Provincial Budgets Reveal Ambitious Goals Alongside Emerging Weaknesses

Summary: All seven provincial governments have announced their budgets for the fiscal year 2083/84. Bagmati Province has proposed the largest budget at NPR 6.693 billion, including a feasibility study for introducing metro rail services in Kathmandu. Madhesh Province, however, has reduced its budget allocation to NPR 4.113 billion. Kathmandu, 1 Asar – On Monday, all provincial governments unveiled their budgets for the upcoming fiscal year 2083/84. Data from budget implementation and revised estimates indicate that most provinces are unlikely to spend more than 70% of their current fiscal year’s budget. Nevertheless, provincial governments have presented larger budgets for the next year compared to the ongoing one. Despite competitive posturing in terms of budget size, provinces have not outlined concrete plans for improving public expenditure. Similar to the federal government, employee service and benefit enhancement continue to receive high priority in provincial budgets. This year’s budget statements also show a concerted effort to enhance presentation and appeal.

Koshi Province is currently implementing a budget of NPR 3.588 billion but has announced a budget of NPR 4.044 billion for the upcoming year. Karnali plans to spend NPR 3.299 billion this year and has proposed NPR 3.539 billion for the next year. Bagmati has proposed a slightly smaller budget of NPR 6.693 billion compared to the current NPR 6.746 billion. Lumbini has reduced its budget from NPR 3.891 billion to NPR 3.738 billion. Madhesh is implementing an NPR 4.698 billion budget this year but has planned a cutback to NPR 4.113 billion next year.

While provinces have announced ambitious infrastructure projects, implementing these plans remains challenging. Bagmati, for example, intends to conduct a feasibility study for metro rail operations in the Kathmandu Valley. Karnali has included a pod vehicle operation plan in its budget. Although several provinces have mentioned spending cut plans, concrete details are lacking. Cash grant programs, however, remain adequately funded.

Koshi’s Ambitious Budget with Salary Increments for Staff
Koshi Province has once again proposed an ambitious budget. With current expenditures at NPR 3.588 billion, the province is projecting a 12.74% increase, submitting a budget of NPR 4.044 billion for the upcoming fiscal year. By mid-April alone, only 36.29% of the current budget had been spent, yet a significantly larger budget is being presented. Provincial Finance Minister Bidur Kumar Linthep has announced plans to install smart CCTV surveillance systems and GPS devices on public transport. The budget also includes provisions to reestablish a COVID-19 holding center, establish an IT park in Dhankuta, and provide training for 5,000 youth. Koshi has allocated NPR 1.238 billion for road infrastructure and urban development. A rooftop solar program for community schools has been funded with NPR 20 million. The province has declared ‘Koshi Tourism Year’ from Shrawan 2083 to Asadh 2085. Projects with assured funding will be prioritized, and capital expenditure will be planned through annual proposals. There is also mention of revisiting public spending standards. Salary increases and allowances for staff have been included as well.

Total Budget: NPR 4.044 billion
Recurrent: NPR 1.397 billion
Capital: NPR 2.075 billion

(Detailed information on other provinces’ budgets and plans is available in the original report but could not be fully included here.)