Nepal Federal Budget FY 2019-20: Highlights & Announcements

The budget for FY 2019-20 also introduced the President Educational Fund




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Nepal Federal Budget FY 2019-20: Highlights & Announcements

The much-awaited Nepal Federal Budget 2019-20 (2076-77) was unveiled on May 29, 2019.

Amid high expectations from industry and public, Nepal Government has announced its much-awaited Federal Budget for FY 2019-20 on May 29, 2019.

Finance Minister Yubaraj Khatiwada presented an NPR 1.53 trillion budget for the new fiscal, up from NPR 1.315 trillion for FY 2018-19.

Speaking at the budget unveiling event, Minister Khatiwada said that a foundation has been laid to achieve close to the two-digit economic growth of 8.5 percent through the new budget.

The newly-released budget aims to end absolute poverty and involve locals’ participation in development projects.

Finance Minister Dr Yuba Raj Khatiwada

Nepal Federal Budget FY 2019-20: Key Highlights

1) Sources Of Finance

The Nepal Government has set a revenue collection target of NPR 981 billion to implement the budget. Besides, it has targeted to draw a grant and borrowed capital of NPR 57.99 billion and NPR 298 billion, respectively. Additionally, the budget aims to collect NPR 195 billion as domestic borrowing.

Nepal: Sources of Financing: Nepal Federal Budget FY 2019-20

2) Budget Breakdown Sector Wise FY 2019-20

Here is a sector-wise breakdown of Nepal Federal Budget FY 2019-20:

Sectors Budget Allocation (NPR in million)
Economic Affairs 5,41,367.00
General Public Service 4,59,053.20
Education 1,63,755.90
Housing & Community Amenities 78, 754.5
Health 56,118.80
Public Order & Safety 78,404.40
Social Protection 71,385.90
Defence 50,101.10
Environmental Protection 26, 789.7
Recreation, Culture & Religion 7,231.60

3) Nepal Budget Key Highlights – FY  2019-20

  • The introduction of the new budget has further eased the non-taxable income limit, up from NPR 3,50,000 in FY 2018-19 to NPR 4,00,000 in FY 2019-20. In case of couples, the non-taxable ceiling has been increased up to NPR 4,50,000
  • The government has resolved to nationalize encroached public land within the upcoming fiscal year 2019-20
  • The new budget will facilitate a tunnel along the Tinkune-Koteshwar-Jadibuti route, an underpass in New Baneshwor and a flyover between Tripureshwar-Maitighar
  • A budget of NPR 7.7 billion has been allocated for rail, metro rail, and monorail
  • The FY 2019-20 budget will facilitate the construction of a domestic airport in Kavre district
  • The government will connect all administrative centers of all local levels with blacktopped roads within four year
  • The budget will also provision a 15 percent increment on public welfare advertisement fund
  • It also provisions a health insurance coverage for those joining the government’s health insurance scheme by 100 percent
  • With the introduction of the new budget, girls studying in public schools will be provided free sanitary pads

4) Transportation

Nepal Transportation

The government has given transportation top priority through the new budget by allocating a sum of NPR 163 billion to the sector.

Finance Minister Yubaraj Khatiwada said that the government would utilize the new budget to build tunnel highways, flyovers, and waterways in the country. The government also plans to invest in building railways and airports.

  • NPR 19.18 billion has been allocated to expand the East-West Highway into a four-lane road
  • NPR 12.20 billion is set aside for blacktopping of the 435 km-section of the Mid-hill Highway
  • NPR 12.63 billion is allocated for blacktopping of Hulaki Highway, connecting several Terai districts
  • NPR 5.06 billion has been dedicated for key corridor projects such as Koshi, Kaligandaki, Karnali and Mechi
  • NPR 4.82 billion is set aside to Madan Bhandari Highway, connecting Chatara, Dharan, Gaighat, Hetauda, Katari and Sindhuli
  • NPR 1.81 billion is being invested for Ring Road expansion and NPR 610 for completion of Kanti Highway, connecting Satdobato with Buddha Chowk

4) Irrigation


A budget of NPR 23.63 billion has been allocated for the irrigation sector. Rani Jamara and Bheri Babai division have been given NPR 2.5 billion. A total of NPR 960 million has been allocated for irrigation projects in the Tara-Madhes region.

5) Elderly Allowance

Nepal Elderly Allowance

The government increased the elderly allowance from NPR 2,000 to NPR 3,000 under the FY 2019-20 Budget.

As per Minister Khatiwada’s announcement, people above 70 years will be entitled to an allowance of NPR 3,000 per month. The government scheme will cover more than 130,000 individuals.

Besides, the budget also covers health insurance worth NPR 100,000 for elderly citizens.

6) Health Insurance

Nepal Health Insurance

The Federal budget FY 2019-20 provisions health insurance to all citizens and has allocated NPR 5 billion for the same.

Additionally, the budget also allocated NPR 6 billion for child health reforms. Through the budget, the government aims to build at least one health institution in all local units and has allocated NPR 5 billion for this reason.

NPR 400 million has been set aside for the construction of Bir Hospital at Bhaktapur’s Duwakot. Overall, a budget of NPR 68.78 billion has been dedicated to the health sector.

