KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest developments reflect a mixed economic and governance landscape in Nepal. Finance Minister Bishnu Poudel’s reform-driven budget aims for 6% growth through fiscal discipline, credit expansion, and private sector incentives, though critics like ex-minister Sharma and economist Paudel highlight structural shortcomings, weak production support, and informal sector dominance.
While business groups like HAN welcome tourism-focused tax relief, and initiatives like the potato summit and poultry seminar seek to strengthen agriculture, transport protests signal policy discontent.
Regulatory moves—like dry fruit duty cuts and ride-sharing rules—target efficiency and formalization, as natural disruptions and digital ambitions underline Nepal’s ongoing struggle to balance development with resilience and reform.
Finance Minister Poudel targets 6% growth
Finance Minister Bishnu Poudel has projected a 6% economic growth for the next fiscal year, calling the new budget realistic and reform-oriented. Addressing an event in Kathmandu on Saturday, he said the budget was crafted with careful resource planning and financial discipline.
Stressing the importance of implementation, Poudel added that a past growth rate of 7.5% makes the current target feasible. He also addressed public debt and revenue issues, emphasizing resource mobilization, private sector engagement, support for youth entrepreneurs, and reforms in digital banking and eco-friendly mining practices.
Former Finance Minister Sharma calls for structural reform, criticizes gaps in budget
Ex-Finance Minister Janardan Sharma has described the new budget as “realistic but lacking,” pointing out gaps in supporting agriculture and production. Speaking at a NAFIJ-hosted post-budget discussion, he welcomed some policy directions but stressed the need for long-term structural change.
Sharma criticized the budget for failing to back farmers adequately and noted continued overreliance on imports and weak capital spending. He urged the government to focus on production, labor mobilization, and investments in key sectors like agriculture, hydropower, and tourism to promote inclusive growth.
Transport operators stage phased protests, threaten nationwide halt
Public transport operators have launched phase-wise protests starting today, briefly blocking the Ring Road in Kathmandu with their vehicles under a “Save Public Transport” campaign. Waving black flags, transporters from all seven provinces joined the action and issued a seven-point demand.
They warned of a nationwide shutdown if the government does not respond by the 19th. The protest is led by several transport organizations, including the Nepal Transport Entrepreneurs Federation, who say recent government decisions are undermining the public transport industry and demand immediate dialogue and policy correction.
Government introduces credit push and loan reform to boost lending
To address sluggish credit growth and low lending activity, the government has proposed a set of reforms in the 2025/26 budget, including plans to expand credit and manage bad loans. The measures include working with Nepal Rastra Bank to establish an Asset Management Company to handle non-performing loans.
Additional steps include refinancing, recapitalization, and interest or penalty waivers for struggling businesses. The budget also announces plans to set up a neobank to promote digital, branchless banking. These initiatives aim to enhance liquidity, restore business confidence, and modernize the financial sector.
Gandaki enforces RS/SD logo rule for ride-sharing; operators raise objections
The Gandaki Province government has made it mandatory for all ride-sharing vehicles to display identification logos—RS for ride-sharing two-wheelers and SD for self-drive cars—under its newly issued Ride-Sharing (Regulation and Management) Rules 2082. The RS must appear in red within a black circle.
This move aims to better regulate and identify app-based transport services. However, transport entrepreneurs have objected, particularly to the rule allowing red-plate private vehicles to operate under ride-sharing. The government says the policy was developed through consultations, making Gandaki the first province to formally recognize ride-sharing in law.
Economist Paudel sees budget as private sector-friendly, warns of structural flaws
Economist and former Planning Commission member Dr. Ramesh Paudel praised the budget’s pro-private sector stance but warned of persistent structural and revenue challenges. At the same NAFIJ event, he noted that although the budget had political support, it lacked bold policy shifts.
With half the economy still informal, Paudel pushed for formalization to boost tax revenue. He also advocated for increased capital expenditure, better fiscal discipline, and stronger investment in health and education to prevent growing domestic debt risks.
