Former finance ministers advise Swarnim Wagle on Budget 2083/84, Push for reforms, Fiscal discipline and private sector confidence

KATHMANDU: Finance Minister Dr. Swarnim Wagle on Wednesday held an extensive consultation with former finance ministers to gather suggestions for the upcoming national budget, as the government enters the final stage of preparing the budget for the next fiscal year.

During a high-level discussion in Kathmandu, eight former finance ministers shared recommendations ranging from tax reform, fiscal discipline, private sector confidence, infrastructure prioritization, agricultural subsidies, and public spending cuts to structural economic reforms.

Opening the discussion, Finance Minister Dr. Wagle said the government is preparing a budget aimed at improving the living standards of Nepalis while strengthening governance and economic reform.

“We are in the final stage of budget preparation. We want to move forward by following good practices and experiences of our predecessors,” Wagle said. “We are preparing a budget that stands on the foundation of good governance and aims to improve the broader living standards of citizens.”

He acknowledged that all former finance ministers had led the ministry under different political circumstances but shared the same objective of contributing positively to the country and citizens.

Focus on reforms and avoiding fragmented spending

Former finance secretary and finance minister adviser Rameshwor Khanal urged the government to implement recommendations made by the High-Level Economic Reform Commission and avoid scattering the budget across small and unprepared projects.

Khanal also suggested removing Value Added Tax (VAT) from electricity to reduce costs and support industrial competitiveness.

Former finance minister Shankar Koirala emphasized continuity in earlier reform reports and encouraged opening electricity trading to the private sector. He also called for easing forest-related barriers to infrastructure development, promoting new industries, and advancing Nepal’s hedging policy for foreign investment protection.

Warning against unrealistic revenue targets

Former finance minister Yubaraj Khatiwada cautioned the government against setting overly ambitious revenue goals.

Khatiwada suggested keeping annual revenue growth targets between 10 to 12 percent, warning against unrealistic expectations of 15 percent growth. He also advised limiting the overall budget size to around NPR 2.5 trillion, arguing that actual spending may remain around NPR 1.6–1.7 trillion.

He further recommended maintaining the current lower income tax slab, gradually reducing excise duties, avoiding a dual VAT system, strengthening financial sector reforms, and improving coordination with the Nepal Rastra Bank.

Khatiwada also stressed the need for diplomatic efforts to remove Nepal from the international “grey list” and encouraged policies to rebuild private sector confidence.

Calls for stronger private sector partnership

Former finance minister Prakash Chandra Lohani emphasized closer cooperation between the government and private sector.

Lohani called for policies encouraging small, medium, and large industries, stronger incentives for productivity, agricultural subsidies, and measures to improve transparency in private sector investments.

He also urged the government to seek better access for Nepali agricultural products in the Indian market through economic diplomacy.

Fewer mega projects, better land reform

Former finance minister Surendra Pandey recommended reducing the number of large national pride projects and prioritizing only a few high-impact projects.

He emphasized the urgent need for land-use reform, proposing separate zoning for agricultural, industrial, residential, and commercial land.

Pandey also highlighted tourism potential, recommending plans to attract Indian middle-class tourists and develop Nepal as a destination for hill stations and wedding tourism.

Push for structural reforms and privatization

Former finance minister Prakash Sharan Mahat urged the government to remove unnecessary structures, better target social security benefits, and consider leasing underperforming state-owned industries and government land to the private sector.

Mahat also renewed calls for reforming Nepal Airlines, saying the state may struggle to sustain the national flag carrier without structural changes.

He additionally warned against excessive foreign borrowing and urged reforms in public procurement, especially large contracts exceeding NPR 5 billion.

Tourism, agriculture and industrial revival emphasized

Former finance minister Barshaman Pun said infrastructure investment in the past had produced mixed results and called for stronger investment in tourism infrastructure and agricultural market access.

Pun suggested developing hill stations targeting India’s growing middle class and transforming Nepal into a wedding tourism destination.

Meanwhile, former finance minister Bishnu Prasad Paudel urged the government to act boldly on reform commitments, strengthen resource planning, and move forward on game-changing projects such as the Budhigandaki hydropower project.

Budget as political commitment document

Former finance minister Janardan Sharma described the budget as a political commitment document and urged the government to take bold decisions on cutting government spending, strengthening investment security, supporting mining development, and promoting technical education linked to employment.

Sharma also highlighted the importance of fertilizer production, pharmaceutical industries, and infrastructure development in remote regions, including tunnel connectivity to Karnali.

The discussion comes as expectations rise for Nepal’s upcoming fiscal budget, with businesses, investors, and citizens closely watching for reforms that can revive economic growth, restore confidence, and address slowing private investment.