KATHMANDU, March 10: The House of Representatives (HoR) election has temporarily energized Nepal’s economy, injecting cash into markets after a period of slowdown caused by attacks on the private sector and vandalism during the Gen Z movement.
Held on March 5, the election saw the government and candidates spend billions of rupees, giving a short-term boost to economic activity.
The mobilization of government employees, security personnel, and candidates’ campaigns pumped money into the market. National Planning Commission Vice-Chair Dr. Prakash Kumar Shrestha said, “Elections have a positive impact on the economy by increasing imports and spending, but such effects are not long-term.” He added that the private sector is also encouraged by expectations of a stable government post-election.
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The government had approved Rs 19.11 billion for the election, of which Rs 10.39 billion went to the Ministry of Home Affairs (MoHA), Rs 6.73 billion to the Election Commission (EC), and Rs 1.99 billion to the Ministry of Defence. While the EC set a spending limit for candidates, in practice, major-party candidates reportedly spent Rs 10–50 million each, far exceeding the limit of Rs 2.7–3.3 million.
Election-related spending directly stimulates local economies. Allowances and salaries for temporary staff and security personnel increase demand for consumer goods, transportation, accommodation, and other services.
Campaign expenses—including gatherings, door-to-door activities, and large rallies—boost businesses in hospitality, food, transport, and fuel. Printing banners, posters, leaflets, and pamphlets also generates income for printing presses, paper suppliers, and design businesses.
Local gatherings and feasts during campaign activities benefit farmers and food traders. Similarly, vehicle rentals and fuel sales rise due to the extensive use of cars and motorcycles for campaigning. According to Dr. Shrestha, about Rs 32 billion circulated through the banking system during the election period, with additional cash likely circulating informally.
Although the government had not allocated a separate budget for this fiscal year’s election, expenses were managed by diverting funds from development projects, including halting projects worth around Rs 120 billion.
For comparison, the HoR and provincial assembly elections in 2022 had an allocated budget of Rs 18 billion, of which Rs 16 billion was spent. The EC and security agencies will disclose the actual expenditure for this year after vote counting concludes.
While these election-related activities temporarily boost economic activity, sustainable long-term growth requires increased production and investment.
