KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The economic overview of Nepal reveals a mixed landscape of progress, challenges, and policy shifts. On the one hand, the country received a record Rs 1.445 trillion in remittances, underscoring its heavy reliance on foreign employment, with thousands of youths leaving daily for jobs abroad.
The new national budget projects a 6% growth rate and targets Rs 1.315 trillion in revenue, with a strong focus on boosting private investment, industrial productivity, and employment through infrastructure development, vocational training, and digital transformation—including the shift to digital national ID cards.
However, concerns persist as critical initiatives like the “Agriculture Investment Decade” have been sidelined, despite modest increases in agricultural allocations. While the IT sector welcomed tax incentives and clarity, and government investment in public institutions rose by 5.86%, returns in the form of dividends fell sharply.
Regulatory reforms and infrastructure commitments—such as completing the Postal Highway and developing industrial zones—aim to support sustainable growth.
Yet, sector-specific disruptions, like the drop in Agni Cement’s trade due to slow development and the transport strike in Gandaki over ride-sharing laws, reflect persistent friction in economic transition. Overall, the government’s strategy balances ambitious targets with structural reform, but its success will hinge on implementation efficiency and political consistency.
Nepal receives Rs 1.445 trillion in remittances last fiscal year
Nepal received Rs 1.445 trillion in remittances from foreign employment during the last fiscal year. According to Ram Pramesh Mandal, a program officer at SaMi-Helvetas Nepal, more than 7.2 million Nepali youths went abroad for work between FY 2063/64 (2006/07) and FY 2080/81 (2023/24) with labor permits. Madhesh Province accounted for the highest number, with 172,861 individuals.
As of Baisakh 2082, approximately 2,600 people are leaving Nepal each day for foreign employment, including 746 from Bhojpur in Baisakh alone.
Finance Minister says budget will stimulate economy and attract private investment
Finance Minister Bishnu Prasad Paudel has said the budget for fiscal year 2082/83 (2025/26), unveiled Thursday, will help energize economic activities. Speaking at a press meet at the Ministry of Finance on Friday, he expressed confidence that effective implementation of the budget will lead to increased private sector investment.
He added that the plan will boost employment and that timely completion of infrastructure projects would further accelerate economic growth. Minister Paudel projected a 6% growth rate and said the budget had so far received positive feedback.
Government targets Rs 1.315 trillion in revenue for next fiscal year
For the upcoming fiscal year, the government aims to collect Rs 1.315 trillion in revenue to be deposited into the federal consolidated fund. Of this, Rs 165 billion will be transferred to provincial and local levels. Compared to the current year’s revised estimates, the target is about 4% higher, but still much more ambitious than actual revenues collected so far.
Gold price rises by Rs 700 per tola while silver dips
Gold prices increased by Rs 700 per tola on Friday, reaching Rs 188,500, according to the Nepal Gold and Silver Traders Association. A day earlier, the price stood at Rs 187,800 per tola. Meanwhile, silver prices dropped by Rs 15, falling from Rs 1,995 to Rs 1,980 per tola.
Government to stop printing physical national ID cards
The government is preparing to end the physical printing of national identity cards and switch to digital IDs. Yuvraj Kattel, Director General of the Department of National Identity Card and Registration, said legal and procedural work is underway to make the transition. While current cards include chips and QR codes requiring physical printing, future IDs will be fully digital.
Rastriya Banijya Bank leads income growth among public financial institutions
Rastriya Banijya Bank (RBB) recorded the highest income growth among public financial institutions, according to the Public Institutions Annual Status Review 2082. Finance Minister Bishnu Paudel told parliament that the operating income of 10 such institutions rose by 3.27% to Rs 9.066 billion, with RBB contributing the most to this growth.
Government to run on-the-job and apprenticeship programs
The new budget outlines plans to implement on-the-job and apprenticeship programs tailored to the needs of domestic industries. Presenting the budget in parliament on Thursday, Finance Minister Paudel said vocational training lasting less than six months will be managed by the National Vocational Training Institute and provincial governments, using unified quality standards.
Government investment in public institutions rises by 5.86% to Rs 703.93 billion
Government investment in public institutions increased by 5.86% to Rs 703.93 billion, according to the Public Institutions Annual Status Review 2082 presented by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel. Despite the rise in investment, dividend returns to the government dropped significantly—from Rs 1.375 billion in FY 2079/80 to Rs 883.56 million in FY 2080/81.
