Provinces present budgets for FY 2025-26, face resource management challenges

KATHMANDU: All seven provinces of Nepal have presented their annual revenue and expenditure estimates (budgets) for the fiscal year 2082/83 (2025/26) in their respective provincial assemblies. Karnali Province presented its budget at midnight on Sunday. Similar to the central government, managing limited revenue and resource constraints remains a major challenge for the provinces.

Most provinces have included unspent funds from previous fiscal years as a source of their budget. Gandaki and Madhesh provinces have introduced deficit budgets, planning to raise internal loans to meet their financial needs. Gandaki aims to borrow NPR 1.75 billion, while Madhesh plans to raise NPR 2 billion in internal loans.

Karnali Province Budget

Karnali Province has introduced a budget of NPR 32.99 billion, approximately 5% higher than the current fiscal year. The allocation includes 23.64% (NPR 7.79 billion) for recurrent expenditure, 60.55% (NPR 19.98 billion) for capital expenditure, 1.66% (NPR 615 million) for financial management, and 13.95% (NPR 4.59 billion) for financial transfers to local levels.

The budget sources include NPR 967.4 million from internal revenue, NPR 5.69 billion from unspent funds of the current fiscal year, NPR 10.27 billion from federal revenue sharing, NPR 10.56 billion from fiscal equalization grants, NPR 4.44 billion from conditional grants, NPR 539.7 million from complementary grants, and NPR 494.6 million from special grants.

Sudurpashchim Province Budget

Sudurpashchim Province has proposed a budget of NPR 33.47 billion. Presented by Economic Affairs Minister Bahadur Singh Thapa, the budget allocates 30.49% (NPR 10.20 billion) for recurrent expenditure, 59.25% (NPR 19.83 billion) for capital expenditure, 10.24% (NPR 3.42 billion) for intergovernmental financial transfers, and NPR 10 million for financial management.

The budget sources include NPR 1.65 billion from internal revenue, NPR 9.87 billion from federal revenue sharing, NPR 80 million from federal royalty sharing, NPR 8.92 billion from fiscal equalization grants, NPR 4.16 billion from conditional grants, NPR 602.6 million from complementary grants, NPR 516 million from special grants, and NPR 7.66 billion from unspent funds of the current fiscal year.

Lumbini Province Budget

Lumbini Province, presented by Economic Affairs and Planning Minister Dhanendra Karki, has a budget of NPR 38.91 billion. It allocates 30.88% (NPR 12.01 billion) for recurrent expenditure, 60.32% (NPR 23.47 billion) for capital expenditure, and 8.80% (NPR 3.42 billion) for financial transfers.

The budget sources include NPR 7.78 billion from internal revenue, NPR 11.86 billion from federal revenue sharing, NPR 415 million from royalty sharing, NPR 2.82 billion from local-level revenue sharing, NPR 8.44 billion from fiscal equalization grants, NPR 4.66 billion from conditional grants, NPR 514 million from complementary grants, NPR 400 million from special grants, and NPR 2 billion from cash reserves.

Gandaki Province Budget

Gandaki Province has proposed a budget of NPR 31.97 billion, presented by Economic Affairs Minister Dr. Takaraj Gurung. The allocation includes 39.5% (NPR 12.63 billion) for recurrent expenditure, 59.7% (NPR 19.09 billion) for capital expenditure, and 0.8% (NPR 250 million) for financial management. The province anticipates a deficit of NPR 15.45 million.

The budget sources include NPR 7.73 billion from fiscal equalization grants, NPR 9.79 billion from federal revenue sharing, NPR 498.9 million from royalty sharing, NPR 3.35 billion from conditional grants, NPR 639.7 million from complementary grants, NPR 498.6 million from special grants, NPR 5.45 billion from internal revenue, NPR 2.24 billion from unspent funds, and NPR 1.75 billion from internal loans.

Bagmati Province Budget

Bagmati Province, presented by Economic Affairs and Planning Minister Kundanraj Kafle, has allocated NPR 67.47 billion. It includes 38.60% (NPR 26.04 billion) for recurrent expenditure and 61.40% (NPR 41.43 billion) for capital expenditure. The budget sources include NPR 28.87 billion from tax revenue, NPR 6.79 billion from other revenue, NPR 14.81 billion from federal financial transfers, and NPR 16.98 billion from unspent funds and miscellaneous receipts.

Madhesh Province Budget

Madhesh Province, presented by Finance Minister Sunil Kumar Yadav, has a budget of NPR 46.58 billion, a 6.13% increase from the current fiscal year. It allocates 35.89% (NPR 16.72 billion) for recurrent expenditure and 64.11% (NPR 30.26 billion) for capital expenditure.

The budget sources include NPR 9.50 billion from internal revenue, NPR 7.72 billion from fiscal equalization grants, NPR 4.26 billion from conditional grants, NPR 394.5 million from special grants, NPR 358.2 million from complementary grants, NPR 12.35 billion from federal revenue sharing, NPR 10.38 billion from cash reserves, and NPR 2 billion from internal loans.

Koshi Province Budget

Koshi Province has allocated NPR 35.87 billion, presented by Economic Affairs and Planning Minister Rambhadur Magar. The budget includes 52% (NPR 18.67 billion) for recurrent expenditure, 47.7% (NPR 17.10 billion) for capital expenditure, and 0.3% (NPR 100 million) for financial management. Financial transfers to local levels amount to NPR 4.70 billion. The budget is 1.7% higher than the current fiscal year, targeting a 5.3% economic growth rate.

The budget sources include NPR 5.50 billion from internal revenue, NPR 12.39 billion from federal revenue sharing, NPR 4.98 billion from fiscal equalization grants, NPR 4.57 billion from conditional grants, NPR 391.7 million from complementary grants, NPR 557.2 million from special grants, NPR 359.9 million from royalty sharing, and NPR 3.13 billion from unspent funds.