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Dr. Swarnim Wagle, the finance minister, came before the Federal Parliament of Nepal on May 29, 2026 (15th of Jestha 2083) and presented Nepal's largest national budget to date.
With a total outlay of Rs 2.124 trillion, the Nepal Budget 2083/84 falls at a politically charged time, as it is the first full budget of the government led by Balendra Shah after the RSP won close to two-thirds of the seats in the March 2026 elections.
This would be enough to make Nepal Budget 2083/84 worth studying: the scale. However, the material renders it a must-read for every citizen of Nepal who earns, saves, invests, pays tax, and runs a business in Nepal.
The following piece breaks down everything you need to know.
The Numbers First: How Big Is Nepal Budget 2083/84?
The government has announced the total budget of Rs 2.124 trillion for the fiscal year 2083/84, according to Himalayan Times.
This is an increase of 25.2 percent from the revised estimates of the current financial year (2082/83) and is said to be the largest budget in Nepal's history.
The results of that breakdown provide insight into what the government's priorities really are:
Of the total allocation, Rs 1.27 trillion (59.8 percent) is allocated for the government to spend as recurrent expenditure for operating the government.
Capital expenditure for development and infrastructure amounts to Rs 431.1 billion, or 20.3 percent.
The remaining Rs 422.6 billion, or 19.9 percent, covers financial management, including debt servicing.
The revenue side will see the government raising Rs 1.405 trillion in tax and non-tax revenue and Rs 61.7 billion in foreign grants.
Rs 247.28 billion from foreign loans and Rs 410 billion raised internally will cover the Rs 657.29 billion deficit.
The 25 percent increase in total expenditure over the revised total estimate for the previous year is noteworthy.
It shows the new government's intent and the magnitude of the institutional and infrastructure deficits Nepal has accumulated over the past decade of political turmoil.
The Tax Reforms: What Changes for Nepali Individuals and Businesses
This is where the Nepal Budget 2083/84 has a direct impact on the largest number of people. This budget contains some of the most important tax changes in recent history.
1) Income tax exemption doubled
Under the new tax system, the tax exemption limit for individuals' income has been increased to Rs 1,000,000, up from Rs 500,000 earlier.
Now, in reality, anyone who earns under Rs 10 lakh a year, as salary, doesn't pay any income tax.
This is immediate and significant relief for the middle class in Kathmandu, Pokhara, and other urban areas.
2) Top income tax rate reduced
The highest income tax rate has been lowered from 39 to 29 percent for top income, a 10 percentage point drop.
This puts Nepal's highest personal tax rate closer to its neighbors and directly impacts higher-income earners, professionals, and business owners.
3) Customs duty simplified
The existing 11-tier customs duty system has been simplified to 7 tiers, and customs duty has been cut on 273 categories of industrial raw materials.
This reduces manufacturing costs and, over time, should also lower the cost of locally made products.
4) Digital payment incentive
A 10 percent rebate on value-added tax will be provided for purchases made through digital payments.
A move that simultaneously pushes digital adoption and creates a tangible financial benefit for consumers who transact electronically.
5) Excise duty abolished on 360 goods
This removes a cost layer on a broad range of products, though the specific list of affected goods will be detailed in the Finance Bill.
6) Green Tax introduced
The infrastructure development tax and road maintenance and improvement fee have been merged into a single Green Tax at the customs stage, simplifying the levy structure while maintaining environmental signaling.
The most significant change for any person planning their financial year will be the doubling of the income tax exemption threshold.
Combined with the Rs 40,000 deduction available for life insurance premium payments under Nepal's Income Tax Act, a salaried Nepali can now structure their finances to reduce their tax burden through these new legitimate deductions significantly.
Ministry-Wise Allocation: Where the Money Goes?
The Ministry of Infrastructure Development has the largest allocation of Rs 302.83 billion, based on the ministry-wise allocation.
The Ministry of Education and Sports has been allocated Rs 218.30 billion.
The Ministry of Women, Children and Social Welfare has Rs 122.61 billion.
The Ministry of Energy, Water Resources and Irrigation has Rs 114.02 billion, and the Ministry of Home Affairs has Rs 108.32 billion.
The Ministry of Health and Population will receive Rs 96.43 billion, and the Ministry of Agriculture, Forestry and Environment will be allocated Rs 73.12 billion.
Infrastructure's position at the top of ministry-wise allocation reflects where Nepal has the most visible and most urgent backlog: roads, bridges, tunnels, and urban connectivity projects that have been planned for years but funded inconsistently.
Infrastructure: The Backbone of Nepal Budget 2083/84
Nepal Budget 2083/84 is most ambitious in the area of infrastructure investment. Specific allocations were made for several flagship projects.
The Kathmandu-Tarai/Madhesh Fast Track is allotted Rs 17.64 billion, and a total of 40 bridges and 5.4 km of tunnel will be constructed in one fiscal year.