Nepal’s per capita gross national income rises to USD 1,517
Nepal’s per capita Gross National Income (GNI) has reached USD 1,517, up from USD 1,377.6, according to the Economic Survey for FY 2081/82. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel shared the data in parliament, noting that the current year’s economic growth rate is estimated at 4.61%.
New budget ignores declared agriculture investment decade
The budget presented by Finance Minister Paudel for fiscal year 2082/83 does not mention the “Agriculture Investment Decade” announced in the current year’s policy and program. Despite the previous government’s emphasis, the new budget fails to continue the initiative.
Experts believe the change in government led to a shift in priorities. Though Rs 5.748 billion has been allocated to agriculture and livestock, there are no new investment programs under the decade-long plan.
Government to enhance capacity of financial regulators
The government plans to strengthen the capacity of financial regulatory bodies under the budget for fiscal year 2082/83. According to Finance Minister Paudel, the goal is to improve capital flow and credit access, strengthen risk management, and enhance institutional governance. These reforms aim to ensure high, inclusive, and sustainable economic growth, with an emphasis on entrepreneurship, public-private investment, and employment.
Government to continue efforts to modernize agriculture
The government will continue programs aimed at the commercialization and mechanization of agriculture to raise productivity. Presenting the FY 2082/83 budget, Finance Minister Paudel announced both new and ongoing agricultural initiatives. The Ministry of Agriculture and Livestock Development has been allocated Rs 5.748 billion, a slight increase from Rs 5.729 billion in the previous year.
IT sector welcomes budget aligning with industry demands
The IT industry has expressed support for the FY 2082/83 budget, saying it addresses many of their concerns. Finance Minister Paudel prioritized IT in the budget speech, offering income tax and electricity revenue exemptions to IT-based companies, hotels, and resorts. The budget also provides a 75% tax exemption on income earned from IT service exports and clarifies earlier tax ambiguities.
Government plans to complete Postal Highway in two years
The government aims to complete the construction of the Postal Highway within two years to improve connectivity in the Terai-Madhesh region. Finance Minister Paudel said Rs 3.56 billion has been allocated for the project. The Kathmandu-Terai Madhesh Fast Track is also expected to be completed by FY 2083/84, including 37 kilometers of sub-base roads, 4 kilometers of tunnels, and 60 bridges.
Government prioritizes industrial infrastructure to boost production
To increase industrial output and productivity, the government has prioritized development of industrial infrastructure in the FY 2082/83 budget. The policy highlights investment protection, policy stability, and strong labor relations. Approved industries in special economic zones and industrial areas will receive rent exemptions for the first three years.
Government to regulate gold and silver jewelry exports
To prevent misuse, the government plans to introduce legal measures to regulate the export of gold and silver jewelry. Finance Minister Paudel announced the establishment of bonded warehouse facilities for exporters. Under the new provision, exporters will be allowed to import gold and silver equivalent to at least 50% of the value of advance foreign currency received.
Government removes foreign tourism fee in new budget
Starting from fiscal year 2082/83, Nepali travelers going abroad will no longer be required to pay the 5% foreign tourism fee on tour packages. The government has eliminated this fee in the newly announced budget.
Ride-sharing rules in Gandaki Province disrupt public transport
New regulations legalizing ride-sharing and self-drive services in Gandaki Province have led to a halt in public transport services. Operators of taxis, buses, and freight vehicles stopped operations in protest, fearing the new rules will harm their businesses. Protesters are demanding the rollback of the policy and have warned of a province-wide vehicle blockade from 16th Jestha and a nationwide protest starting 19th Jestha.
Government imposes 5% excise duty on cement
The government has revised the excise duty on cement to a flat 5%, replacing the earlier rate of Rs 220 per metric ton. The new rate will apply to all cement types, including Portland, alumina, slag, and super sulfate cement. Previously, cement was taxed at Rs 11 per bag.
Government maintains traditional focus on energy sector
The government’s budget for fiscal year 2082/83 continues to emphasize long-standing priorities in the energy sector. Once again, the Budhigandaki Hydroelectric Project has been included despite little progress over the years. It is now planned to be developed under a public-private partnership model, with government investment converted into shares.
Agni Cement’s trade volume drops by 25.32% amid sluggish development
Agni Cement Industry’s trade fell by 25.32% in 2024 compared to the previous year, largely due to slow infrastructure development and weak market demand. The company had traded goods worth Rs 675 million in 2023, which declined to Rs 402 million in 2024. In 2022, the trade volume had reached Rs 1.216 billion.
Comment