HAN welcomes tax relief and tourism focus in new budget
The Hotel Association Nepal (HAN) has expressed support for the fiscal year 2025/26 budget, particularly welcoming the decision to grant income tax and electricity tariff exemptions to hotels.
HAN also praised the government’s plans to upgrade highways, expand airports, reform Nepal Airlines, and develop heritage trails. It further appreciated the budget’s provisions aimed at promoting varied forms of tourism—including cross-border travel and events infrastructure. However, the association called for the removal of luxury and VAT charges on domestic airfares to enhance competitiveness. HAN stressed the importance of effective implementation and active private sector participation.
Second potato summit outlines strategy for boosting the sector
The Second Potato Summit 2025, held in Kathmandu, focused on strengthening Nepal’s potato industry through improvements in seed supply chains, processing, market access, and private investment.
Organized by NICCI in collaboration with the Ministry of Agriculture and Livestock Development (MoALD) and FAO, the event brought together policymakers, experts, and industry leaders. Key topics included policy updates, expansion of potato farming zones, high-altitude cultivation, agricultural insurance, and credit access.
India pledged cooperation in seed development, while FAO emphasized potatoes as critical for food security and rural livelihoods.
Government removes excise tax on dry fruits to curb smuggling
To tackle illegal imports and reduce market manipulation, the government has eliminated excise duties on 12 types of dry fruits—such as cashews, almonds, and walnuts—effective from fiscal year 2025/26.
Previously, duties ranged from 5 to 15 percent, creating incentives for smuggling. By removing 23 HS codes from the Financial Bill, the move aims to reduce prices and encourage legal imports. Nepal’s dry fruit imports this year exceeded Rs 2.5 billion, with the majority comprising cashews, almonds, and walnuts.
Nepal and India experts discuss sustainable poultry growth in Chitwan
Experts from Nepal and India met in Chitwan on Thursday to explore strategies for sustainable poultry development and economic benefits. The seminar, jointly hosted by India’s Poultry Review and the Nepal Veterinary Poultry Association, featured seven expert-led sessions.
A total of 103 participants—including researchers, business leaders, and policymakers—attended. Key issues discussed included eco-friendly feed technologies and disease prevention. Participants noted the event’s role in fostering regional cooperation and knowledge sharing in the poultry sector.
Flood cuts off East-West Highway in Jhapa after road diversion collapses
Continuous rainfall has disrupted the East-West Highway in Kalikhola, Mechinagar-6, Jhapa, after floodwaters destroyed a temporary road diversion under the Asian Highway project. Transport has been halted, though an alternative route is in use. Authorities are working on restoring the road.
According to the Department of Hydrology and Meteorology, heavy rainfall has affected several districts including Jhapa, Ilam, Sunsari, and Dhankuta. Residents have been warned of flood risks in major rivers such as Mechi, Kankai, and Ratuwa.
Nepal committed to Digital Nepal Framework, says minister in Tokyo
Minister for Communications and Information Technology, Prithvi Subba Gurung, reaffirmed Nepal’s dedication to the Digital Nepal Framework during his remarks at the Asia-Pacific Telecommunications Ministerial Meeting in Tokyo.
He emphasized the need for a secure, inclusive digital ecosystem, highlighting the importance of robust IT infrastructure, innovation, and public empowerment. Gurung expressed interest in deeper collaboration with the Asia-Pacific Telecommunity (APT) for technological transfer, training, and policy development.
Karnali Highway to shut for four days for repair works
The Karnali Highway will be completely closed from June 3 to 7 to carry out repairs on a particularly narrow and difficult section between Kalalu and Lalighat. The closure was finalized at a meeting held by the District Administration Office and will primarily impact travel in Kalikot, Bajura, and Humla.
Assistant Chief District Officer Janak Sharma stated that vehicles will be stopped at designated points during the repair period. Nearly one kilometer of roadway will be reconstructed during the closure.
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