KATHMANDU: The government has announced a total budget of Rs 1.96 trillion for the upcoming fiscal year 2025/26.
Finance Minister Bishnu Prasad Paudel made the announcement during a joint session of the Federal Parliament on Thursday.
According to Minister Poudel, the budget has been allocated across three major areas: Rs 1.18 trillion has been set aside for current expenditure, Rs 477.89 billion for capital expenditure, and Rs 375.24 billion for financial management.
Here are the major announcements:
Rs 211.17 billion for education
The government has allocated Rs 211.17 billion for the education sector in the upcoming fiscal year through the Ministry of Education, Science and Technology. The budget includes a provision of Rs 10.19 billion for the school mid-day meal program, ensuring continued nutritional support for students. The government also announced plans to encourage the merger of schools to improve efficiency and resource management.
Rs 95.81 billion to Health Ministry
The government has allocated Rs 95.81 billion to the Ministry of Health and Population in the budget for the upcoming fiscal year 2025/26.This substantial budget aims to strengthen the health sector, improve public health services, and ensure better healthcare access for all citizens across the country.
The government has allocated Rs 6.8 billion for the Ministry of Youth and Sports in fiscal year 2082/083, nearly doubling last year’s Rs 3.5 billion allocation. In the budget, Rs 420 million has been earmarked for the construction of cricket stadiums in Mulpani (Kathmandu), Girija Prasad Koirala (Morang), Fapla (Kailali), and Siddhartha (Rupandehi). Rs 400 million has been allocated for upgrading the Tribhuvan University Cricket Ground in Kirtipur.
Rs 241.81 billion for provincial and local levels
The government has allocated Rs 241.81 billion for provincial and local governments in the upcoming fiscal year 2082/83. Based on the recommendation of the Natural Resources and Finance Commission, Rs 60.66 billion will be transferred to the provincial governments, and Rs 88.97 billion to the local levels as revenue sharing. Additionally, conditional grants amounting to Rs 241.81 billion have been allocated—of which Rs 30.35 billion is designated for the provinces and Rs 211.46 billion for the local levels, according to Minister Poudel.
Nepalis to be allowed to invest abroad
The government is set to permit Nepali industries to invest abroad. In his budget speech on Thursday, Finance Minister Bishnu Paudel announced that Nepali exporters will be allowed to invest up to 25 percent of their total export earnings overseas. “Permission will be granted to establish processing plants either abroad or in Nepal by exporting semi-processed goods. For this purpose, up to 25 percent of export income can be invested abroad,” he said. Minister Poudel also stated that arrangements will be made to ensure that 50 percent of the profits earned from such foreign investments are repatriated to Nepal. The Investment Board will be responsible for approving these outbound investments.
Rs 148 Billion for fiscal equalization grants
The government has allocated Rs 148 billion for fiscal equalization grants in the upcoming fiscal year 2025/26. Of the total amount, Rs 60.66 billion will be transferred to provincial governments and Rs 88.97 billion to local governments under fiscal equalization. In addition, the government has earmarked Rs 30.35 billion in conditional grants for provinces and Rs 211.46 billion for local governments.
Rs 28.82 billion for chemical fertilizer subsidy
The government has allocated Rs 28.82 billion for subsidies on chemical fertilizers in the upcoming fiscal year. Nepal imports all of its chemical fertilizer needs from foreign countries. The government has been providing billions of rupees annually as subsidies to make fertilizers affordable for farmers. In the current fiscal year, Rs 27.95 billion had been allocated for fertilizer subsidies.
Govt allocates Rs 13 billion to tourism and aviation
The government has allocated Rs 13.28 billion to the Ministry of Culture, Tourism, and Civil Aviation in the upcoming fiscal year’s budget, signaling a strong focus on boosting the tourism and aviation sectors.
Highlighting key infrastructure projects, Minister Paudel emphasized the fast-tracking of Nijgadh International Airport construction to address the growing passenger pressure at Tribhuvan International Airport.
Rs 10.14 billion allocated for Ministry of Industry, Commerce and Supplies
The government has allocated Rs 10.14 billion to the Ministry of Industry, Commerce and Supplies for the upcoming fiscal year 2025/26.
No change in taxes on EVs
The government has decided to keep the existing customs and other taxes on electric vehicles (EVs) unchanged in the new fiscal budget for 2025/26. Presenting the annual budget on Wednesday, Finance Minister Bishnu Prasad Paudel stated that taxes on EVs remain the same to continue encouraging the adoption of environmentally friendly transport. Electric vehicle assembly industries, as well as private sector tunnel boring machine imports, will also face only 1% customs duty. VAT on digital payment systems has been scrapped, and advance income tax on fruits and vegetables has been lifted.
Rs 3.56 billion Postal Highway
The government has allocated Rs 3.56 billion for the construction and development of the Postal Highway in the upcoming fiscal year’s budget.
Rs 1.55 billion for industrial infrastructure development
The government has allocated Rs 1.55 billion for the development of industrial infrastructure in the upcoming fiscal year. Minister Paudel also informed that the Ministry of Industry, Commerce and Supplies has been allocated a total of Rs 10.14 billion for the next fiscal year.
Rs 109 billion for social security benefits
The government has allocated Rs 109 billion for social security allowances targeting senior citizens and other vulnerable groups in the upcoming fiscal year. The allocated amount is slightly lower than the current fiscal year’s budget of Rs 116 billion for the same purpose. According to Minister Paudel, the government spent more than Rs 108.81 billion on social security allowances during the last fiscal year.
Agriculture Ministry allocated Rs 57.48 billion
Ministry of Agriculture and Livestock Development has been allocated a total budget of Rs 57.48 billion for the upcoming fiscal year 2025/26. Presenting the annual fiscal plan in the Federal Parliament, Minister Paudel said the allocation is aimed at enhancing agricultural productivity, promoting modern farming practices, and ensuring food security across the country.
Govt to establish clear policies for carbon trading and environmental conservation
The government has announced plans to introduce clear policy measures for carbon trading in the international market. Minister Paudel also highlighted the importance of protecting melting mountains and drying glaciers, promising necessary arrangements for their conservation. He assured facilitation for project implementation on conservation land to support environmental protection efforts.
Govt gives high priority to reservoir projects
Finance Minister Bishnu Prasad Paudel, while presenting the budget for the fiscal year 2025/26, said reservoir-based projects have been given high priority. He also mentioned that a feasibility study on green hydrogen will be conducted as part of the government’s focus on clean energy. The construction of the Tamakoshi-5 hydropower project will be accelerated, and the Detailed Project Report (DPR) for the Pancheshwar project has been finalized, with construction work set to begin soon.
Govt to provide low-interest loans up to Rs 2 million to youth entrepreneurs
The government has announced a new initiative to offer low-interest loans to young entrepreneurs. Minister Paudel stated that educated youth will be able to access loans ranging from Rs 200,000 to Rs 2 million at a subsidized interest rate of 3 percent. The loans will be granted based on educational qualifications, business registration certificates, and project proposals.
Govt announces free visas for foreign students
The government has announced that foreign students coming to Nepal will be granted free visas as part of its effort to promote the country as an educational destination. In addition, multiple-entry visas will be issued to the parents of foreign students.
Comment