Ambitious fiscal plan prioritizes growth, but execution and debt sustainability remain key concerns
Kathmandu, Nepal: The government has unveiled a Rs 2.124 trillion budget for the upcoming fiscal year 2083/84, setting an ambitious fiscal agenda despite persistent revenue shortfalls and weak public spending capacity.
Presenting the budget at a joint session of the Federal Parliament on Friday, Finance Minister Dr. Swarnim Wagle emphasized economic recovery, production growth, job creation, and infrastructure expansion as central priorities.
Of the total outlay, 59.8 percent has been allocated to recurrent expenditure, primarily covering salaries, social security, and administrative costs. Capital expenditure accounts for 20.3 percent, targeting investments in infrastructure sectors such as transport, energy, irrigation, health, and education. The remaining 19.9 percent has been earmarked for financial management, including debt servicing obligations.
The government aims to mobilize Rs 1.405 trillion in revenue. However, with revenue growth slowing in recent years and current fiscal performance falling short of targets, experts view this goal as highly challenging. Additionally, the budget anticipates Rs 61 billion in foreign grants.
To bridge the financing gap, the government plans to raise Rs 247 billion in foreign loans and Rs 419 billion through domestic borrowing, indicating continued reliance on debt financing. Economists have cautioned that rising public debt could pose long-term fiscal risks if not managed prudently.
The budget outlines measures to boost productive sectors, modernize agriculture, revive tourism, and enhance investment in information technology and industry. It also underscores the need for stronger private sector engagement and a more investment-friendly business climate to stimulate economic activity and generate employment.
However, concerns persist over implementation. Capital spending has remained consistently weak, with delays in project execution and low absorption capacity undermining development outcomes. Analysts argue that without significant improvements in governance, procurement efficiency, and project management, the effectiveness of the budget may be limited.
At a time of declining revenue performance and mounting debt pressures, the success of the budget will hinge on the government’s ability to enhance revenue mobilization, ensure efficient expenditure, and maintain fiscal discipline.
While the size of the budget signals an expansionary stance aimed at stimulating growth, its real impact will ultimately depend on credible and timely implementation.
