KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Finance Minister Bishnu Prasad Paudel has unveiled a Rs 1.964 trillion budget for the fiscal year 2082/83 (2025/26), with a strong focus on inclusive economic growth, infrastructure development, technological advancement, and improved public service delivery.
The budget allocates Rs 1.181 trillion for recurrent expenses and Rs 408 billion for capital expenditures, while Rs 582.83 billion will be transferred to provincial and local governments through revenue sharing and grants. Major sectoral allocations include Rs 211.9 billion for education and Rs 10 billion for the health insurance program, with an additional Rs 1 billion set aside to address insurance claim delays through third-party settlements.
The government aims to generate an extra 942 MW of electricity, reaching a total capacity of 4,800 MW, and plans to build 731 km of transmission lines. Notably, the private sector has been declared a key engine of economic growth, and initiatives like the Podway transport system and the transformation of state-owned enterprises into public limited companies have been announced.
Despite financial constraints preventing a salary hike for civil servants, the dearness allowance has been raised by Rs 3,000. Meanwhile, the budget lacks major new initiatives for the industry ministry and shows underwhelming spending performance, with only 66% of the current fiscal year’s budget utilized and revenue collection lagging at 68% of the target.
Other highlights include incentives for airlines at regional airports, a push for urban-rural integration through four development models, and continued 4G expansion in place of a feasible 5G rollout. However, challenges persist with declining exports of ginger and palm oil, fertilizer shortages in Bardiya, and ongoing financial irregularities, particularly in Lumbini Province.
Stakeholders like NICCI have raised concerns about central bank regulations, and banks are now required to maintain higher daily cash reserves. Overall, the budget reflects a balancing act between ambitious goals and fiscal limitations.
Finance Minister presents Rs 1.964 trillion budget for fiscal year 2082/83
Finance Minister Bishnu Prasad Paudel has presented a budget of Rs 1.964 trillion for the fiscal year 2082/83 (2025–26) in the Federal Parliament. Of the total budget, Rs 1.181 trillion has been allocated for recurrent expenditure, and Rs 408 billion for capital expenditure, aimed at infrastructure and development works.
Rs 582.83 billion to be transferred to provinces and local governments
The federal government has announced it will transfer Rs 582.83 billion to provincial and local levels in FY 2082/83 through revenue sharing and various grants. Finance Minister Paudel said the allocations include Rs 60.66 billion to provinces and Rs 88.97 billion to local units as equalization grants, based on recommendations from the National Natural Resources and Fiscal Commission.
Finance Minister presents economic survey for FY 2081/82
Finance Minister Bishnu Prasad Paudel presented the economic survey for the current fiscal year in Parliament, projecting a national economic growth rate of 4.61 percent. All provinces, except Madhesh, Koshi, and Sudurpaschim, are expected to exceed the national average. The GDP is estimated at Rs 61.07 trillion, with agriculture contributing 25.16 percent. Inflation for the year is projected at 4.72 percent.
New budget outlines five goals and seven priority areas
While presenting the national budget for fiscal year 2082/83, Finance Minister Paudel outlined five main objectives: inclusive economic growth for poverty alleviation, promotion of entrepreneurship and investment for job creation, technology-based economic enhancement, social justice through welfare programs, and improved public service delivery with good governance. He also identified seven key priorities to drive these objectives forward.
942 MW electricity to be added, installed capacity to reach 4,800 MW
The government aims to generate an additional 942 megawatts of electricity in the next fiscal year, bringing Nepal’s total installed capacity to 4,800 MW. Plans also include constructing 731 kilometers of transmission lines to improve nationwide electricity distribution.
Third-party settlement to clear pending health insurance claims
The government has set aside Rs 1 billion to strengthen the health insurance scheme in FY 2082/83. Finance Minister Paudel said third-party settlement will be introduced to expedite pending insurance claim payments, improve reimbursement timelines, and ensure better management of the program.
Rs 211.9 billion allocated for education in upcoming fiscal year
The government has earmarked Rs 211.9 billion for the education sector in FY 2082/83, aiming to promote broad access to quality education and improve the sector’s overall development.
