The National Planning Commission (NPC) has reduced budget ceilings for most ministries and lowered the overall expenditure cap for the fiscal year 2026/27, citing the need for stronger financial discipline and better alignment with national development plans.
However, the Ministry of Finance (MoF) stands as an exception, with its budget ceiling increased to Rs 53.51 billion from Rs 38.99 billion this fiscal year. Officials attribute the rise to funding requirements for projects under the Millennium Challenge Corporation (MCC), including around Rs 10 billion allocated for MCA-Nepal initiatives.
The NPC has set the total federal budget ceiling at Rs 1.89 trillion for the upcoming fiscal year. This represents a reduction of Rs 76 billion compared to the current year, as recommended by the National Resource Estimates Committee (NREC), with the aim of maintaining consistency between annual budgets and periodic plans while promoting economic stability.
Among ministries facing major cuts, the Ministry of Physical Infrastructure and Transportation saw its ceiling drop by Rs 28 billion to Rs 123 billion. Despite this, the Kathmandu-Tarai Fast Track Project received an increased allocation of Rs 31 billion, up from Rs 24.49 billion.
Other reductions include the Ministry of Industry, Commerce and Supply, whose budget ceiling declined to Rs 8.31 billion, and the Ministry of Communication and Information Technology, which saw its limit reduced to Rs 6.99 billion. The Ministry of Water Supply also faced a cut, with its budget ceiling set at Rs 20 billion. Meanwhile, the Ministry of Labor, Employment and Social Security received a nearly unchanged allocation of Rs 1.60 billion.
As per regulations, the NREC must determine budget ceilings by mid-February. Although the government is expected to stay within these limits, past trends show that actual expenditures have often exceeded the approved ceiling, violating fiscal discipline rules.
