What we do is costly! Your support will help us dig more stories.
Yes, I'm Interested!Ignorance isn't always bliss | Don't stay foolish.
Keep informed | Read our news and analysis.
Finance Minister Swornim Wagle is set to present the budget for the forthcoming fiscal year 2026/27 today at 4:00 PM in a joint session of the Federal Parliament.
This marks the first budget presentation by the Rastriya Swatantra Party (RSP) following the formation of a new government under its leadership.
Holding a near two-thirds majority, the RSP administration views this budget as its initial, crucial stride toward the economic path it plans to pursue over the next five years.
Last fiscal year, the KP Sharma Oli-led government had unveiled a NRs 1.964 trillion budget by then–Finance Minister Bishnu Prasad Paudel, which was later revised to NRs 1.688 trillion.
The Vice-Chairman of the National Planning Commission has currently set the budget ceiling at NRs 1.890 trillion. However reports indicate that the government is poised to table a fiscal plan of a significantly larger scale despite fiscal pressures in both tax revenues and expenditure capacity.
As of May 28, the government has achieved a 70% revenue collection from the target of NRs 1.733 trillion while still struggling to spend one-third of the capital budget.
Two weeks ago, Minister Wagle presented the principles and priorities of the upcoming national budget, outlining the government’s plan around five core principles and five key priorities. It focuses on good governance, economic reform, connectivity, human capital development, and strengthening Nepal’s soft power as the foundation of the new budget.
Today’s budget is expected to hike the salaries of government officials while making crucial decisions on the closed state-owned industries. There is also anticipation of tax reforms, including higher income tax exemption thresholds for low and middle-income earners.
From a political standpoint, today’s parliamentary session will also be closely watched to see whether Prime Minister Shah attends the House to listen to his government’s fiscal plans and policies. Since the formation of the new government, the Prime Minister has repeatedly avoided appearing in Parliament, drawing criticism from the opposition, which has consistently demanded his presence in the House.
The government has increased the salaries of civil servants starting from the upcoming fiscal year.
Finance Minister Dr. Swarnim Wagle informed that the decision has been taken to revise the salary structure of government employees.
He said that salaries of civil servants had not been increased for the past four years, during which time inflation based on the consumer price index had risen by 17.3%. He added that there was a need to review compensation to ensure a dignified standard of living.
Accordingly, the government has decided to maintain the existing dearness allowance while increasing the basic salary by 10% at the entry level. In addition, a new performance-based system has been introduced, providing an additional 10% monthly incentive based on the revised pay scale.
“The result will be an overall net increase of 21% in existing remuneration, with minimum salaries ranging from around Rs 40,000 to over Rs 100,000 including grade adjustments,” the Finance Minister said.
The new pay scale will come into effect from Shrawan 1, 2083.
The government has announced a restructuring of the national health insurance program under the upcoming fiscal year budget.
Finance Minister Dr. Swarnim Waglé said the reform aims to improve the program’s effectiveness and financial management.
A total of NRs 15 billion has been allocated for health insurance. The allocation compares with NRs 10 billion in the current fiscal year, later increased by an additional NRs 1 billion.
The program is currently facing around NRs 25 billion in outstanding liabilities, largely due to delayed payments to healthcare providers, which has affected service delivery.
The government has also recently decided to suspend the health insurance program in private hospitals.
On basic health services, the government plans to complete 336 under-construction basic hospitals within the next three years. New hospitals will be built in selected local units with low human development index indicators in each province, while projects not yet started will proceed only after scientific mapping and planning.
A total of NRs five billion has been allocated for basic hospital construction and infrastructure development.
Wagle has also announced doubling the night allowance for nurses.
The government has announced allocations for different sectors in the 2025/26 budget.
It has allocated NRs 218.30 billion for the education sector.
NRs 4.03 billion has been allocated for the sports sector.
Road and urban infrastructure has been allocated NRs 286 billion.
NRs 2.27 billion is allocated for women, children, gender and sexual minorities.
A budget of NRs 3.63 billion has been allocated for the labor and employment sector.
NRs 70 billion has been set aside for ongoing transmission line and substation projects.
NRs 12.31 billion has been allocated to the forest, environment, and climate sector.
The government has allocated NRs 120 billion for the social security sector.
The government has unveiled an extensive road infrastructure plan under the budget for fiscal year 2026/27, focusing on maintenance, expansion, and strategic connectivity across the country.
Finance Minister Dr. Swarnim Waglé announced that NRs 28.52 billion has been allocated for nationwide road maintenance, with special emphasis on making urban roads in the Kathmandu Valley dust-free and pothole-free. He noted a shift in policy, stating that previous budgets focused more on new construction than maintenance.
The government has set a target of blacktopping 1,000 kilometers of roads and constructing 275 bridges in the coming fiscal year. The East-West Highway is also planned to be upgraded to a four-lane standard within five years.
Under the Kathmandu–Tarai Fast Track project, 40 bridges and 5.4 kilometers of road will be completed next year. The project has been allocated NRs 17.64 billion, along with continued work on link roads to integrate it with the national road network.
