The Government of Nepal is set to introduce a significant shift in its budgeting process from the upcoming fiscal year 2082/83 by excluding small-scale or “scattered” projects—those with a budget under Rs. 30 million—from the national budget. This move, aimed at improving development efficiency and curbing political populism, comes through a legal and institutional overhaul spearheaded by the Ministry of Finance and National Planning Commission (NPC).
Legal Framework to Block Entry of Low-Value Projects
While previous attempts were made to reduce such projects through administrative decisions, lack of legal backing made enforcement difficult. This time, authorities have ensured that a legal filter is in place: under revised guidelines of the National Project Bank, no new project below Rs. 30 million can be registered into the system, effectively making them ineligible for inclusion in the federal budget.
According to NPC Vice Chairperson Prof. Dr. Shivaraj Adhikari, “We’ve built a system where such entries will be automatically blocked. Even if someone tries to push smaller projects, the system won’t accept them.”
This regulation, however, will apply only to new projects. Ongoing or previously approved projects requiring less than Rs. 30 million for completion will still receive funding as needed.
Key Changes in Budget Planning and Project Management
The newly restructured National Project Bank currently lists over 7,000 projects—revised down from nearly 18,000 during the previous budget cycle. According to NPC member Dr. Prakash Shrestha, the restructuring aims to improve realism in budget planning by aligning project registration, medium-term expenditure frameworks, and budget allocation processes.
“Projects must now come with detailed feasibility and planning to be accepted,” said Dr. Shrestha. “This will lead to more implementable budgets and reduce politically motivated entries.”
The Ministry of Finance has also reinforced its stance against populist budgeting. Finance Minister Bishnu Prasad Paudel recently stated in Parliament that the upcoming budget will be “realistic” and guided by long-term development planning rather than short-term popularity.
Institutional Coordination and Policy Support
The President’s address to Parliament on Baisakh 19 clearly outlined this approach. The government will reprioritize previously announced infrastructure projects and assign completion timelines to those expected to conclude within fiscal year 2082/83 or the current parliamentary term.
The policy document further commits to:
Reclassifying all physical infrastructure projects,
Estimating resource availability before budget commitments,
Suspending unfeasible projects, and
Scrapping poorly designed or low-utility initiatives.
Alignment with Economic Reform Recommendations
The move aligns with the recommendations of the High-Level Economic Reform Commission, led by former Secretary Rameshwor Khanal. The commission advised the federal government to avoid incorporating small and medium-sized local development projects into the central budget and focus instead on high-return, impactful investments.
It also recommended an integrated Project Bank Information System across federal, provincial, and local governments to avoid duplication and oversight lapses.
The government has committed to implementing the commission’s report starting with fiscal year 2082/83.
Outlook: Toward Technocratic and Efficient Budgeting
By prioritizing technically sound, well-planned projects and filtering out politically motivated, scattered programs, the government aims to give 80% weight to technical merit in budgeting decisions. This shift marks a significant attempt to transform Nepal’s budget culture from a politically influenced exercise to a performance-driven development strategy.
If implemented as outlined, this could be a turning point in improving project execution, minimizing delays, and ensuring better value for taxpayer money in Nepal’s development landscape.
