Finance ministry to divert Rs 100 billion from budget for election and reconstruction

KATHMANDU: Interim Finance Minister Rameshore Khanal has announced that Rs 100 billion will be diverted from the current fiscal year’s budget to finance the upcoming national elections and the reconstruction of properties damaged during the Gen-Z movement.

Speaking after assuming office at Singha Durbar on Monday, Khanal clarified that no supplementary budget will be introduced. Instead, funds will be managed from within the budget of FY 2082/83.

Prime Minister Sushila Karki, who took office following the Gen-Z uprising, has already announced that general elections will be held on March 5, 2026 (Falgun 21, 2082 BS). The interim government now faces the dual responsibility of conducting elections within six months while also repairing large-scale damage to public and private infrastructure.

He also formed a three-member task force under the coordination of the head of the Budget Division to recommend cuts. The task force will filter projects in the budget and set priorities. He urged employees to forget past practices. “If mistakes were made in the past, there will be punishment. Do not misuse resources, and do not use public property for personal purposes—I give you this instruction,” he said.

Recalling the recent attacks on the private sector, he stressed the need to move forward in cooperation with it. “We are in contact with the private sector; we must also take suggestions from it. To ensure revenue collection, the private sector must be kept satisfied. Harsh and coercive measures should not be imposed. If we continue improving services, revenue will naturally increase,” Minister Khanal remarked.

Finance Minister Khanal also said that recommendations of the High-Level Economic Reform Commission will be implemented. He emphasized that his priority will be the management of public expenditure.

“The constitution requires elections to be held within six months, and there is no room for an extension. Although this year’s budget did not allocate funds for elections, resources will be arranged from within the existing allocations,” Khanal said. “The finance secretary has confirmed that Rs 100 billion can be freed up by cutting non-essential and politically driven projects. That money will be used for two priorities—elections and reconstruction.”

Khanal criticized the existing budget for including projects inserted at the last minute under political pressure without proper study. He stressed that such allocations could be trimmed to free up resources for essential national priorities.

Reflecting on the situation inside Singha Durbar, Khanal said he had never witnessed such devastation in his decades of service. “In my 46 years of entering this complex—31 years as a government official and 15 years after leaving—I have never seen such destruction. It looks like a war zone, like something out of a film or documentary,” he remarked.

The finance minister also directed that no new vehicles be purchased during the interim period, emphasizing austerity. He pointed out that several unused vehicles were already lying idle in government lots and did not need replacement.

“We have suffered immense losses. Some damages can be addressed immediately, some in phases, and some may not require replacement at all. But our two non-negotiable priorities are clear—holding the elections on time and rebuilding essential infrastructure,” Khanal added.