Provinces announcing budget today

By A Staff Reporter,Kathmandu, June 15: Provincial governments in Nepal are set to announce their budgets for the upcoming Fiscal Year 2025/25 on Sunday focusing on infrastructure, agriculture, employment and production development. 

The size of their budget will be on par with the current year while Lumbini is set to downsize it significantly. Since all of them are struggling with resource constraints, are dependent on federal grants and have failed to generate reliable sources for revenue generation, they plan to remain modest in their aspirations. 

The federal government has earmarked Rs. 97.56 billion in grants to the seven provinces. Among the provinces, Karnali Province will receive the highest grant allocation of Rs. 16.04 billion. In contrast, Gandaki will receive the smallest share - Rs. 12.23 billion. Likewise, Rs. 14.50 billion will go to Koshi, Rs. 12.73 billion to Madhes and Rs. 13.81 billion to Bagmati, Rs. 14.01 billion to Lumbini and Rs. 14.20 billion to Sudurpashchim.

Bagmati, Gandaki, Karnali, Madhes, Sudurpaschim, and Lumbini prioritise increasing local production, particularly in agriculture and allied sectors. Likewise, Gandaki, Sudurpaschim, Karnali, Madhes aim to create employment, involve returnee migrants, and enhance public-private cooperation.

Bagmati: Infra and production development 

The Bagmati Provincial Government is preparing to bring a budget of around Rs. 65 billion for the upcoming Fiscal Year 2025/26, which is a nominal increase from the budget of Rs. 64.54 billion for current fiscal year.

Minister for Economic Affairs and Planning, Kundan Raj Kafle, informed that the government is in the final stages of preparing the budget. 

The budget for the upcoming fiscal year will focus on production. The government will prioritise the promotion of agriculture and tourism, inclusive economic development, infrastructure development, and environmental protection. Minister Kafle noted that the budget is being drafted in line with the policies and programmes outlined earlier. 

The budget will be formulated based on grants from the federal government, internal revenue, and foreign aid. Previously, the government had set a ceiling of Rs. 55 billion, but due to binding plans, this has now been increased by Rs. 10 billion, taking the total to approximately Rs. 65 billion.

Minister Kafle said that the size of budget has been expanded due to the pressure of high number of projects. 

Nearly 3,000 projects and plans have already been entered in the provincial project bank with most of them concerning road construction. However, the province now aims to focus not only on physical infrastructure but also on production-based development.

The Ministry of Economic Affairs said that in an effort to get their projects included in the provincial budget, elected representatives from various local governments have submitted proposals ranging from large-scale to fragmented schemes.

Chief Minister Bahadur Singh Lama stated that small and fragmented plans will not be prioritised. “We will not include projects costing less than Rs. 2 million. Small projects do not contribute to development; they only result in spending money,” he said. 

Gandaki: Building a self-reliant, prosperous economy

The Gandaki Provincial government is set to present its budget for the upcoming fiscal year in line with the transformational strategy set by the Second Five-Year Plan.

The government is preparing to present a budget of around Rs. 32.5 billion for the fiscal year 2025/26 with the aim of increasing production and productivity, creating employment opportunities and substituting imports. 

The size of budget for the next fiscal year is likely to be around the same as the current fiscal year.

The provincial government has unveiled a budget of Rs. 32.978 billion for the current fiscal year.

Vice-Chairman of Gandaki Provincial Policy and Planning Commission Dr. Krishna Chandra Devkota, said that the new budget will be presented in line with the province's Second Five-Year Plan.

Through the budget, the foundation for building a self-reliant and prosperous economy will be prepared in partnership with the local level and the private sector to increase production and productivity, create employment opportunities and import substitution in accordance with the transformational strategy set by the Second Five-Year Plan. The budget will focus on necessary legal arrangements for public-private-cooperative partnerships to contribute to the economic prosperity of the province through investment in infrastructure and services, including domestic and foreign private sectors.

A fully digital system will be implemented for budget disbursement, and record-keeping of public assets, and financial discipline will be maintained, read the policy and programmes of the province.

The federal government has transferred Rs. 12.23 billion grant for the next fiscal year 2025/26. The grant received from the federal government by the Gandaki Province is lowest among all the seven provinces.

The budget expenditure of the Gandaki Provincial government has been disappointing. As of June 11, the government has spent only 47.5 per cent (Rs. 15.66 billion) of the total budget of Rs. 32.97 billion.

