Nepal’s budget season sparks frenzy as stakeholders push for development and policy reforms

KATHMANDU: As Nepal’s fiscal year begins in Shrawan (mid-July), the mid-term budget review typically arrives in Magh (January-February), setting off a seasonal rush at Singha Durbar. With the new budget slated for presentation in Jestha (May-June), a flurry of activity ensues as local activists, business leaders, and influential figures lobby for new programs and policy changes to benefit their regions and interests. This annual cycle intensifies from Falgun (February-March) through Baisakh (April-May), peaking in the first week of Jestha, as stakeholders flood the Finance Ministry with suggestions and demands.

From grassroots workers seeking basic development projects to business groups advocating for policy shifts, the ministry becomes a hub of activity. Those with access meet directly with Finance Minister Bishnu Prasad Paudel to present their proposals, while others rely on intermediaries to voice their expectations. This recurring phenomenon reflects a deep-seated desire for development and systemic change, with the budget season offering a rare opportunity for citizens to engage directly with the government.

However, critics argue that this chaotic rush stems from systemic failures in governance. Many believe the government’s inability to modernize processes and adopt efficient tools has created a cumbersome budget process, turning it into a complex “event” rather than a streamlined policy framework. Finance Minister Paudel recently expressed frustration after attending a “marathon” budget speech event, stating, “During budget time, we only receive suggestions, but there’s no space to work or think critically.”

Nepal’s practice of announcing routine government tasks through the budget, rather than addressing them through regular administrative decisions, has drawn criticism. In contrast, developed democracies treat budgets as broad policy frameworks, focusing on taxation and expenditure approvals through parliamentary processes. In Nepal, however, even minor policy decisions and legal amendments are bundled into the budget, creating a bottleneck. This forces stakeholders to wait for the budget to address their needs, while the government delays routine decisions to avoid criticism, piling everything into the annual budget announcement.

Private sector criticized this approach, stating we must wait for the budget even for policy reforms, the rapid decisions needed for economic growth are stifled. In today’s fast-evolving world, delays of even a few days can be costly. Not everything should be tied to the budget.

Nepal’s economic dynamism suffers as a result, with policies for economic reform and public relief often deferred to the budget cycle, undermining efficient governance. Infrastructure projects, already plagued by delays, exemplify this issue. Over the years, internal conflict, strikes, and political instability have been cited as obstacles, but even without these challenges, progress remains sluggish.

For nearly a decade, budgets have included announcements to prevent mid-project transfers of project heads to ensure timely completion, yet implementation remains lacking. Such decisions could be made through regular government orders or separate regulations, but the reliance on budget declarations has perpetuated inefficiencies.

Similarly, relief programs, new non-budgetary initiatives, and even routine decisions like regulating construction material extraction or salt trading have been unnecessarily tied to the budget, often sparking controversy. Former Finance Secretary Rameshwor Khanal argued in the recent statement that modern governance no longer requires such secrecy or delays, especially for tax policies.

Despite provisions in Nepal’s Economic Act allowing the government to adjust tax rates as needed, the tradition of addressing all policy matters during the budget persists, diverting focus and creating inefficiencies. As the Jestha 2082 (May-June 2025) budget approaches, the cycle of pressure and expectations continues, underscoring the need for a more agile and transparent budgeting system.