Nepal unveils $13.8B reform budget after political shift

KATHMANDU, Nepal (AFP) — Nepal’s government unveiled on Friday its first budget since sweeping to power after a youth-led uprising, promising reforms and a push to revive growth following months of political turmoil.

Prime Minister Balendra Shah, 36, assumed office in March after a landslide victory for his party in the first elections since the deadly 2025 uprising ousted the previous government.

Finance Minister Swarnim Wagle presented a 2.1-trillion-rupee ($13.8 billion) spending plan focused on boosting infrastructure, technology, health and education, while pledging to stabilize the economy.

“The nation is standing at a decisive crossroad of comprehensive economic reform,” Wagle said in Parliament. “The vicious circle of political instability has come to an end.”

The budget seeks to spur domestic demand by doubling the income tax exemption threshold and raising salaries for government employees, while also introducing reforms aimed at improving the business environment and attracting investment.

Poor planning and sluggish bureaucracy hampered the country’s growth in previous years, with the government routinely failing to spend funds allocated in annual budgets.

“This budget … attempts to redefine the state’s role not just as a controller and a regulator but an institution that creates opportunities,” Wagle said, promising more jobs and improving living standards.

The nationwide demonstrations in September 2025, initially sparked by anger over a brief government ban on social media, were driven by deeper frustration over economic hardship and corruption.

Violence during the protests killed at least 76 people.

Rameshore Khanal, who served as finance minister in the interim administration that led the country following the uprising, lauded the budget and said it had steered away from populist agendas.

“This budget focuses on reforms more than ever before … it will be a turning point if implemented effectively,” Khanal told AFP.

Business leaders also welcomed the proposals, particularly measures aimed at easing regulatory burdens.

The budget would make “it easier for investors to navigate the complex legal regime in the country,” said Birendra Raj Pandey, president of the Confederation of Nepalese Industries.

On Wednesday, the government’s economic survey projected growth of 3.85% as Nepal grapples with the impact of global economic pressures.

In April, the World Bank said better political stability and progress in structural reforms could boost investor confidence in the Himalayan nation of 30 million people.

Wagle said that “the economy is expected to grow by 7% in the coming financial year as a result of the reform programs, while the inflation rate will remain at 6%.”

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By Agence France-Presse