Karnali: Production-oriented development

Karnali Province's Minister for Economic Affairs and Planning, Rajeev Bikram Shah said that the upcoming budget is being prepared with a ceiling of Rs. 31.59 billion. He informed that the budget will remain around this figure.

The budget would focus on production-oriented development. "We are preparing the budget based on its principles, priorities, policies, and programmes. For the development and prosperity of Karnali, we will bring a production-focused budget. Our emphasis will be on industrialisation. We will introduce a production-driven budget in various sectors such as energy, agriculture, and tourism," said Shah.

The next budget is likely to provide incentives to encourage the establishment of industries, particularly those that enable mass production through group involvement alongside individuals. It will especially target young people, with a focus on creating a favourable environment for returnee migrant youth to invest in their localities.

Likewise, tourism and sports will be jointly promoted in the budget to support the development of Karnali. 

"The province has constructed a stadium. We are capable of hosting national and international games here. This will also support the hotel industry in Karnali. We have declared that while the world’s destination is Nepal, Nepal’s destination is Karnali," Shah said. 

Emphasis would also be placed on the production of apples, oranges, and walnuts in the region.

In the current fiscal year, the Karnali Government had announced a budget of Rs. 31.41 billion. Of that, Rs. 12.59 billion (40 per cent) has been spent so far.

It is estimated that the total expenditure will increase to 70 per cent by the end of the year. 

Koshi: Emphasis on infrastructure

Koshi Provincial government has reached the final stage of the budget preparation process for the upcoming fiscal year 2025/26 

Minister for Economic Affairs and Planning of the Koshi Provincial government Ram Bahadur Rana said that the budget will be prepared and presented based on the actual income of the province.

He said that only the plans and programmes included in the Provincial Project Bank will be included in the budget. About 45,000 plans have been registered in the Project Bank.

Sources close to the government said that the government is preparing to allocate a budget of about Rs. 2 billion from the provincial assembly members in the upcoming budget.

It is said that additional plans have been requested at the rate of Rs. 25 million per person from directly elected MPs and Rs. 15 million per person from 37 proportional MPs.

The government is also preparing to present a budget of about Rs. 36 billion for the upcoming year, slightly higher than this year's budget size.

For the current fiscal year 2024/25, the Koshi government had unveiled a budget of Rs. 35.27 billion.

The government is not in a position to increase the size of the budget much more than this year, as the equalisation grant received from the federal government has been continuously decreasing and the conditional and special grant amount is also likely to decrease, said the official of the Ministry of Economic Affairs and Planning.

The federal government has allocated grant of Rs. 14.50 billion to Koshi Province for the upcoming fiscal year.

The government is preparing to add some multi-year projects to the upcoming year's budget. In particular, bridge construction will be prioritised than roads next year.

"Emphasis will be placed on completing ailing projects, while the government will also pay special attention to the tourism year programme," he said.

Lumbini: Budget to go down by 20%

The Lumbini Provincial government is preparing to reduce the size of the budget for the upcoming fiscal year by 20 per cent. 

The budget size is being reduced for fiscal year 2025/26 after implementation difficulties were encountered while bringing ambitious budget in previous fiscal years.

According to the Ministry of Economic Affair and Planning, preparations are underway to bring a realistic and small-sized budget for the fiscal year 2025/26, when the internal resources of the province have not increased.

Minister for Economic Affairs and Planning Dhanendra Karki said that the final preparations for the budget have been made by seeking suggestions for the upcoming budget. 

The province, which presented a budget of Rs. 38.97 billion for the current fiscal year 2024/25, is preparing to bring a budget by reducing it by 20 per cent for next fiscal year, said an official of the ministry. Accordingly, it is estimated that a budget of around Rs. 30 billion will be prepared for the fiscal year 2025/26 next year.

The federal government's fiscal equalisation grant, which is the mainstay of the provincial budget, has reduced the equalisation grant from Rs. 8.5 billion to Rs. 6 billion for the next fiscal year.

The federal government has transferred Rs. 14.01 billion to Lumbini Province for the next fiscal year.

The government is preparing to stop the budget allocation to fragmented plans and programmes for the next fiscal year as problems have been seen in implementing them this year. 

In the current fiscal year, there are 4,300 programems worth less than Rs. 500,000 and 8,200 programmes worth less than Rs. 1 million.