7) Education

Nepal Education

As part of the Annual Budget Statement 2019, the Nepal government allocated NPR 163 billion budget for education and science & technology.

The budget for FY 2019-20 also introduced the President Educational Fund and unveiled the ‘One School, One Game Teacher’ campaign with a budget of NPR 5 billion for the campaign.

An amount of NPR 8 billion has been allocated to construct 300 school buildings. Additionally, NPR 3.89 billion has been allocated for scholarship.

8) Electricity

Nepal Electricity

He also said that electricity production will double in the coming fiscal year. A budget of NPR 55.30 and NPR 89.95 billion has been allocated for provinces and local units, respectively.

9)  Gautam Buddha International Airport

Gautam Buddha International Airport

An amount of NPR 3.34 billion has been allocated for completion of Gautam Buddha International Airport’s remaining works and NPR 8 billion for the currently Pokhara Regional International Airport.

10) Budget FY 2019-20: Other Schemes & Programs

In the new budget announced on May 29, 2019, the government also announced several special schemes for the education, employment, tourism, and several other sectors. Let’s take a look.

Hike in Government Officials Salary & Social Security Allowance

The Finance Minister announced an increase in the salary of non-gazetted government officials by 20 percent. Besides, officials in the gazetted third class and above get a hike of 18 percent.

After the announcement, gazetted officials get a minimum of NPR 9,824 and non-gazetted officials, NPR 3,245. The increment covers civil servants, Nepal Police, Armed Police Force and Nepal Army personnel along with those receiving allowances from state coffers.

With this decision, civil servants are getting a raise in pay after a gap of two years.

The government has also raised social security allowance by NPR 1,000 per individual.

Employee Earlier (in NPR) Now (in NPR)
Non-gazetted Fourth 17,225 20,892
Non-gazetted Third (Mukhiya) 18,338 22,005
Non-gazetted Second (Kharidar) 22,163 26,595
Gazetted First (Subba) 23,500 28,200
Gazetted Third (Officer) 30,500 35,990
Gazetted Second (Under Secretary) 34,213 40,377
Gazetted First (Joint Secretary) 40,150 47,377
Gazetted Special (Secretary) 41,413 60,667
Chief Secretary 54,588 64,414

11) Prime Minister Employment Program

The government has decided to give more emphasis for the effective implementation of the Prime Minister Employment Program (PMEP) through the FY 2019-20 budget.

Minister Khatiwada said that unemployed people who have been listed under the Employment Service Centers throughout Nepal will be employed for public works.

“Such unemployed people will also be utilized in infrastructure and construction works implemented by using fiscal equalization fund and special grants provided by the federal government to sub-national governments,” said Khatiwada.

The government has set aside a budget of NPR 5.1 billion for the specialized employment program.

It has also promised to provide seed capital for self-employment and entrepreneurship.

The government is also promoting Afno Gaun, Aafai Banaun campaign for development works, creating more jobs at the local level.

12) Post-Quake Reconstruction

Nepal Post-Quake Reconstruction

A budget of NPR 141 billion has been allocated for post-earthquake reconstruction activity in all affected districts.

During the announcement, Minister Khatiwada informed that the government will conduct a resurvey to see if there were any earthquake victims that were left out during the previous survey.

“Re-survey will be conducted in order to identify the victims who have not been included in the list of beneficiaries of the housing reconstruction and retrofitting grant,” said Minister Khatiwada.

However, the new budget allocated for reconstruction activity NPR 141 billion is less than the previous year’s budget allocation of NPR 151 billion.

NRA officials say that the reconstruction work will not be affected due to the less budget allocation.

13) Tourism

Visit Nepal 2020

NPR 22.68 billion has been allocated as the budget for Nepal tourism sector for FY 2019-20, which will be used to celebrate and promote the government’s biggest tourism campaign ‘Visit Nepal 2020’. The newly-introduced budget will also be mobilized to promote the one tourism door policy, Nepal’s adventure tourism and internal tourism.

Additionally, the government has also emphasized promoting Meeting, Incentive, Conference and Exhibition (MICE) tourism to bring high spending to the country. As part of the budget, it laid focus on building roads and meeting venues to promote MICE tourism.

“The government will expedite development of infrastructure, identify new tourism products and promote existing products as part of the preparation for the Visit Nepal Year 2020 campaign,” said Minister Khatiwada.

14) Media Industry

Media Industry

The new budget will support the integration of Radio Nepal and NTV. It will also make cybersecurity laws more stringent. The government will also work on establishing Nepal’s own satellite. The Digital Nepal framework will also be promoted and brought into operation.

15) Banking, Private Sector, and Capital Market

The budget FY 2019-20 will be mobilized to promote the merger of big Banking Financial Institutions (BFIs) and insurance companies. It will be used to promote the National payment gateway.

Electricity and drinking water payments will be made digital, besides the PAN system will be implemented in the share market. SEBON and NEPSE will also be promoted through the budget.

The budget will also promote NRN’s participation in the capital market.

Hope the new budget 2019-20 (2076-77) will help the government make some landmark achievements as we have seen in the last fiscal year!

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