Government Prioritizes Reservoir-Based Hydro Projects, Digital Advancement, and Aviation Infrastructure in Fiscal Year 2025/26 Budget

Strategic Insights -

The government of Nepal has outlined key priorities for the upcoming Fiscal Year 2025/26 budget, focusing on the development of reservoir-based hydro projects, enhancement of aviation infrastructure, and advancement in digital technology. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel emphasized the need for a productivity-driven development model to accelerate sustainable economic growth, citing technological innovation, entrepreneurship, and investment in emerging sectors as key drivers.

Key Takeaways:

  • The government will prioritize reservoir-based hydro projects to meet dry-season demand, with a focus on developing domestic and cross-border transmission infrastructure, solar energy, and electricity exports.
  • The budget will promote domestic raw materials, startup support, and local products, with an emphasis on export-oriented production, industrial infrastructure, and supply chains.
  • The government will invest in digital infrastructure, attract private investment in ICT, and enhance e-governance services, ensuring cybersecurity and simplification of services.
  • Priority will be given to multi-sector reforms, including investment-related challenges, and strengthening collaboration among federal, provincial, and local governments.
  • Capital allocations will focus on well-prepared and high-yielding projects, with an emphasis on effective revenue mobilization and responsible public debt management.
  • Public services will be integrated through the National ID and Citizen App, and economic governance will be strengthened through legal and regulatory reforms.
  • The government plans to mechanize and commercialize agriculture to increase productivity and food security, promote organic farming, and develop skilled human resources.
  • Development of quality and practical education and health services will be prioritized, with a focus on human capital development and promotion of entrepreneurship and skilled workforce.

Statistics:

  • The government aims to prepare for graduation from the LDC category by 2026 and achieve Sustainable Development Goals (SDGs) by 2030.
  • The budget will prioritize high-yielding projects, ensuring sustainability and returns.
  • Public debt will be used in projects of national priority that yield high returns, ensuring sustainability.
  • The government plans to announce programs to develop skilled human resources based on market demand and promote self-employment through youth-focused entrepreneurship and technology use.
  • Public services will be integrated through the National ID and Citizen App, ensuring transparency and efficiency.

Sources:

  • "Principles and Priorities of the Budget of 2025/26", presentation by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel
  • Economic Reform Commission
  • Budget document presented at the Parliament