Pushpalal Mid Hill Highway is to be completed within three years.
In Kathmandu, electric public transportation buses, charging stations, smart bus parks, and underground utility ducts will be planned as part of the urban mobility push.
Rs 28.52 billion has been allotted for a road maintenance campaign across the country.
An empowered authority model will be adopted to construct the Budhigandaki Hydropower Project, a 1,200 MW storage project.
The airports in Pokhara, Bhairahawa, and Gautam Buddha International Airport are all to be built through a Public-Private Partnership.
This level of infrastructure allocation is significant in Nepal Budget 2083/84 not only for its magnitude but also for the level of detail on specific projects, as past budgets have provided general allocations without accountability or timelines.
Energy: Adding 1,040 Megawatts and Restructuring the NEA
The budget targets adding 1,040 megawatts of new electricity generation capacity, 670 MW from hydropower and 370 MW from solar, bringing Nepal's total installed capacity to 5,535 MW.
The Upper Arun (1,061 MW), Uttarganga (828 MW), Chainpur Seti (210 MW), and Tamakoshi-5 (99 MW) projects will be expedited.
But the restructuring of the energy sector is also of major importance.
Nepal Electricity Authority (NEA) will be divided into three companies that will generate, transmit, and distribute electricity.
Previous governments have deferred this long-debated reform and, if implemented, would fundamentally change how Nepal's power sector is governed and financed.
The new framework will also enable private sector companies to trade electricity internationally.
Rs 70 billion is budgeted for new electricity transmission lines.
Historically, only a fraction of Nepal's hydropower potential has reached consumers because of a lack of such facilities.
Health: Rs 101.95 Billion and 90% Coverage in Three Years
The health sector allocation in Nepal Budget 2083/84 signals a genuine shift in ambition.
Rs 101.95 billion has been allocated for the health sector. Of this, Rs 15 billion has been set aside for the health insurance program, with a target of bringing 90 percent of all Nepalis under health insurance coverage within the next three years.
Rs 13.15 billion has been allocated for programs including treatment for poor citizens, safe motherhood, and free medicines.
In the next three years, 336 basic health facilities will be constructed or improved. Government Hospitals will offer free treatment to children who have cancer.
The budget demonstrates a clear shift toward health system strengthening rather than isolated service expansion.
Investments in hospitals, digital health infrastructure, insurance reform, telemedicine, pharmaceutical production, specialist services, and healthcare quality assurance suggest an effort to build more integrated and resilient institutions.
For ordinary Nepali families, the target of 90 percent health insurance coverage is the headline.
Currently, more than 50 percent of total health spending in Nepal is paid out of pocket, and the burden falls heaviest on households with no financial buffers. That all changes in the next three years if the health insurance goal in the budget is realized.
Despite the growth of public health care insurance, life insurance is still a totally separate financial security mechanism.
What happens to a Nepali family when the breadwinner cannot earn due to a critical illness or death is a financial question that health insurance does not answer.
Income replacement, loan repayment, and continuity of children's education are areas where life insurance fills the gap that public health schemes cannot.
Education: Rs 218.30 Billion and Structural Reform
Rs 8.6 billion has been allocated in the budget for student scholarships, from school to higher education.
Plans to invite international university campuses to Nepal and an Open University to serve Nepali students living abroad are announced.
For communities where it is still lagging, Residential Schools will be implemented.
There will be a systemic restructuring of the educational ecosystem, using national school mapping, infrastructure audits, teacher competency tests, and AI and ed-tech readiness assessments.
School Management Committees will serve as the primary vehicle for quality assurance at the school level.
Medical education expansion is also included, with MBBS and other programs to be offered from FY 2083/84 at the Shahid Dasharath Chand University of Health Sciences in Geta, Sudurpaschim Province.
Agriculture: Rs 46.92 billion and Up to 80% Insurance Subsidy
Rs 46.92 billion has been budgeted for agriculture and livestock development.
Rs 32.46 billion has been allocated to buy chemical fertilizers.
A pilot project will see commercial farmers paid up to 40 percent capital incentive grants for investments of at least Rs 20 million.
Agriculture and livestock insurance, with up to an 80 percent subsidy, will be provided, with Rs 2.19 billion earmarked for the agricultural insurance premium subsidy.
Among the more operational aspects of Nepal Budget 2083/84, agricultural insurance subsidy has a more direct impact on rural households.
An 80 percent premium subsidy effectively removes the cost barrier for farmers who have historically viewed insurance as unaffordable.
For a sector where weather, landslides, and crop failure regularly push households into debt, this change has real financial consequences.
Technology and Governance: The Sovereign AI Centre and Leaner Government
Sovereign AI Compute Center will be set up in an area of Syuchatar in Kathmandu.
Thousands of chips will be acquired to enable AI entrepreneurs and startups to access concessional computing power.
