KATHMANDU, March 17: The National Planning Commission (NPC) has lowered the budget ceilings for most government ministries and reduced the overall expenditure cap for the fiscal year 2026/27, citing the need for financial discipline and alignment with national plans.
According to the NPC, the Ministry of Finance (MoF) is an exception, receiving an increased budget ceiling of Rs 53.51 billion for the upcoming fiscal year, up from Rs 38.99 billion in the current year. A source at the MoF attributed the rise to expenditures linked to projects under the Millennium Challenge Corporation (MCC), including around Rs 10 billion planned for MCA-Nepal initiatives.
Local units and provinces get budget ceilings
The NPC has set a total federal budget ceiling of Rs 1.89 trillion for the next fiscal year. The National Resource Estimates Committee (NREC) under the NPC reduced the ceiling by Rs 76 billion compared to the current fiscal year’s budget, aiming to ensure consistency between the annual budget and the periodic plan while supporting economic stability and growth.
Among other ministries, the Ministry of Physical Infrastructure and Transportation saw a significant cut, with its ceiling reduced to Rs 123 billion from Rs 151 billion—a drop of Rs 28 billion. However, the Kathmandu-Tarai Fast Track Project, a national pride project managed by the Nepali Army, received an increased allocation of Rs 31 billion, up from Rs 24.49 billion this year.
The NPC has proposed to slash the budget of the Ministry of Industry, Commerce and Supply by around Rs 630 million. The ministry has got the limit of Rs 8.31 billion, down from Rs 8.94 billion.
Likewise, the budget ceiling for the Ministry of Communication and Information Technology has been reduced to Rs 6.99 billion from Rs 7.71 billion. The budget limit for the Ministry of Water Supply has been reduced by Rs 720 million to Rs 20 billion. The Ministry of Labor, Employment and Social Security has a fairly similar limit of Rs 1.60 billion.
Under current regulations, the NREC is required to set the budget ceiling for the upcoming fiscal year by mid-February. While the government is expected to adhere to this cap, it has historically approved expenditures exceeding the limit, breaching its own fiscal rule.
