The National Planning Commission (NPC) has urged the Ministry of Finance (MoF) to significantly reduce the number of problematic and underperforming projects in anticipation of resource limitations for the fiscal year 2025/26.
In its report on policy and programme discussions for the upcoming budget, the NPC emphasized the mounting financial pressure on sectors with mandatory responsibilities. It recommended the discontinuation of failed projects to better manage scarce resources.
“There is little possibility of significant reform in revenue mobilisation in the upcoming fiscal year. Foreign grants have gradually decreased over recent years, and the procurement of foreign loans has not aligned with commitments,” the report noted. In light of these challenges, the NPC called for strategic resource management in the budget formulation process.
The commission has proposed that the national budget be limited to Rs 1,965 billion. Rising expenditures—driven by public debt servicing, employee remuneration, and social security commitments—are straining the country’s fiscal capacity, leading to reduced allocations for development projects.
Additionally, reconstruction efforts following the Jajarkot earthquake and water-induced disasters in September 2024, as well as growing demands for social security and health insurance, have further complicated budgetary priorities.
The NPC warned that the increasing financial obligations of government ministries and agencies are constraining the flexibility needed to fund other sectors.
