Former finance minister urges govt to make budget for upcoming FY results‑driven
KATHMANDU: Former finance minister Rameshore Prasad Khanal has urged the government to present the budget for fiscal year 2026/27 as a transformative, results‑driven document rather than a statement of size and slogans.
Speaking at a policy discussion programme organised by the Society of Economic Journalists‑Nepal (SEJON) in Kathmandu today, Khanal called for a budget that showcases reforms and delivers visible results. He criticised past budgets for focusing on size, distribution and popular announcements and said the upcoming budget must deliver concrete outcomes.
Khanal said the government should set goals only after realistically evaluating its institutional and financial capacity, warning that targets beyond implementation capacity could have negative consequences. He emphasised the need to continue positive reforms and commitments started by previous administrations and welcomed the government’s recent decision to cut services and facilities that were being provided contrary to the law.
“Tightening fiscal discipline has begun to show positive signs,” he said, adding that austerity measures have started and that it is essential to maintain this continuity.
On macroeconomic targets, Khanal said the plan to achieve an average 7% growth over the next five years is ambitious and would require significant investment, effective resource management and policy stability. He also said the target of reaching a per capita income of $3,000 is challenging.
Khanal urged the government to be serious about Nepal’s graduation from Least Developed Country (LDC) status and said hydropower should be the main pillar of economic development. He added that issues such as land compensation, permit processes and administrative complexities must be resolved.
Turning to tax policy, Khanal said instability had weakened private‑sector morale and suggested a clear government commitment to keep tax rates stable for at least the next 10 years. He pointed out that the ratio of tax revenue to Nepal’s gross domestic product is high and said impractical tax structures have produced anomalies in foreign trade. He warned that relying solely on higher tax rates to boost domestic production and control imports could be counterproductive.
On employment, Khanal said the job‑creation target is ambitious and that increasing domestic investment is indispensable to meet it. He urged the government to prioritise work, adopt a results‑oriented approach and further strengthen administrative federalism, and called on the private sector to advance through healthy competition.
He welcomed the government’s move towards implementing recommendations of the High‑Level Economic Reforms Recommendation Commission and said the commitment to put past studies and reform proposals into practice is positive.
SEJON President Bhagawat Bhattarai said the government must be serious about making the forthcoming budget implementable and results‑oriented, and that priority should be given to creating an investment‑friendly environment for the private sector.
(With inputs from RSS)
