to 3.71 percent in rural areas, driven by price increases in cooking oil, fruits, and vegetables.

Nepal's gross foreign exchange reserves increased by 30.5 percent to Rs 3,494.73 billion in mid-April 2026, sufficient to cover 18.4 months of imports. Reserves rose in US dollar terms by 20.8 percent to 23.55 billion, with Nepal Rastra Bank holdings up 27.7 percent to Rs 3,082.41 billion.

The joint session of Nepal's Federal Parliament commenced with President Ramchandra Paudel addressing the parliament at Singha Durbar. The President presented the government's policy and program for the fiscal year 2026/27 as part of constitutional requirements.

The joint session of Nepal's Federal Parliament began with President Ramchandra Paudel addressing lawmakers at Singha Durbar as part of constitutional requirements for the government's policy presentation.

The government announced plans to promote Nepal as a technology hub with expanded IT exports, digital infrastructure, AI and green computing initiatives, and remote work legal frameworks to enhance tech employment.

The Federal Parliament's budget session commenced, with President Ramchandra Paudel preparing to present the government's policy and program and several ordinances as constitutionally mandated.

President Ramchandra Paudel presented the government's policies for fiscal year 2026/27 emphasizing economic modernization through digitalization, technology-driven employment, investment reforms, and governance restructuring including remote work legal frameworks and a national apprenticeship programme.

The Independent Power Producers' Association of Nepal submitted 53 budget proposals to the government for fiscal year 2083/84, focusing on reopening stalled electricity purchase agreements and accelerating hydropower development to achieve a 30,000 MW target. They also urged private sector participation in domestic and cross-border electricity trade and ending the single-buyer system.

Nepal aims to shift from a labor-based economy to a digital and service-oriented model, promoting IT exports, digital parks, and financial incentives to tech industries as part of economic reform.

The winter session of the House of Representatives commenced at the new parliament building in Singha Durbar, Kathmandu.

The Council of Ministers approved President Ramchandra Paudel's planned address to the joint sitting of Federal Parliament, outlining the government's policies and programs for fiscal year 2026/27.

Prime Minister Balen Shah convened a cabinet meeting at Singha Durbar to approve the government's policy and program for the upcoming financial year 2026/27, to be presented by President Ramchandra Paudel in parliament.

The Federal Parliament's budget session began with a joint meeting at 4:00 pm where President Ramchandra Paudel was scheduled to present the government's policies and programmes for the new fiscal year.

Over 5,100 suggestions were submitted via the Prime Minister's Office public portal, covering budget priorities and policy inputs in sectors such as education, health, economy, infrastructure, and environment.

The Office of the Prime Minister and Council of Ministers launched a digital platform for citizens and experts to submit recommendations for the 2026/27 budget formulation, promoting transparent and participatory governance.

The House of Representatives published a tentative agenda for the session from Vaishakh to Ashar, including the government’s annual policy program, budget presentation, and discussions on various bills.

Bichuten Data Vault announced Nepal's first Tier IV Hyper Scale Data Center in Kathmandu and Birgunj, aiming to enhance digital infrastructure and AI sovereignty using green hydropower, with facilities guaranteeing 99.995% uptime.

The government recommended convening a federal parliament session on May 11 including both the National Assembly and House of Representatives as decided in a Cabinet meeting.

Stakeholders at the Pre-Budget ICT Discourse 2083 called for clear ICT policies, higher budget allocation, and tax reforms to advance Nepal's digital economy. They highlighted challenges including policy ambiguity, high taxes, weak infrastructure, and limited startup support, and emphasized public-private collaboration and fintech and AI education enhancement.

Minister Vikram Timilsina highlighted the government's focus on building a secure, inclusive, and sustainable digital ecosystem, implementing the Digital Nepal framework to improve public services and promote digital transformation.

Nepal Digital Infrastructure Company, a subsidiary of Nepal Electricity Authority, became fully operational to transform the IT and telecommunications sector by providing shared infrastructure to reduce internet costs and improve service quality.

The government released the Economic Status Paper 2083 highlighting slow growth, rising public debt at 43.8% of GDP, and heavy reliance on remittance, calling for deep structural transformation toward electricity production and IT exports.

Nepal's government plans to transform the country into a global hub for data centres and artificial intelligence powered by hydroelectric energy, highlighting regulatory gaps and environmental concerns needing stable policies.

Officials announced the 2026/27 budget will focus on long-term reforms, good governance, and creating multiplier effects to boost Nepal's economy, encouraging provincial and local self-reliance in resources.

Nepal's IT industry urged expansion of double taxation avoidance agreements and proposed a 1% corporate tax rate for registered IT companies for 10 years to attract global investment and foster innovation. Additional recommendations included an 8% export rebate and legal reforms in IT and cybersecurity laws to promote domestic cloud infrastructure.

Nepal's government announced an 18-point National Commitment plan focusing on economic stability, governance reforms, agriculture, tourism, energy, and infrastructure to achieve inclusive growth and middle-income status.