Kathmandu. Nepal Development Watch (NEDEV), an organization formed to monitor development and good governance in Nepal, issued its annual comments on the Government of Nepal’s budget for fiscal year 2026\u00f727, welcoming the historical size and direction of the budget. It also urged the government to bridge the huge gap between policy ambition and implementation capacity. <\/p>\n
“The budget of Rs 2.12 trillion is the biggest in the history of Nepal. The estimated revenue is Rs. Since only Rs 1.4 trillion, the government has allocated about Rs 1.4 trillion. 0.8 trillion will have to be raised through loans, loans and grants. This is a challenging task as grant funding is becoming increasingly scarce in the current international aid environment,” said Nepal Development Watch. <\/p>\n
Growth-oriented, middle-class targeted budget<\/p>\n
According to an analysis by Nepal Development Watch, the budget’s structural priorities are clearly geared towards the salaried middle class, corporate investors, and tech-savvy youth. <\/p>\n
The personal income tax exemption limit is Rs. The doubling of the Rs 1 million, the reduction of the highest marginal income tax rate from 39 per cent to 29 per cent, and a 21 per cent increase in the salaries of government employees are some of the most notable fiscal signs of this budget. In addition, reforms such as tax breaks in the IT sector for the digital economy, the establishment of a sovereign AI computing center, and instant VAT refund on digital payments are also included. <\/p>\n
The most positive structural aspect of the budget is the commitment to institutional streamlining. The reduction of federal ministries from 22 to 18 and the abolition or consolidation of 31 redundant state boards and agencies are seen as an indispensable precondition for good governance, Nedev said. <\/p>\n
Inclusion still in second priority <\/strong><\/p>\n In the budget, the nutrition allowance of Dalit children has been increased from Rs. 500 to Rs. Despite positive social protection measures, such as raising the 1,000 per month rate and expanding nutrition programmes to 25 highly-poverty districts in Madhes, Karnali and far-western provinces, Nedev warns that social justice is still not a central tenet of the budget, but only a secondary priority. <\/p>\n Most interventions focus on the delivery of welfare services, rather than addressing the deep structural inequalities that exclude Dalit communities, indigenous nationalities, women, Madhesi people and other historically marginalized groups. In its report, Nepal Development Watch also pointed out that regional investment does not automatically ensure social inclusion. <\/p>\n Even within the same district, upper-caste households, men, and politically connected groups can unevenly capture the benefits of public investment. The organization urges the government to adopt targeted and well-intentioned interventions for marginalized groups in conjunction with the economic growth target<\/p>\n Health and Education: Promising direction, limited funding<\/strong><\/p>\n }<\/p>\n The health sector has been allocated Rs. Rs 102.95 billion has been allocated. This is about 4.7 percent of the total government expenditure. That’s significantly lower than the World Health Organization’s recommendation. <\/p>\n Nepal Development Watch welcomes the budget allocation to make cancer treatment free of cost in government hospitals and to complete 336 health posts in remote districts of Karnali and Far-West. <\/p>\n The education sector has been allocated Rs. Rs 218.30 billion has been allocated and a forward-looking emphasis has been laid on artificial intelligence, research, innovation and skill development. However, the share of education in the national budget has actually decreased compared to last year. It is only 10.28 per cent of the total budget and about 3.31 per cent of GDP. <\/p>\n More worryingly, nearly 90.7 per cent of education expenditure goes to current expenditure and only 9.3 per cent of capital investment. This limits the resources available in infrastructure, digital learning, and innovation. <\/p>\n Agriculture: Strong in input, weak in the market<\/strong><\/p>\n }<\/p>\n Expansion of additional 15,800 hectares of irrigation, Rs. Nepal Development Watch (NDW) has welcomed the provision of Rs 32.46 billion in fertilizer, fertilizer subsidy, agricultural insurance assistance, farmers’ identity cards and establishment of cold storage and processing facilities. <\/p>\n However, the organization has described it as a budget mainly focused on inputs and infrastructure, saying that small farmers will get real benefits only if fertilizers are distributed on time, irrigation projects are completed on time and market linkages are strengthened. <\/p>\n Employment, Export and Investment Enhancement \u2013 Main Challenges<\/strong><\/p>\n Nepal Development Watch has pointed out that despite years of political commitments, the budget lacks specific, targeted programs to create domestic jobs. <\/p>\n While Nepal has real potential in sectors such as tourism, hydropower, IT services, and niche agricultural products, there is a glaring lack of a credible strategy to make exports a strong engine of economic growth and employment. <\/p>\n The organization has suggested that more bold steps should be taken to improve the investment environment for foreign investors, including legal protection and an end to administrative hassles. <\/p>\n Implementation Question <\/strong><\/p>\n Nepal Development Watch (NDW) said that the current administration can transform the civil service from a passive gatekeeper to an active facilitator of development and translate the budget’s technical approach into a tangible improvement in the lives of ordinary citizens, especially the most marginalized. <\/p>\n Nepal Development Watch (NEDEV) is an independent civil society organization dedicated to monitoring, analyzing and commenting on Nepal’s development policies, good governance and public finances.<\/p>\n","protected":false},"excerpt":{"rendered":" Kathmandu. Nepal Development Watch (NEDEV), an organization formed to monitor development and good governance in Nepal, issued its annual comments on the Government of Nepal’s budget for fiscal year 2026\u00f727, welcoming the historical size and direction of the budget. It also urged the government to bridge the huge gap between policy ambition and implementation capacity.Continue reading “Nepal’s budget ambitious, implementation challenging: Nepal Development Watch\u00a0“<\/span><\/a><\/p>\n","protected":false},"author":11,"featured_media":91607,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1391],"tags":[],"class_list":["post-91612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized-en"],"acf":[],"publishedDateNp":"\u0967 \u0905\u0938\u093e\u0930 \u0968\u0966\u096e\u0969, \u0938\u094b\u092e\u092c\u093e\u0930 \u0967\u096a:\u0966\u096f","_links":{"self":[{"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/posts\/91612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/comments?post=91612"}],"version-history":[{"count":1,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/posts\/91612\/revisions"}],"predecessor-version":[{"id":91613,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/posts\/91612\/revisions\/91613"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/media\/91607"}],"wp:attachment":[{"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/media?parent=91612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/categories?post=91612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.kalopati.com\/kp_api\/wp\/v2\/tags?post=91612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}