Development partners have called on the Government of Nepal to adopt a more realistic and resource-sensitive approach while preparing the federal budget for Fiscal Year 2025/26. During a high-level discussion organized by the Ministry of Finance on Tuesday, representatives of international development agencies advised Finance Minister Bishnu Prasad Paudel to draft a budget that aligns with Nepal’s actual resource availability and institutional capacity for implementation.
Participants in the discussion included representatives from a wide range of bilateral and multilateral organizations, such as India, China, the United States, the United Kingdom, Japan, South Korea, Australia, Norway, Germany, Finland, the European Union, the World Bank, the Asian Development Bank, the United Nations, the International Monetary Fund, and the World Health Organization, among others.
The development partners collectively emphasized that overambitious budgets, when detached from financial realities and administrative capabilities, risk undermining credibility and efficiency. They encouraged the government to prioritize reforms and allocate funds to high-impact, feasible projects.
In response, Finance Minister Paudel assured development partners that the upcoming budget would be grounded in economic realism. He reiterated the government’s commitment to ongoing economic reforms, which, according to him, have already started yielding positive results.
Minister Paudel emphasized that the new budget would aim to:
- Stimulate private sector engagement
- Generate employment opportunities
- Boost domestic production and productivity
- Strengthen overall macroeconomic stability
Given Nepal’s limited financial resources, the minister noted that the government would reduce general expenditures and focus investments on high-yield and priority projects. He also reaffirmed Nepal’s intent to improve the effectiveness of foreign assistance by aligning it with national needs and ensuring better capital expenditure performance.
The discussion comes at a time when Nepal faces growing fiscal pressures and underperformance in revenue collection and public spending, highlighting the urgent need for prudent and accountable budgeting practices.
