Kathmandu Metropolis unveils NRs 25.88 billion budget for 2026/27

Kathmandu Metropolitan City (KMC) has announced a budget of NRs 25.88 billion for the fiscal year 2026/27, an increase of approximately NRs 12 million (0.47%) compared to the current fiscal year. 

The budget was presented by Acting Mayor Sunita Dangol during the third meeting of the 19th Metropolitan Assembly on 18 June.

The proposed budget allocates NRs 25.13 billion through the municipal consolidated fund, while NRs 750 million has been earmarked for external liabilities and other expenditures.

Revenue sources

KMC expects to mobilise NRs 20.19 billion (78%) from internal revenue and bank balances. 

An additional NRs 4.94 billion (19.1%) is projected from federal and provincial government grants, including conditional grants, fiscal equalisation transfers and revenue-sharing arrangements.

Public participation is expected to contribute NRs 10 million.

Infrastructure receives largest share

Infrastructure development continues to remain the city's top priority, receiving NRs 15.32 billion, accounting for nearly 60% of the total budget.

Other major sectoral allocations include:

• Administrative and operational expenses: NRs 4.72 billion (18.2%)
• Social development: NRs 2.42 billion (9.4%)
• Governance and cross-cutting sectors: NRs 2.13 billion (8.2%)
• Economic development: NRs 541.8 million (2.1%)

Focus on waste management, education and employment

The metropolitan government said the budget prioritises waste management, education reform, urban healthcare, improved governance and employment generation. The city plans to expand its "One Ward, One Enterprise" programme to create jobs and boost local income.

To support youth employment and entrepreneurship, NRs 100 million has been allocated for self-employment and business development initiatives. The Metropolitan Nutrition Allowance Programme will receive NRs 160 million.

Housing and health projects

KMC has allocated NRs 50 million for the first phase of a collective housing project and NRs 40 million for the initial phase of a planned metropolitan hospital.

The budget also includes measures to improve services for senior citizens, persons with disabilities and other vulnerable groups.

Heritage and environmental protection

Investments have been proposed for the preservation of Kathmandu's cultural and historical heritage, including temples, monasteries, traditional courtyards and ancient water systems.

Environmental initiatives will focus on pollution control, riverbank conservation, urban parks, greenery promotion, climate resilience and disaster preparedness. The city also plans to continue its "Plastic Bag-Free Kathmandu" campaign.

Additional funding has been set aside for night-time public transport, public toilets, drinking water ATMs, digital governance systems, infrastructure insurance and municipal service improvements.

Key area allocations

• Heritage conservation: NRs 2.53 billion (9.8%)
• Education: NRs 1.71 billion (6.6%)
• Environmental management: NRs 1.22 billion (4.7%)
• Health services: NRs 700 million (2.7%)
• Urban greenery: NRs 430 million (1.7%)
• Information technology: NRs 410 million (1.6%)
• Disaster management: NRs 360 million (1.4%)

Kathmandu’s recent budget history

Earlier, after Balen Shah assumed leadership of Kathmandu Metropolitan City (KMC), he presented a NRs 25.41 billion budget for the fiscal year 2022/23, marking a staggering increase of more than NRs 6 billion (34.4%) compared to the previous year’s allocation of NRs 18.9 billion.

Kathmandu's budget has remained virtually flat for four consecutive fiscal years, rising from about NRs 25.41 billion in 2022/23 to NRs 25.76 billion in 2025/26, an increase of just 2% overall.

However, KMC’s spending capacity remains weak despite an ambitious initial budget and relatively stable allocations in subsequent years. The metropolis has consistently struggled to fully utilise its budget, with development expenditure remaining at around 50% across multiple fiscal years.

Similarly, last fiscal year, KMC failed to table its budget on a timely basis, due to disputes between Mayor Balen Shah and the central government, although the laws require local governments to submit their annual budgets by the 10th day of the month of Ashadh (around June 24), mainly because federal transfers and implementation can proceed on time.

This year, Acting Mayor Dangol has tabled the budget a week before the prescribed time during which she also tabled the Economic Bill and the Appropriation Bill. A further session has been scheduled for July 1 to discuss the budget proposal and bills.

As per the law, the assembly must complete discussion within 15 days of submission, and endorse the budget by the end of Ashadh (mid-July).