Private sector to be positioned as economic growth engine
The government has declared the private sector a pillar of economic development in Nepal. Finance Minister Paudel said the administration will adopt recommendations from the High-Level Economic Reform Commission and focus on financial diversification to meet investment needs tied to Nepal’s development goals and SDG targets.
Podway system to be promoted as new public transport model
The government has announced plans to advance the “Podway” transport system as a modern urban mobility solution. A feasibility agreement has already been signed in Koshi Province, and the initiative was also promoted during the Investment Summit in May 2025.
Senior citizen allowance age limit raised to 70 years
The government has revised the eligibility age for senior citizen allowances from 68 to 70 years. However, people from Dalit, remote, and marginalized communities will continue to receive the benefit from age 60. Finance Minister Paudel said the change follows recommendations from the High-Level Economic Reform Commission.
No salary hike for civil servants; dearness allowance raised by Rs 3,000
In the federal budget for fiscal year 2082/83, the government has not approved any salary increases for civil servants. However, the monthly dearness allowance has been increased by Rs 3,000, making it Rs 5,000. Presenting the budget in Parliament, Finance Minister Bishnu Prasad Paudel said financial constraints prevented a salary hike despite pressure from employee unions. He also shared that the government will retain ownership of lands held by public enterprises as part of reform efforts.
Airlines operating at Pokhara and Bhairahawa to receive incentives
The government has announced incentives for airline operators flying to Pokhara and Bhairahawa international airports. Finance Minister Paudel said tax exemptions and other benefits are part of efforts to boost air connectivity. Rs 500 million has also been allocated for upgrading domestic airport infrastructure.
Banks now required to maintain 90% daily cash reserve
Nepal Rastra Bank has revised its directives, requiring banks and financial institutions to maintain 90 percent of the statutory cash reserve on a daily basis, up from the previous 70 percent. The mandatory reserve remains at 4 percent of total deposits, but compliance enforcement has been tightened for class ‘A’, ‘B’, and ‘C’ institutions.
Government spends under 66% of annual budget so far
With only 1.5 months left in the current fiscal year, the government has spent just 66% of its Rs 1.8603 trillion budget. Only Rs 1.2923 trillion has been used, leaving Rs 631.06 billion to be spent at a daily average of Rs 14.02 billion. Revenue collection has also lagged, with just Rs 967 billion raised out of a Rs 1.419 trillion target—only 68% of the goal.
Government to allocate Rs 10 billion for health insurance
The upcoming budget has earmarked Rs 10 billion for the Health Insurance Program. The Ministry of Health was initially given a budget ceiling of Rs 83 billion, down from last year’s Rs 86 billion. However, after assessing rising costs and the funding gap in health insurance, the ceiling was increased by Rs 13 billion, bringing it to Rs 96 billion.
No major programs for industry ministry in new budget
The Ministry of Industry has revealed that no significant new initiatives are included in the FY 2082/83 budget. Only 0.4% of the total budget has been allocated to the ministry. According to ministry spokesperson Jitendra Bahadur Basnet, the constrained ceiling prevented introduction of transformative industrial projects, despite discussions with the Finance Ministry.
National Project Bank lists projects worth over Rs 920 billion
The National Project Bank has registered 1,327 projects with a combined value of over Rs 920 billion. These include 117 new projects, 89 ongoing ones, and 1,121 under review. The majority—1,141 projects—are small-scale, each worth up to Rs 30 million, while 79 projects fall within the Rs 30–50 million range.
NICCI raises concerns with central bank governor
A delegation from the Nepal–India Chamber of Commerce and Industry (NICCI), led by President Sunil KC, met newly appointed Nepal Rastra Bank Governor Dr. Bishwanath Paudel on Wednesday to present key concerns of Indian multinational companies operating in Nepal. The issues raised included difficulties in profit repatriation for foreign staff, complications in cross-border service payments, and inefficiencies in the single-window system.
Customs Department collects Rs 3.28 billion in a single day
On Jestha 14, the Department of Customs collected more than Rs 3.28 billion in a single day. The surge in revenue came as importers rushed to clear goods ahead of the budget, fearing higher customs and excise duties. A spike in vehicle imports—one of the highest taxed items—also significantly boosted revenue.
