RSP led govt set to unveil first budget with ambitious vision: From ‘Digital Nepal’ to a $100 billion economy

KATHMANDU: The Government of Nepal is set to unveil its highly anticipated budget for the fiscal year 2083/84 today, amid growing public expectations from the nearly two-thirds majority-backed administration. Finance Minister Dr. Swarnim Wagle is scheduled to present the annual budget and expenditure plan before a joint session of the Federal Parliament at 4:00 PM on Jestha 15, in accordance with constitutional provisions.

This will be the first budget introduced by the ruling Rastriya Swatantra Party (RSP)-led government, making it a focal point of interest among political observers, businesses, investors, and the broader economic community.

According to government sources, the upcoming budget has been crafted based on the government’s pre-election commitment document, or Vachapatra, which serves as the administration’s policy roadmap. Officials involved in the budget preparation indicate that the size of the budget will increase significantly compared to the current fiscal year, with several ambitious and long-term development programs expected to be included.

For the ongoing fiscal year 2082/83, Nepal is implementing a budget of Rs 19.64 trillion (Rs 19 kharb 64 arba). However, Finance Minister Wagle is reportedly preparing to introduce a larger budget framework by integrating reform-oriented, technology-driven, and development-focused programs intended to deliver long-term economic impact.

Despite the government’s ambitious posture, Nepal’s fiscal condition remains under pressure. Government expenditure during the first ten months of the current fiscal year reached approximately Rs 11.73 trillion (Rs 11 kharb 73 arba 52 crore), while total revenue collection, foreign grants, and other sources of income stood at only around Rs 10.12 trillion. The resulting budget deficit of nearly Rs 1.5 trillion has highlighted ongoing challenges in revenue mobilization.

With revenue collection falling below expectations, the government is expected to rely on domestic and foreign borrowing, alongside development assistance, to manage financial resources and sustain budgetary commitments.

Nevertheless, officials say the government is preparing an aggressive development-oriented and reform-driven budget aimed at responding to rising public expectations. One of the major long-term targets expected to be announced is Nepal’s graduation to a middle-income country within the next decade and expanding the economy to USD 100 billion within seven years, a goal that was also included in the RSP’s election manifesto.

Finance Minister Wagle has already identified five key priorities for the upcoming budget: governance reform, economic restructuring, connectivity expansion, social sector investment, and strengthening Nepal’s global “soft power.”

‘Digital Nepal’ to Receive Major Push

The information technology sector is expected to emerge as one of the biggest priorities in this year’s budget. Officials involved in budget planning suggest that the government is preparing a major package under the ‘Digital Nepal’ initiative, aimed at transforming the country’s digital economy and technology ecosystem.

The government is likely to declare information technology as a “national strategic industry”, while introducing investment incentives for software development, artificial intelligence (AI), and cloud services.

Similarly, authorities are preparing to launch a “Startup Nepal Portal”, allowing entrepreneurs to access company registration, tax incentives, and seed capital support through a single platform. The government is also expected to introduce programs facilitating remote work opportunities, enabling Nepali youth to work for foreign companies while remaining in Nepal.

Revival of State-Owned Industries, Salary Hike Possible

Reactivating long-shuttered state-owned enterprises is also expected to feature prominently in the budget.

However, due to resource constraints, the government is unlikely to introduce significant increases in social security allowances. In contrast, civil servant salaries are expected to rise, according to sources familiar with the budget discussions.

Administrative reform is another central agenda of the government. Through the upcoming budget, authorities are reportedly planning to implement a “Line Hoina, Online” (Not Line, But Online) service delivery concept to digitize public services, reduce bureaucracy, and improve citizen access.

The government is also expected to announce measures aimed at ending political influence within the state bureaucracy, including plans to abolish trade unions within the civil service and restrict government employees from political activities.

Private Sector Investment to Drive Mega Infrastructure

Building on the recently passed law on alternative development finance mobilization, the government is preparing to invite larger private sector participation in mega infrastructure projects, including tunnel roads and high-cost strategic developments.

Officials believe this approach could address long-standing delays in project execution caused by overdependence on public financing and prolonged bureaucratic bottlenecks.

The budget is also expected to prioritize near-completion projects. Data from the National Planning Commission’s project bank shows that as of Wednesday, 8,310 projects had been registered. Among them, 404 projects are fully studied and implementation-ready, while work is ongoing on 133 multi-year projects.

In addition, 7,773 new projects with minimum cost estimates have been entered into the project bank for study purposes. Projects with completed feasibility studies are expected to receive resource allocation in the new budget.

End to ‘Asare Development’?

The government is also preparing to address Nepal’s long-criticized trend of last-minute fiscal spending, commonly known as “Asare Development.”

To improve project implementation efficiency, authorities are planning to introduce a “Zero-Day Procurement Policy,” allowing procurement and contract processes to begin immediately from Shrawan 1 (mid-July), rather than waiting for lengthy procedural delays after budget approval.

Under the proposed framework, detailed project reports (DPRs) and land acquisition processes would need to be completed before budget allocation.

Additionally, the government is expected to announce an “Investment Express Policy”, designed to ensure investors receive all necessary approvals within 30 days, potentially improving Nepal’s investment climate and ease of doing business.

Tax Reforms and New Economic Liberalization

Tax reform is expected to be another major focus area in the budget.

The government is preparing measures to bring informal businesses into the tax net while increasing income tax exemption thresholds for middle- and lower-income earners.

Currently, annual income up to Rs 500,000 for individuals and Rs 600,000 for couples remains tax-free. However, Nepal’s private sector has been lobbying for an increase in the threshold to at least Rs 1 million annually.

At the same time, the government is expected to advance a “new phase of economic reform” through the budget. Based on recommendations from the High-Level Economic Reform Suggestion Commission, the government has already initiated the process of repealing 15 outdated laws, with plans to institutionalize broader reforms through the upcoming fiscal plan.

As Nepal grapples with fiscal constraints, weak revenue performance, and rising public expectations, today’s budget is expected to offer a clearer picture of how the government plans to balance economic discipline with ambitious promises of transformation, digital modernization, and accelerated growth.