The government has announced a shift from populist budgeting toward a realistic and credible financial approach, aligning project management and annual budget preparation with national policies and priorities.
Through the endorsement of the Third Five-Year Strategy on Public Financial Management Reform, the Ministry of Finance (MoF) has introduced a comprehensive plan aimed at restoring public trust in the government’s budgeting process. The new strategy will remain in effect until 2030, according to the ministry.
The reform strategy focuses on key areas such as:
- Strengthening budget credibility and implementation monitoring,
- Reforming revenue management and intergovernmental fiscal coordination,
- Managing public debt and financial risks,
- Improving asset management, and
- Enhancing transparency and accountability in fiscal governance.
Amid growing criticism of previous populist budgets, the administration led by Prime Minister Sushila Karki has pledged to make the budget more realistic, evidence-based, and achievable. In recent years, Nepal’s government has consistently missed revenue collection targets and reduced spending during mid-term reviews.
According to the MoF, the goal of this new approach is to design a practical and actionable financial plan that accurately reflects the nation’s economic realities and supports effective implementation. To support this, the ministry has drafted several guidelines for annual and medium-term budget reforms.
Finance Secretary Ghanashyam Upadhyay stated that the government aims to set achievable revenue goals while ensuring fiscal discipline. “For this purpose, the government will conduct economic impact assessments to evaluate how spending in different sectors contributes to overall economic growth,” he said.
The new strategy also prioritizes expediting budget execution and ensuring the optimal use of state resources. It calls for stronger accounting systems, higher-quality financial reporting, and full compliance with standard procedures to improve budget credibility.
Furthermore, the MoF plans to ensure transparent procurement, strengthen internal audits, and modernize revenue collection systems through better coordination across government agencies.
A key component of the plan is the creation of an integrated financial transfer system linking the budgeting and reporting frameworks of federal, provincial, and local governments. The MoF stated that this integration will make fiscal transfers more predictable and transparent, enhance fiscal discipline, and strengthen public financial management at all levels of government.
