Nepal’s Fiscal Journey: From NPR 5.25 Crore to NPR 18.60 Kharba in 74 Years

Nepal’s national budget has undergone a massive transformation in size and structure over the last seven decades. From a humble beginning of NPR 5.25 crore in B.S. 2008 (1951 A.D.), the budget size has ballooned to NPR 18.60 kharba (trillion) in the fiscal year 2081/82 — a staggering 35,428-fold increase. This growth is not just numeric; it reflects the nation’s political evolution, economic ambitions, and developmental challenges.

First Budget: The Foundation (B.S. 2008)

After the fall of the Rana regime, Nepal presented its first formal budget in 2008 B.S. by then-Finance Minister Suvarna Shamsher. The total size was NPR 5.25 crore — mostly for administrative functions and basic infrastructure under an interim government.

First Elected Government Budget: B.S. 2016/17

Eight years later, in B.S. 2016/17, Nepal’s first democratically elected government under B.P. Koirala presented a budget of NPR 24.98 crore. This marked the beginning of parliamentary financial accountability. The increase was modest in terms of today's scale, but it laid the foundation for future planning.

Planned Development and Panchayat Influence

Nepal began its journey of planned development in B.S. 2013, adopting five-year periodic plans. However, due to political instability and change in governance (elected to Panchayat), there was a discontinuity in planning. By B.S. 2019/20, under Panchayat rule, the budget increased only slightly to NPR 29.78 crore — just a 19.21% rise in 3 years, showing sluggish fiscal progress.

Multiparty Democracy and Fiscal Expansion

After the 2046 People's Movement, Nepal embraced multiparty democracy. The budget under the elected government in B.S. 2048/49 was NPR 26.64 arba — a massive 89.45 times increase compared to the Panchayat-era budget. This was a turning point reflecting democratic commitment to development, education, health, and infrastructure.

Breaking the “Kharba” Barrier: B.S. 2060/61

During the reign of King Gyanendra, Nepal’s national budget crossed the “kharba” mark for the first time. A total of NPR 1.02 kharba was allocated — a 3.82x growth compared to post-democracy budgets. Despite political regression at the time, the budget expanded significantly, driven by growing public administration and infrastructure needs.

Republican Nepal and Budget Acceleration

• In B.S. 2065/66, after Nepal was declared a republic, the budget growth hit 39.64%, the highest single-year increase. This reflects both political hope and reconstruction demands in a transitioning state.

• The 2072 constitution also influenced budget momentum. The year before the constitution’s adoption (B.S. 2072/73) saw a 32.52% jump in budget size — reflecting the fiscal optimism during state restructuring.

Periods of Decline and Crisis

Despite long-term growth, Nepal experienced budget contractions during key economic crises:

1. B.S. 2077/78:

   • Budget growth went negative due to COVID-19. Lockdowns and revenue shortfalls led to reduced fiscal spending — a rare occurrence in Nepal’s history.

2. B.S. 2080/81:

   • Economic slowdown due to import restrictions, inflation, and falling revenue shrunk the budget by 2.34%. This was the aftermath of global instability and domestic policy tightening.

Recovery & Recent Trends

• B.S. 2078/79 saw a moderate recovery with 11.73% growth, as the economy rebounded post-pandemic.

• B.S. 2079/80 showed 8.80% growth, again hinting at fiscal caution.

• In the current fiscal year 2081/82, the government presented a NPR 18.60 kharba budget — 6.32% higher than last year. Although moderate, this budget size is near the National Planning Commission’s ceiling of NPR 19 kharba.

The Ministry of Finance initially aimed for a lower ceiling but increased the allocation at the last moment — a common trend in Nepal’s budgeting practice.

Deeper Fiscal Insights