Ginger exports drop by over 50% in current fiscal year
Nepal’s ginger exports have declined sharply in the current fiscal year, falling by more than half. Previously, the country exported around Rs 1.25 billion worth of ginger annually. But data from the Department of Customs shows that only 3,161 tons valued at Rs 527.5 million were exported in the first ten months (Shrawan to Chaitra) of FY 2081/82.
State-owned enterprises to become public limited companies
In its budget for FY 2082/83, the government has proposed transforming state-owned enterprises into public limited companies and offering shares to the public. This policy aligns with recommendations from the High-Level Commission on Economic Reforms, which also advises raising capital through bond issuance.
Urban Development Ministry unveils four models to bridge rural-urban gap
The Ministry of Urban Development has introduced four development models to narrow the rural-urban divide. The primary model—Integrated Urban Development—aims to connect villages and towns through coordinated planning and deliver essential urban services such as roads, electricity, water, healthcare, and education to rural areas. The model also seeks to link rural products to urban markets.
Telecom companies say 5G rollout not yet feasible
Despite government announcements of a 5G rollout this year, major telecom providers Nepal Telecom and Ncell have said that the launch is currently not viable due to technical, financial, and operational limitations. Industry experts suggest that completing the 4G expansion should be the current focus before considering a 5G launch.
Agriculture Ministry cuts milk and ghee allowance for DDC staff
The Ministry of Agriculture and Livestock Development has ended the daily one-liter milk and monthly one-liter ghee allowance for employees of the Dairy Development Corporation (DDC). The decision was made to settle dues to dairy farmers and repay loans to the government. The ministry noted that similar austerity measures are taken in other loss-incurring public enterprises.
Illegal imports and reduced third-country trade hurt Biratnagar customs
Revenue at Biratnagar Customs has been declining for five consecutive years due to reduced trade with third countries and increased illegal imports from India. The office mainly depends on industrial raw material imports, but has seen sharp drops in goods like textiles, footwear, motorcycles, petroleum, MS billets, and crude oil.
Palm oil export decline tied to quality issues
Once Nepal’s top export product, palm oil has seen a sharp decline due to technical shortcomings and unethical practices by certain business groups. Analysts attribute the downturn to poor quality control and a profit-driven rush that ignored long-term sustainability, leading to the collapse of the sector’s export dominance.
Purwanchal Lube Oil reports Rs 651 million in nine-month sales
Purwanchal Lube Oil, established in 2001 and backed by former NADA President Krishna Prasad Dulal, reported Rs 651 million in sales during the first nine months of the current fiscal year. The company recorded Rs 787 million in sales in 2024, Rs 774 million in 2023, and Rs 753 million in 2022. It produces lubricants under the PLO, Star, Mega, and Suraksha brands.
Lumbini Province records Rs 4.57 billion in financial irregularities
The Office of the Auditor General has reported Rs 4.57 billion in financial irregularities in Lumbini Province, a 13.78 percent rise from last year. In FY 2080/81, audits revealed Rs 657.2 million in irregularities across 211 offices and agencies managing a combined budget of Rs 54.16 billion.
Bagmati Province prioritizes key sectors in budget plan
Bagmati Province has emphasized agriculture, tourism, education, employment, and infrastructure in its FY 2082/83 policy. Addressing the provincial assembly, Province Head Deepak Prasad Devkota highlighted the use of provincial rights and the implementation of a single-window system for infrastructure. The policy also ensures early budget commitments for multi-year plans.
Fertilizer shortage hits Bardiya despite early monsoon
Farmers in Bardiya are struggling with a shortage of urea and DAP fertilizers even as the monsoon begins earlier than usual. With 50,250 hectares under rice cultivation, farmers report annual fertilizer shortages during planting season have led to reduced yields, especially in rice-producing areas like Rajapur.
Prabhu Heli adds new Airbus helicopter to fleet
Prabhu Heli has expanded its fleet with a new H125 model helicopter from French manufacturer Airbus. The aircraft, with the call sign 9N-ANT, was selected for its safety, reliability, and high-altitude performance. According to Chairman Subash Amatya, the helicopter can carry five passengers and features modern technology suited for Nepal’s terrain.
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