KATHMANDU, March 11: The House of Representatives election has temporarily boosted economic activity. The election has provided some relief to the economy, which had been affected after attacks on private businesses and vandalism of public property during the Gen Z movement. During the parliamentary election held on March 5, the government and candidates spent billions of rupees.
Economic activities increased as a large amount of money flowed into the market—from mobilizing government employees and security agencies to candidates’ campaign spending. According to National Planning Commission (NPC) Vice-Chair Dr Prakash Kumar Shrestha, the election has increased cash circulation in the market.
“Elections increase imports and spending, which has a positive impact on the economy,” Shrestha said. “However, such effects are not long-term.” He added that the private sector also appears somewhat encouraged by the expectation that a stable government will be formed after the election. The government had approved Rs 19.11 billion to conduct the election.
Of this amount, Rs 10.39 billion was allocated to the Ministry of Home Affairs, Rs 6.73 billion to the Election Commission (EC), and Rs 1.99 billion to the Ministry of Defence. This amount has already been spent. Although the Election Commission set a spending ceiling for candidates, in practice many candidates spent much more.
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Political parties and independent candidates contesting across 165 constituencies spent millions of rupees during their campaigns. The commission had fixed the spending limit between Rs 2.7 million and Rs 3.3 million per candidate. However, it is estimated that candidates from major parties spent between Rs 10 million and Rs 40–50 million.
During major events like elections, a large flow of money into the market increases short-term economic activity. When the government provides allowances, salaries and other benefits to civil servants, security personnel and temporary police deployed for election duties, they spend on daily necessities, transportation, accommodation and other services. This increases demand in local markets.
Similarly, expenses related to mobilizing party workers, organizing rallies and meetings, and conducting door-to-door campaigns increase business for hotels and restaurants, the food sector, vehicle rentals and fuel consumption.
Printing banners, posters, leaflets and pamphlets during campaigns also benefits printing presses as well as paper and design-related businesses. Increased use of vehicles during campaigns boosts income for the transportation sector. Programs organized in various districts also raise demand for hotel and accommodation services.
At the local level, feasts and gatherings organized during campaign events have increased business for farmers and food traders. Such spending increases cash circulation in the market and temporarily boosts economic activity in the trade, service and production sectors. However, these effects are generally short-term, and long-term economic improvement requires increased production and investment.
Printing presses were particularly busy during the campaign due to demand for banners, posters and pamphlets, increasing income for businesses related to paper, ink and design. Hotels and restaurants also saw more customers as candidates and party workers used them for meetings, training sessions and strategy discussions.
Motorcycles and cars were widely used during the campaign, increasing spending in the fuel and transport rental sectors. Political parties mobilized thousands of workers for door-to-door campaigns, rallies and public gatherings. In some places, communal meals were arranged during election events, which increased demand for food products at the local level.
According to NPC Vice-Chair Shrestha, around Rs 32 billion flowed into the market through the banking system during the election period. In addition, a large amount of money is estimated to have entered the market through informal channels.
Although the government did not allocate a separate budget for the election in the current fiscal year, it managed the expenses by cutting budgets from various development projects. The Ministry of Finance had reportedly frozen projects worth around Rs 120 billion to arrange the required funds.
In the 2079 parliamentary and provincial elections, about Rs 18 billion had been allocated, of which around Rs 16 billion was spent. The actual expenditure for this year’s election will be made public by the EC and security agencies after the vote counting is completed.
