Kathmandu, May 30
The government of Nepal has unveiled a Rs 1.96 trillion national budget for the fiscal year 2025/26, with an emphasis on digital infrastructure, economic regulation, youth empowerment, and social welfare reforms.
Here are the major highlights of the budget for the fiscal year 2025/26
Highest-ever budget for sports
A budget of NPR 6.8 billion has been allocated for sports for the upcoming fiscal year 2025/26. An international-level modern stadium capable of hosting all types of games will be constructed in Damak, Jhapa. High-altitude sports stadiums will be built in Himalayan regions like Solukhumbu and Mustang. NPR 400 million has been allocated for upgrading the TU International Cricket Ground. A total of NPR 420 million has been allocated for upgrading the Mulpani Cricket Ground, Fapla Cricket Ground, Siddhartha Cricket Ground, and Girija Prasad Koirala Cricket Ground. NPR 540 million has been allocated to organize the 10th National Sports in Surkhet.
Online payment and visa now possible
The immigration system will be upgraded. To make immigration administration efficient and effective, online payment and visa systems will be implemented. Free residential visas will be provided to experts and investors.
Digital transformation and AI development
The government has allocated Rs 7.4 billion for building digital infrastructure and developing a supportive ecosystem. In a move to embrace emerging technologies, an Artificial Intelligence (AI) Center will be established in collaboration with the private sector. Additionally, value-added tax (VAT) on digital payments has been removed to encourage cashless transactions.
Tax exemption for IT and hotel sector
The government has decided to grant electricity tariff and income tax exemptions to the information technology and hotel sectors, treating them like special industries. A 75% income tax exemption will be given on revenue earned through IT service exports. Individuals residing in Nepal and selling IT services abroad will only be subject to a final 5% tax.
No income tax for startups with turnover up to 100 million
The government has announced a five-year income tax exemption for startup businesses with transactions up to NPR 100 million.
Youth and Employment Initiatives
A major highlight is the soft loan scheme of up to Rs 2 million aimed at empowering youth entrepreneurs. The Ministry of Youth and Sports has received significant budgetary support to implement its programs targeting youth development and employment generation.
Old age allowance eligibility raised to 70 years
The age for receiving the old age allowance has now been set at 70. However, this new provision will not apply to those already receiving the allowance.
Mandatory pesticide testing before sale of agricultural products
Mandatory pesticide testing will be required before the sale of fruits, meat, and food grains. Quick pesticide testing methods will be used in wholesale markets for fresh vegetables and fruits. Finance Minister Bishnu Paudel said the required manpower and technology for pesticide testing has been budgeted.
4,600 fewer development projects
Compared to last fiscal year, the government has cut 4,600 development projects. Finance Minister Bishnu Paudel announced that projects with budgets under NPR 30 million will not be included in the federal budget, leading to the reduction in project numbers.
30% of Nepal Telecom shares to be sold to public
The government will divest 30% of Nepal Telecom shares to the public. Currently, the government owns 91.53% of shares, and the general public owns only 8.47%.
Dearness allowance raised for civil servants, salaries not increased
While government employee salaries have not been increased, the dearness allowance has been raised to NPR 5,000. Finance Minister Bishnu Paudel said salaries couldn’t be increased due to lack of resources. The increase in allowance was made in a lump sum, not by job level.
Free cancer treatment for children below 14
The Kanti Children’s Hospital will be developed as a Center of Excellence. Children under 14 will receive free cancer treatment. The National Population Policy will be implemented. A Panchakarma center will be operated.
Madan Bhandari and Ganesh Man Singh parks to be built
The government will build parks named after Madan Bhandari and Ganesh Man Singh in the Kathmandu Valley. Finance Minister Bishnu Paudel announced that the Jarsing Pauwa Stadium and Ganesh Man Singh Park will be built in Shankharapur, and the Madan Bhandari Multi-purpose Park in Budhanilkantha-Gokarneshwor.
Licenses to be issued at provincial level
Driver’s licenses will now be issued at the provincial level.
95.81 billion budget for health
The government has allocated NPR 95.81 billion for the health sector for the upcoming fiscal year, although NPR 100 billion was expected.
Burn units in all provinces
The budget includes plans to operate burn treatment units in every province and expand burn care services at Bir Hospital.
Budget for education
Out of the total budget of NPR 1.964 trillion for FY 2025/26, the Ministry of Education, Science, and Technology has been allocated NPR 211.17 billion. This is an increase compared to the previous year’s NPR 203.66 billion.
10.19 billion for midday meals, free sanitary pads
The government has allocated NPR 10.19 billion for midday meals for students up to grade 5. According to Finance Minister Paudel, 2.8 million students will benefit. Free sanitary pads will be provided to female students, with NPR 1.29 billion allocated. 1.3 million students are expected to benefit.
Passport and property freeze for cooperative fraudsters
Assets and passports of those involved in fraudulent cooperative schemes—including officials, managers, and loan defaulters—will be frozen.
NPR 7.49 billion for Ministry of Land Management, Cooperatives and Poverty Alleviation
The Ministry of Land Management and Cooperatives has been allocated a budget of NPR 7.49 billion.
Security budget focuses on weapons and internal security
The government plans to purchase weapons and strengthen the military, police, and armed police with adequate resources. The army will be mobilized for national security, development, and disaster management. The government has prioritized defense, law enforcement, crime control, and public administration. Military equipment and security tools will be provided to enhance national defense and public safety.
