Government accelerates budget preparation amid resource crunch

Kathmandu, February 27 — Amid a severe resource crunch, the government has accelerated preparations for the budget for the upcoming fiscal year 2082/083 (2025/26).

According to the Ministry of Finance, foreign aid has been notably reduced, and revenue collection is not effective enough.

Government officials have accelerated budget preparations, keeping a ceiling of approximately NPR 19 trillion as recommended by the National Planning Commission.

While this ceiling is larger than the current budget, which stands at NPR 18.6 trillion, the government had reduced it by about NPR 2 trillion during the mid-term review under Finance Minister Bishnu Prasad Paudel.

So far, only NPR 7.9 trillion of the current budget has been spent, according to data from the Office of the Financial Comptroller General.

Currently, the budget deficit has exceeded NPR 122 billion.

As of February 25, the total revenue collected is NPR 668 billion.

The growing gap between government expenditure and revenue is making it increasingly challenging for the government to prepare the next budget.

Officials from the Ministry of Finance have indicated that the new budget will have to allocate a significant amount for monsoon-related expenditures, mandatory obligations such as pensions, social security programs like elderly allowances, and foreign debt liabilities.

A large portion of the budget is expected to go towards long-delayed transformational projects and national pride initiatives.

In terms of social security, more is being spent each year than on development programs, with nearly 20% of the budget now directed towards social security, which the new budget must address.

Finance Ministry spokesperson Shyam Prasad Bhandari said that the budget ceiling provided by the National Planning Commission is being divided among ministries as preparations continue.

Former executive director of Nepal Rastra Bank, Nar Bahadur Thapa, noted that the current leadership is struggling to meet the country's financial needs due to the long-term reduction in external aid.

He emphasized the need to take out sufficient concessional loans to address infrastructure needs and combat the impacts of climate change.

Additionally, he called for discussions with neighboring China to secure further aid.