The budget has also revived the Gandaki Chaturbhuj Project, now repositioned as a business and enterprise-oriented development initiative, after previously being announced but not implemented.
In addition, the government plans to develop 12 identity-based cities along the Mid-Hill Highway, with NRs 1.83 billion allocated for land development and infrastructure, aimed at promoting balanced regional development along the corridor.
The government has announced a provision allowing foreign investors, international organisations, and branches of multinational companies to lease apartments for residential use on a long-term basis.
Finance Minister Dr. Swarnim Waglé said such entities will be permitted to lease up to 25% of the total units in a building for housing purposes.
The facility will apply to residential buildings or government-designated locations.
The government has introduced a scheme to settle pending tax disputes taken to courts and judicial bodies.
Finance Minister Dr. Swarnim Waglé said cases will be withdrawn if the assessed tax is paid along with an additional 1% within the deadline. Penalties, fees, and interest will be waived.
The government has unveiled an ambitious information and communication technology (ICT) agenda in the 2026/27 budget, aiming to position Nepal as a regional technology hub.
Waglé has announced plans to establish a sovereign artificial intelligence (AI) computing center in Syuchatar, Kathmandu.
He also outlined a plan to retain 66% government ownership in Nepal Telecom while selling the remaining shares to the public. The proceeds from the share sale will be used to support the development of Nepal as a tech-driven hub.
The budget further opens the ICT sector to foreign investment and introduces provisions to facilitate remote work from Nepal for international employers, supported by new legal frameworks to attract global digital employment opportunities.
“The government’s focus will remain on expanding information technology. We will increase investment in digital public infrastructure and establish a fintech marketplace under the supervision of Nepal Rastra Bank,” the minister said.
A key highlight of the budget is the proposed sovereign AI compute center in Syuchatar, which will host thousands of AI processing units. The facility will provide subsidised computing resources to AI startups and entrepreneurs.
The minister added that Nepal’s hydropower resources will be leveraged to power high-value AI computing services, linking clean energy with digital infrastructure to drive skilled employment, digital exports, and an AI-led economic transformation.
Finance Minister Dr. Swarnim Waglé has announced a revision to the tax framework governing the transfer of ownership, whether voluntary or involuntary, following a person’s death.
He clarified that such transfers of ownership in the course of inheritance or succession will no longer be brought under Section 58 of the Income Tax Act, effectively exempting them from that tax provision.
Finance Minister Dr. Swarnim Waglé has announced a sweeping review and restructuring of the country’s tax system as part of the new budget, aimed at reducing the tax burden and simplifying compliance.
He said the income tax exemption threshold for individuals has been doubled to NRs one million, significantly widening the tax-free income bracket. The maximum personal income tax rate has also been reduced by 10 percentage points.
On industrial inputs, customs duties on 273 categories of raw materials have been lowered to ensure they remain at least one tier below the rates applied to finished goods.
The customs duty structure has been streamlined from the existing 11 slabs to just 7.
In a major policy shift, excise duties previously levied on 360 goods have been fully removed.
Additionally, several fragmented charges collected at customs points, including infrastructure development fees and road maintenance levies, have been consolidated into a single “Green Tax,” replacing multiple existing surcharges with a unified system.
The Council of Ministers has approved the national budget for the upcoming fiscal year 2026/27 during a Cabinet meeting held on Friday afternoon. Finance Minister Dr. Swarnim Waglé presented the budget proposal in the meeting before it was formally endorsed.
Following Cabinet approval, the budget has now been tabled in the joint session of the Federal Parliament, where Finance Minister Waglé is presenting it in line with the parliamentary schedule.
The joint parliamentary session began shortly after the Cabinet decision, marking the official presentation of the new fiscal year’s budget.
Prime Minister Balen Shah is also present in today’s joint session. His attendance comes after criticism from the opposition regarding his absence in earlier parliamentary sittings, particularly following the joint session where the policy and program was presented. Opposition lawmakers had previously raised concerns over his non-attendance.
Finance Minister Dr. Swarnim Waglé has introduced a symbolic departure from tradition by carrying the budget for the upcoming fiscal year 2026/27 in a file made of Nepali handmade paper.
For years, finance ministers have typically presented the national budget in a red briefcase, a practice that became a familiar ceremonial tradition. In some instances, ministers have also used bags made from allo fiber, a locally sourced natural material.
This year, however, Minister Waglé opted for a Nepali paper file instead, signaling a shift away from the customary presentation style. The budget is scheduled to be presented at 4:00 PM in a joint session of the Federal Parliament.
Read More Stories
Monsoon alert issued across Nepal as heavy rainfall threatens several regions
Nepals monsoon system has become increasingly active, with the monsoon trough currently positioned...
Supreme Court suspends Property Investigation Commission’s activities pending constitutional review
The Supreme Court has ordered the government-appointed Property Inquiry Commission to suspend its...
NEPSE closes slightly lower, turnover reaches two-month high
The stock market extended its post-monetary policy decline on Friday, with the Nepal...
