Parliament Passes Landmark Federal Budget Amid Coalition Tensions

KATHMANDU — Following weeks of intense coalition debates and multiple policy deadlocks, Nepal's Federal Parliament has officially endorsed the annual budget for fiscal year 2026/27. The total outlay of NPR 1.86 Trillion prioritizes strategic highway connectivity, hydroelectric transmission expansion, and digitalization of public service delivery.

Finance Ministry officials confirmed that the approved budget allocates NPR 352 Billion specifically for capital expenditure, representing a 14% increase over the previous fiscal period. The remaining expenditure is structured toward recurring administrative costs, provincial fiscal transfers, and public debt servicing requirements.

Key Strategic Priorities & Infrastructure Grants

The primary highlight of the budget is the expedited funding earmarked for national pride projects, including the completion of the Fast Track Expressway connecting Kathmandu to Nijgadh, and the multi-phase East-West Railway electrification works.

"Our primary economic imperative is elevating capital expenditure performance. Every rupee allocated toward transmission corridors directly unlocks Nepal's clean energy export potential." — Ministry of Finance Official Statement

Energy infrastructure received significant attention, with NPR 84 Billion pledged toward cross-border high-voltage transmission lines connecting Nepal's eastern hydro-hubs to Indian and Bangladeshi power grids.

Coalition Compromises and Tax Revisions

To secure the vote, lawmakers introduced targeted revisions to luxury imports taxes while reducing custom duties on raw industrial inputs. Agricultural subsidies were also preserved at NPR 30 Billion to cushion farmers against input inflation.

• Capital Expenditure Boost: NPR 352 Billion allocated for national infrastructure.
• Clean Energy Export: Priority funding for 400kV cross-border transmission lines.
• Digital Transformation: Full automation of tax filings and enterprise registration systems.

With the fiscal bill now passed, government ministries are scheduled to begin immediate tender releases for high-priority road corridors before the autumn season.