Confidence Cannot Be Budgeted
Nepal’s new budget is fiscally competent in parts, administratively familiar throughout, and politically cautious almost to a fault. It offers subsidised credit, sectoral incentives, startup support, infrastructure commitments and yet another promise of employment generation. On paper, there is little to object to. In practice, there is little that convinces.
The problem is not that the budget lacks ideas. It is that it lacks a compelling economic narrative.
Governments often mistake economic recovery for a matter of liquidity. If businesses can borrow, they assume businesses will invest. If young entrepreneurs can access concessional loans, they assume enterprises will emerge. But capital follows confidence, not the other way around.
Nepal’s economy today is not suffering from a shortage of policy announcements. It is suffering from a shortage of belief.
For households, the question is simple: will incomes rise? For young people, it is whether staying in Nepal makes economic sense. For businesses, the question is even more fundamental: is this a country where long-term investment still feels worthwhile? A budget cannot answer these questions with loan schemes alone.
The private sector is expected to be the engine of employment. Yet, in recent months, some of Nepal’s largest and most recognisable business houses have found themselves under investigation for alleged economic offences. If wrongdoing has occurred, prosecution is not only justified, it is essential. A market economy survives only when the rule of law applies
equally to everyone, regardless of wealth or influence.
But justice and economic continuity should not be viewed as opposing objectives. The government’s challenge extends beyond exposing corruption. It must ensure that the process strengthens the economy rather than paralyses it. When investigations create uncertainty across entire business groups, suppliers hesitate, lenders become cautious, expansion plans are deferred and hiring slows. Thousands of employees - who bear no responsibility for corporate misconduct - can become unintended casualties.
This raises a larger institutional question. Nepal continues to treat economic crimes largely through the lens of conventional criminal law. Perhaps the country now requires a more specialised legal framework for economic offences, one that is uncompromising on fraud, tax evasion, financial misconduct and abuse of public resources, leaving no room for privilege or political negotiation. At the same time, such a framework should protect the continuity of legitimate business operations, safeguard jobs, reassure investors and prevent productive enterprises from collapsing before due process has run its course. Punishing crime should never mean punishing economic activity.
The same principle applies to the budget. Fiscal measures alone cannot restore growth if policy signals create uncertainty elsewhere. Economic confidence is built when governments communicate clearly, enforce laws consistently and demonstrate that growth and accountability can coexist. Nepal does not have to choose between fighting corruption and encouraging investment. A mature economy must do both.
