Nepal Budget 2083/84: Major Reform Initiatives and Their Challenges Presented by Finance Minister Swarnim Wagle
Photo credit, RSS
On Friday, during the joint session of Nepal’s federal parliament, Finance Minister Swarnim Wagle presented the budget for the fiscal year 2083/84. He asserted that the country stands at a decisive point for major economic reforms and claimed that the vicious cycle of political instability has ended.
“We believe this budget will serve as a credible policy tool reflecting the rightful expectations of all Nepalis living at home and abroad for a production-oriented economy, enhanced international reputation, and technology-friendly transformation,” he stated.
Following this, Wagle presented a budget totaling NPR 21 trillion 24 billion 34 crore.
Although experts raised questions about some of the numerical figures in this budget, they acknowledged that the extensive list of ‘major reforms’ included in the Finance Minister’s statement clearly demonstrates the government’s priorities. However, they also noted that the focus now shifts to effective implementation.
Former Finance Minister Rameshwar Khanal praised the presented budget as “historically reform-oriented.”
“The list of solid reforms has never been this extensive in any previous budget. This budget is clear and precise,” he remarked. “If the reforms unfold as the Finance Minister has outlined within a year, it will be a significant milestone.”
Economist Chandramani Adhikari described it simply as a “reform-oriented” budget.
“The Finance Minister referred to it as a ‘roadmap for transformation.’ Though it may not yet be historic, it lays the foundation for historic reforms.”
“If transparency in resource allocation is ensured, good governance maintained, and resource leakage stopped, effectiveness will improve. Otherwise, significant reforms are unlikely.”
Hopes and Doubts Surrounding Improvements in Capital Expenditure
Finance Minister Wagle stated that the government is “committed to initiating an aggressive series of operational reforms to change the pace and rhythm of capital expenditure.”
He detailed that 59.8%, or NPR 12 trillion 70 billion 58 crore, of the total allocation is designated for current expenses, and 20.3%, or NPR 431 billion 10 crore, for capital expenditure.
Nepal has long faced difficulty in executing capital expenditure effectively.
Former Finance Minister Barsaman Pun expressed doubts about the budget’s implementation raised by Finance Minister Wagle. Labeling the budget as ‘heard but not seen,’ he added: “A budget that is only heard of will not generate resources, and with uncertainties in implementation, prospects appear limited.”
Former Minister Khanal acknowledged the historic reform elements in the budget but pointed out that expenditure estimates appear beyond practical capacity. “The revenue targets seem high and the expenditure estimates exceed capacity,” he noted.
Economist Adhikari concurs on this point.
“The government is trying to make leaps through improving transparency, accountability, and governance, but production doesn’t rise without investment, and without production, people won’t have money in their hands.”
“Capital expenditure faces challenges in achieving the targeted 7% economic growth,” he added.
Nevertheless, Finance Minister Wagle has presented foundations for improving implementation capacity.
“We will initiate mission models to improve procurement processes, enhance flexibility in resource management, operationalize alternative financing, maintain project leadership stability, and ensure project completion within designated costs and timelines,” he explained.
He further mentioned establishing arrangements to spend and track ‘mobilization’ advance funds solely for related projects.
Promises for Legal Reform
Photo credit, Nepal Photo Library
Former Finance Minister Khanal considers the proposals for legal reform the most critical aspect.
“He (Wagle) stated plans to repeal certain laws and additional repeals are planned. Amendments to the Company Act are also on the agenda. These reforms come with detailed documentation.”
Finance Minister Wagle emphasized that “policy and legal frameworks will be arranged to promote investment, economic reform, and facilitate seamless service delivery.”
“Dozens of Acts, regulations, and procedures will be built, replaced, or amended. Proposals to repeal 15 laws will be submitted to parliament.”
Economist Adhikari notes that Nepal’s economic laws face numerous issues.
“Nepal has many unnecessary laws and too few that are necessary. There are irrelevant and controversial laws. Therefore, improving the Company Act is positive,” he said. “However, it’s not possible to do all reforms in one year.”
“If progress is made with defined timelines, some achievements can be realized.”
How Will Procedural Simplification Be Achieved?
Economic and business processes in Nepal often become cumbersome, raising continuous concerns.
Former Finance Minister Khanal stated that procedural simplification in these areas identified in the budget will represent another major step toward improvement.
“For example, facilitating foreign investors, ensuring one-time approval in forest clearance and eliminating repeated approval requirements, are part of this important step,” he said.
In the budget, Finance Minister Wagle also announced measures to ease the process for Nepalis investing abroad. This has been a topic of discussion due to outdated legal provisions.
He promised the removal of the pre-approval practice for automatic approval of foreign investment. “Processes for remitting service fees, royalties, and technology payments abroad will be simplified.”
Economist Adhikari advises the government to first identify sectors with procedural complexities.
“By identifying procedural problems in industry, taxation, investment, and trade, reforms can be targeted effectively.”
Streamlining Bureaucracy and Leveraging Technology
The reform agenda presented by Finance Minister Wagle includes aims to enhance the efficiency and responsiveness of the bureaucracy.
When announcing employee salary increases, he said the government’s goal is to enable employees to lead dignified lives, perform at high levels, and be accountable.
He also described “expenditure reduction and efficiency enhancement” as additional institutional reform aspects.
Former Finance Minister Khanal stated these initiatives will play a major role in improving state efficiency. “If these programs are implemented, major reforms will occur.”
Mentioned plans include using digital time cards in government offices and establishing the national ID card system as the foundation of public services to strengthen systems related to land registration, transport, passports, civil registry, and social security management.
Economist Adhikari points out that the effectiveness of bureaucracy and e-governance depends largely on how robust government infrastructures become.
“Servers going down in the land revenue office, nonfunctional computers, and issues in customs offices still persist. Even the National ID system went down recently. Hence, if improvements don’t happen, just telling employees what to do is insufficient.”
“The situation is not limited to Kathmandu but needs consideration even in remote districts like Kalikot.”
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