National Planning Commission (NPC) member Dr Sanjay Acharya has said the upcoming Fiscal Year (FY) 2026/27 budget will focus on strengthening good governance and laying the foundation for long-term economic improvements through reforms and high-multiplier projects.
Speaking at a discussion programme organised by the Management Association of Nepal (MAN) on April 24, Dr Acharya said the budget is expected to create a framework for projects, programmes, and policy reforms that can generate broader economic benefits.
He cautioned, however, that the public should not expect immediate solutions to long-standing structural issues. “Existing problems were not created overnight, so they cannot be solved by a single budget,” he said, adding that the NPC will revise procedures for equalisation and special grants while encouraging provincial and local governments to become more self-reliant.
Dr Acharya also highlighted key economic challenges, noting that Nepal’s labour productivity remains low relative to wages and that high transportation and logistics costs are discouraging foreign direct investment. He stressed the importance of stronger engagement with the private sector, which he said contributes around 80 percent of the economy and 85 percent of employment.
On tax policy, he said global practices since the 1980s have focused on lowering tax rates while expanding the tax base, adding that a more voluntary and reasonable taxation system could improve compliance and increase revenue collection. He also pointed to Nepal’s limited access to global climate funds, calling for more equitable utilization under climate justice principles.
Former Finance Minister Dr Yuba Raj Khatiwada suggested revising outdated formulas for royalties, equalisation grants, and special grants, and emphasized that public-private partnerships would succeed only if the private sector is willing to share risks in infrastructure development.
Former Chief Secretary Dr Baikuntha Aryal, presenting a working paper, said the budget should prioritize production, employment, and investment growth while improving allocation efficiency and strengthening implementation capacity. He proposed performance-based incentives, better monitoring systems, and a shift toward “agency budgeting” to improve spending flexibility and reduce reallocation issues.
He also suggested reforms in social security, including direct government coverage of health insurance costs equivalent to 10–11 months of allowances and partial premium support.
Other participants also shared their views. Dr Ramesh Chandra Poudel emphasized the role of digitalisation in improving governance. Sudarshan Raj Pandey, former president of the Institute of Chartered Accountants of Nepal, noted that capital expenditure remains low at 17–20 percent of the total budget, weakening capital formation due to poor execution. Meanwhile, Nepal Chamber of Commerce Senior Vice President Deepak Malhotra called for revitalizing sectors such as real estate and construction to boost demand, and advocated maintaining multiple VAT rates.