Member of Lumbini Province Planning Commission Dr. Sudan Kumar Oli said that he has suggested preparing the budget for the coming year within the scope of resources. 

He said, “The budget should focus on setting the limits of infrastructure and non-infrastructure, prioritising provincial pride projects that have created liabilities, and supporting plans to expand the scope of revenue of the province.”

Dilaram Panthi, Secretary of the Ministry of Economic Affairs and Planning, said that the trend of introducing new programmes every year but not giving priority to the old ones will be stopped. Lumbini Provincial government can manage only 15 per cent from its internal resources and has to depend on 85 per cent federal grants.

The government has spent only 46 per cent of the budget by mid-May 2025 of the current fiscal year.

Madhes: Focus on self-reliance 

The Madhes Province government is making final preparations for presenting the budget for the fiscal year 2025/26.

Finance Minister Sunil Kumar Yadav is scheduled to present it at the Provincial Assembly. He shared that the budget will feature flagship projects aimed at provincial pride, and its size is expected to be similar to the current fiscal year.

In current FY 2024/25, the province had announced a budget of Rs. 43.89 billion. However, by mid-June, only Rs. 8.89 billion, just 20.26 per cent, has been spent. Capital expenditure was particularly low, with just Rs. 3.82 billion (13 per cent) utilised. 

With only one month remaining, spending the remaining 80 per cent appears unlikely, raising concerns about its impact on the coming year’s fiscal planning.

The upcoming budget places agriculture at the heart of its policy focus. More funds will be allocated to increase domestic production, modernise farming through technology, strengthen seed and fertiliser security, expand irrigation and storage, involve the private sector, and support agricultural insurance.

Minister Yadav also outlined the budget principles in the Appropriation Bill, highlighting goals such as self-reliance, sustainable growth, inclusive service delivery, human development, and climate adaptation. 

Priority sectors include education, health, physical infrastructure, youth entrepreneurship, and tourism. Health services will be strengthened, sports infrastructure enhanced, and a tourism masterplan implemented to stimulate employment and economic growth.

Tourism is set to be developed as a key driver of the economy through the implementation of a master plan, promotional campaigns, infrastructure development, and employment creation.

Additionally, targeted programmes will address social inequality and support women's empowerment, children, persons with disabilities, and senior citizens. In infrastructure, priority has been given to major provincial projects such as roads, irrigation systems, electricity, housing, and public transport initiatives.

Sudurpaschim: Self-employment a priority

The Sudurpaschim government is set to announce Rs. 32.50 billion budget for the upcoming Fiscal Year 2025/26.

This estimate of income and expenditure is slightly up from the current FY 2024/25 budget of Rs. 31.62 billion, informed Nrip Bahadur Sunar, a member of the Sudurpaschim Provincial Planning Commission. 

The provincial assembly has already approved the Policies and Programmes for the next fiscal, and principles and priorities have also been presented.

The policies and programmes for the next year have placed special emphasis on agriculture, tourism, physical infrastructure, education, and health. Presenting the programme at the Provincial Assembly, Governor Najir Miya highlighted employment generation and youth self-employment as key priorities.

The policies include expanding skill-based training and concessional loan schemes through the Self-Employment Development Fund. The government also plans to promote traditional skills and industries by establishing necessary infrastructure for bamboo, jute, allo, and banana fibre textile production. It has also committed to legal and policy reforms to improve industrial performance and aims to establish “one district, one industry” across the province.

To achieve agricultural self-sufficiency, the government will launch a ‘one local level, one product’ campaign and provide subsidies by declaring agriculture as a protected sector. The development of adventure sports infrastructure and unique attractions such as a dolphin park is also planned under the slogan ‘Tourism infrastructure, Foundation of prosperity.’

Chief Minister Kamal Bahadur Shah stressed zero tolerance to corruption and said budget allocation would align with the province’s periodic plans, mid-term expenditure framework, and Sustainable Development Goals. He firmly stated that political interference in budget allocation will not be entertained.

(With inputs from Shaligram Nepal in Chitwan, Phadindra Adhiakri in Lekhnath, Muna Hamal in Surkhet, Shashidhar Parajuli in Biratnagar, Laxman Paudel in Bhairahawa, Direndra Prasad Sah in Janakpurdham, and Prakash Bikram Shah in Dhangadhi.)