Govt unveils Rs 1,647.57 billion budget for FY 2021-22

NL Today

  • Read Time 5 min.

Kathmandu: The government on Saturday unveiled a budget of Rs 1,647.57 billion for the Fiscal Year 2021-22.

Out of the total budget, the government has allocated Rs 678.61 billion as recurrent expenditure and Rs 347.26 billion as capital expenditure. Likewise, Rs 207.97 billion has been set aside for financing purposes.

The source of financing will be Rs 1,002 billion from revenue, Rs 63.37 billion from foreign grants, Rs 309.2 billion from foreign loans, and Rs 250 billion from domestic borrowing.

A total of Rs 37.53 billion budget has been allocated for the Covid-19 response. The government has allocated Rs 26.75 billion for the vaccination campaign.

Minister for Finance Bishnu Poudel made public the budget for the coming fiscal year from the Office of Prime Minister and Council of Ministers, Singha Durbar.

Budget size: Rs 1,647.57 billion 

The government has allocated Rs 1,647.57billion to implement policies and program of the coming Fiscal Year. Of the total allocation, Rs 678.61 billion is for current expenditure, Rs 347.26 billion for capital expenditure, and Rs 207.97 billion is for financing.

Salary of civil servants increased by Rs 2,000

The government has increased the salary of government employees by Rs 2,000 per month. Finance Minister Poudel said that the decision was taken to boost the morale of the employees amidst the pandemic. The dearness allowance will be continued, he added.

Development Partnership Program scrapped

The government has scrapped the controversial Local Infrastructure Development Program. The government had allocated Rs 6.6 billion under this program for FY 2020/21.

Budget allocated for construction of Ram Temple

The government has allocated a budget for the construction of a Ram Temple at Ayodhyapuri in Chitwan. Finance Minister Poudel shared that the budget has been allocated for the infrastructure development of religious places across the country including Ayodhyapuri in Chitwan. However, he did not disclose how much money was allocated for the construction of the temple.

The government has allocated Rs 33.55 billion for post-earthquake reconstruction.

Rs 10.3 billion for railway projects

Finance Minister Poudel said that a detailed feasibility study of Kathmandu-Raxaul and Kerung-Kathmandu-Pokhara will be completed and announced that Rs 10.3 billion has been allocated for railway projects.

Rs 6.39 billion budget for Postal Highway

Finance Minister announced that Postal Highway (Hulaki Rajmarga) will be completed by next FY with an allocation of Rs 6.39 billion budget.

Rs 8.15 billion allocated for Fast Track

Rs 8.15 billion spending plan announced for Kathmandu-Terai/Madhesh Expressway (Fast Track).

Govt announces 20 percent discount on cereals and LPG purchased from Salt Trading Corporation and Food Management and Trading Company.

Rs 31.86 billion for irrigation and river control

The government has allocated Rs. 31.86 billion for irrigation and river control in the coming fiscal year. The government has set a target of providing irrigation facilities to 29,400 additional hectares within the next fiscal year.

Stating that the entire construction work of Sikta Irrigation Project will be completed within two years, the government has allocated Rs 1.56 billion for the coming fiscal year. The Ranijamara Kulariya Irrigation Project is targeted to be constructed within the next three years and Rs 2.6 billion has been allocated for this project in the coming fiscal year.

The government has also announced to launch a weather channel to provide weather related information.

Melamchi Water Project

The government has allocated Rs 3.51 billion for Melamchi Drinking Water Project.


Rs 10 billion allocated for President Education Reform Program.

Govt allocates Rs 8.73 billion for Day Meal Program to benefit 3.5 million students.

Govt announces to launch separate educational television channel.

‘One health worker in each school’ campaign announced.

Rs 6.15 billion allocated for 396 basic hospitals

The government has allocated Rs 6.15 billion for 396 basic hospitals for the expansion of health services in rural areas.

Rs 13 billion allocated for refinancing

The government has allocated Rs 13 billion for refinancing. Finance Minister Poudel said that the necessary budget has been allocated to provide concessional loans at a five percent interest rate to youths for small, domestic, small enterprises and to those returning from foreign employment.

The govt has phased out Poverty Alleviation Fund; more than 32,000 community organizations under the fund will be developed as cooperatives.


A total of Rs 7.98 billion allocated for the Prime Minister Agricultural Modernization Project. Finance Minister Poudel said local units and farmers groups will be encouraged for vegetation in barren lands along the highways. The budget also announced to set up a chemical fertilizer factory within three years. Likewise, the government allocated Rs 12 billion for chemical fertilizer supply The government has earmarked Rs 45.9 billion for agriculture and livestock development.

Allowance for health volunteers increased

Health volunteers will now get Rs 12,000 as transport allowance, Finance Minister announced. Finance Minister Bishnu Poudel has increased the allowance for 55,000 health volunteers to Rs 12,000. Earlier, a volunteer used to get Rs 3,000 as an allowance.

FDI in startups

The government, through the fiscal budget, has announced to allow FDI in startups.

  • Budget announces free SIM card for students over 16 years
  • Ayurvedic hospitals to be established in every province
    Health insurance in all local units. A total of Rs 7.50 billion allocated.
  • Public to get 20,000 liters water free every month: Finance Minister

  • Social security allowance raised by 33 percent.
  • Allowance for senior citizens raised to Rs 4,000 per month. Rs 100 billion allocated for social security allowances.

Senior citizen allowance increased

Govt increases senior citizen allowance to Rs 4,000 per month

Labor, Employment and Social Security sectors

Continuity of the Prime Minister’s Employment Programme. The government has allocated Rs 12 billion for creating additional 200 thousand employment opportunities through this program.

Equalization and conditional grants: Rs 93.82 billion to province and Rs 268 billion to local levels

The government has allocated Rs93.82 billion to the provinces and Rs 268 billion to local levels for equalization and conditional grant for the coming fiscal year.

A total of Rs 57.95 billion has been allocated for equalization grant to the provinces and Rs 94.56 billion for local levels. Likewise, Rs 35.87 billion has been allocated to provinces, and Rs. 173.50 billion to the local level for a conditional grant.

Budget for Covid-19 response:

A total of Rs 37.53 billion budget has been allocated for the Covid-19 response. The government has allocated Rs 26.75 billion for the vaccination campaign.

Minister Poudel announced that Rs 1.30 billion has been allocated for constructing a 300-bed infectious disease hospital in the Capital, and 100-bed hospitals in provinces.  The government also announced to operate an international-standard 1,500-bed hospital at Kirtipur under TUTH in three years.

Unveiling the budget Finance Minister said the government was forced to unveil the budget through ordinance as the Parliament has been dissolved. Finance Minister claimed the government has achieved remarkable success, adding that the government will be focused on the journey of development, prosperity, and social justice.

Priorities of the budget:

  • Increase the number of Covid tests, free vaccines
  • Relief for the sectors affected by the pandemic
  • Ensure employment
  • Food security
  • Rapid industrialization
  • Free vaccination
  • End all kind of discrimination
  • Coordination among all three tiers of government

Brief scenarios of the current fiscal year: 

The budget deficit stands at 2.1 percent, said Minister Poudel.  A growth rate of 4.1 percent is predicted, but Minister Poudel said it is challenging to achieve due to the second wave of Covid-19.  Nepal’s GDP per capita increased to USD 1,191 by 5.8 percent. Inflation stands at 3.1 percent, compared to 6.7 percent in the last fiscal year.