A fintech marketplace will be set up under the supervision of Nepal Rastra Bank. The Nagarik App will have dozens of government services.
On the governance front, 31 government bodies will be dissolved, and 6 others will be merged to streamline governance and eliminate waste.
Civil servant salaries have been increased by 21 percent, combining a 10 percent base increase with a 10 percent monthly performance incentive, effective from mid-July 2026.
A Governance Innovation Challenge Fund will award provincial and local governments for innovative and efficient service provision.
Social Security: Rs 120 billion and What It Means
Rs 120 billion has been allocated for social security. The child nutrition allowance for Dalit children has been increased from Rs 500 to Rs 1,000 per month.
A total of Rs 61.5 billion will go to the provinces and Rs 90.2 billion to the local levels, preventing the aspirations of the Nepal Budget 2083/84 from being entirely centered in Kathmandu.
A Look at the Impact of the Nepal Budget 2083/84 On Personal Financial Planning
For most Nepalis, the most immediately relevant change is the doubling of the income tax threshold to Rs 10 lakh.
Those in the lower tax brackets and earning less than the exemption limit will see their income increase after Shrawan 2083 (mid-July 2026).
If your income still exceeds the exemption level, then it's a good idea to take advantage of allowable deductions.
Life insurance premiums of up to Rs 40,000 per year can be deducted from taxable income, a provision in Nepal’s Income Tax Act that has existed for years but has been underused.
With an increased tax exemption limit coupled with the policy-linked tax deduction, it is a great time to review insurance and financial planning this year, as more people are now aware of their tax status.
If you still do not have a policy, the SuryaJyoti website's Premium Calculator shows exactly the cost of a plan based on your income and age.
The eKarja loan facility remains available to access liquidity against your policy if budget changes require short-term adjustments to your financial plan.
A Realistic Assessment: Ambition vs Execution
The budget reform signals are said to be the most serious since Nepal's economic liberalization in 1991.
But Nepal also has a long tradition of successful budgets that are not implemented – capital expenditure is consistently done at a sub-optimal level, and the end of the year is reserved for bad spending.
The budget targets 7 percent economic growth for FY 2083/84. The Central Bureau of Statistics said economic growth for the current fiscal year, 2082/83, came in at 3.85 percent, significantly below the previous year's 7 percent target.
Ambition and delivery have been Nepal's most ongoing challenge with budgets.
The gap between ambition and delivery is Nepal's most persistent budget challenge. These include the income tax reforms, the NEA restructuring, the 90 percent health insurance coverage target, and the Sovereign AI Center.
All of these are credible goals with real institutional and implementation prerequisites.
Whether the new government's parliamentary majority translates into the execution capacity to follow through is the question that the next twelve months will answer.
For detailed sector-by-sector legal and tax analysis of the Nepal Budget 2083/84, the ICAN budget highlights document published by the Institute of Chartered Accountants of Nepal is the most authoritative reference.
And Attorney Nepal's comprehensive breakdown provides useful contextual analysis.
Nepal Budget for 2083/84
The Nepal Budget 2083/84 is not just a plan of expenditure for the coming year.
It signals what the new government believes needs to change and how urgently.
The income tax exemption is the most direct gift for the ordinary worker, and it has been doubled.
The health insurance expansion is the most ambitious social commitment.
The AI Center and the digital economy incentives are most future-oriented.
The key to whether the Nepal Budget 2083/84 meets its targets will be execution, and this is a story to be seen from Shrawan 2083 to Ashadh 2084.
With higher income thresholds, expanded deductions, and greater access to long-term savings products, the picture of managing personal finances in this new fiscal framework appears more favorable than in most recent years for Nepal.
Visiting the SuryaJyoti services portal to explore how a life insurance policy fits into your financial plan this fiscal year is one of the more concrete personal finance decisions that Nepal Budget 2083/84 makes easier to justify.
Frequently Asked Questions
1) What is the total size of Nepal’s Budget 2083/84?
The total budget of Rs 2.124 trillion is the highest in Nepal's history, representing a 25.2 percent growth compared to the revised estimates of last year's budget.
2) What is the new income tax exemption limit in the Nepal Budget 2083/84?
The exemption limit for individual income tax is now Rs 1,000,000 (Rs 10 lakh), double the previous amount.
3) How much has the maximum income tax rate been reduced?
Under the Nepal Budget 2083/84, the top personal income tax rate (PIT) has been reduced from 39 percent to 29 percent.
4) Which ministry received the highest budget allocation in the Nepal Budget 2083/84?
The Ministry of Infrastructure Development was allocated the highest of Rs 302.83 billion, followed by the Ministry of Education and Sports at Rs 218.30 billion.
5) What is the health sector allocation in Nepal’s Budget 2083/84?
Rs 101.95 billion has been allocated to the health sector, including Rs 15 billion for the health insurance program, to cover 90 percent of Nepalis under health insurance within three years.
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