KATHMANDU, May 230: The government has unveiled a Rs 2.124 trillion budget for Fiscal Year (FY) 2026/27, with a strong emphasis on broad-based and popular relief measures aimed at salaried workers and middle-income households, even as it continues to exceed the fiscal ceiling set by the National Planning Commission (NPC).
Presenting the annual budget in a joint session of the federal parliament on Friday, Finance Minister Dr Swarnim Wagle announced allocations across recurrent, capital and financial management headings that collectively push total spending above the NPC-recommended ceiling of Rs 1.89 trillion.
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The total expenditure has been set at Rs 2.124 trillion, marking an 8.14 percent increase compared to the current fiscal year’s revised estimate of Rs 1.964 trillion. Of this, Rs 1.271 trillion has been allocated for recurrent expenditure, while Rs 422 billion has been set aside for financial management, including debt servicing.
Capital expenditure has been fixed at Rs 431 billion, accounting for 20.29 percent of total spending. While absorption of capital funds has remained a longstanding challenge, the allocation is higher by Rs 23.11 billion compared to the current fiscal year’s Rs 407.89 billion.
To finance the budget, the government aims to mobilise Rs 1.404 trillion in revenue, along with Rs 61.74 billion in foreign grants and Rs 247.28 billion in foreign loans. The remaining financing gap will be met through Rs 410 billion in domestic borrowing.
The budget package is expected to provide relief to salaried employees through an increased income tax exemption threshold, revised salary scales for government staff, and the removal of excise duty on several goods, measures likely to ease the tax burden on middle-income groups.
However, repayment obligations on domestic borrowing, including principal and interest, are projected at Rs 245.89 billion, leaving net domestic borrowing mobilisation at Rs 164.11 billion.
