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Analyze the budget of Nepal

What is the current budget of Nepal? What is the share of health care and education in budget? What is the share of national defense/ military? Analyze the result to take a position and suggest for changes, if any.

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Question asked by heena_malla

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ujjwalpoudel profile image

The concept of budgeting is the process of forecasting or estimating of revenue and expenses of a specific time period (normally of one fiscal year). Guell (2015), in their book Issues in Economics Today, the budget of a country is usually called as national budget where the government outlines the sources of revenue i.e. taxes and fees and allocate or spend the collected revenue on various aspects of the nation such as infrastructure development, national defense, and security, education, healthcare and Medicare.

Current Budget of Nepal 2018/19

Finance Minister Yubaraj Khatiwada has launched the first ever federal budget of Rs 1.315 trillion for the financial year 2018/19. Out of the entire budget, the government proposes to utilize Rs 845.5 billion as recurrent expenditure. Likewise, Rs314.28 billion and Rs155.18 billion have been set aside for capital expenditure and financing provision, respectively.

Moreover, the government has set a revenue collection target of Rs 831 billion. Likewise, the government will seek foreign grants and loans of Rs58 billion and Rs 253billion, respectively. Internal loan amounting Rs172 billion is expected to balance the expenditures and sources of the budget.

The share of health care and education in budget

If we see the budget then almost all the countries give prior to this health and education sector. There is no exception for Nepal. Up from around Rs 32 billion of the previous fiscal, this year Nepali healthcare sector saw an allocation of around Rs 56.41 billion in the new budget for FY 2018-19. The government plans to ensure free basic health services and setting up health centres with at least one doctor across all local governments. For this year, the government also plans for the expansion of the health insurance program across the nation and free essential medicine.

Now lets us uncover the budget for education. Continuing the past trend, the education sector received the highest budgetary allocation in the Federal Budget for FY’19. This is the only sector where government has dedicated 20 percent of nations’ overall budget. The new budget saw the allocation of 10.19 percent (Rs 134.5 billion) of the total budget to the Ministry of Education, Science and Technology, compared to 10.09 percent of the previous fiscal. The government has set the budget in education on envisage of technical school across all local bodies along with goals to attain free and compulsory school education gradually, access to high-speed Internet across every public school and achieve 100 percent literacy in two years.

The share of national defense/ military

Similarly, an environment conducive for development and prosperity would be produced by making people realize the safety and security, maintaining effective peace and surety as well as law and orderliness in the country. The new budget saw the allocation of (Rs 44.93 billion) of the total budget to the Ministry of Education Nepal Army, Nepal Police and Armed Police Force would be made modernized and professional by building capacity, while NA’s program ‘Bunker to barrack’ would be continued (Nepal federal budget 2018-19, n.d.).

To sum up, in comparison to earlier budget the government has highly prioritized their budget on these core sectors of education, health and finally defense. The only thing is that the budget is on draft but there is the question that does it imply to this year. The vision has not limited us on a bound. The successful implication of the budget would definitely result the changes on all three sectors i.e. education, health and defense.


Guell, Robert C. (2015). Issues in Economics Today , 7th edition- 2015 ISBN: 978-0078021817

Nepal federal budget 2018-19. (n.d.) In nepalisansar.com. Retrieved from nepalisansar.com/news/nepal-federa...

sanjaya profile image

Budget is simply a description of a financial plan which estimates the revenue and expenditure for a stated period of time.

On 29th may 2018, the finance minister Yubaraj khatiwada presented Nepal’s first federal budget of Nepalese rupee 1.31 trillion in the joint session of House of representatives and the national assembly for the fiscal year 2018/2019. The government has targeted 29.8% revenue growth and 8 % economic growth for this fiscal year.

The federal budget has allocated NPR 113.43 billion to seven provinces along with NPR 195.05 billion to 753 local bodies as equalization and conditional grants. Under the revenue-sharing scheme, the local bodies and provinces have received NPR 53.82 billion and NPR 60.42 billion respectively from the divisible fund (Government of Nepal, Ministry of Finance, 2018).

The source of budget financing of Nepal will be from the foreign grant, domestic borrowing, foreign borrowing, and revenue. It has allocated 12% of its budget for financial management, 13% for capital and 64% for recurrent.

The source of budget financing of Nepal will be from the foreign grant, domestic borrowing, foreign borrowing, and revenue. It has allocated 12% of its budget for financial management, 13% for capital and 64% for recurrent.

Thirdly, in education, science, and technology sector the government has allocated NRs 134 billion which shares 10.23 % of the total budget. The government announced that it will upgrade the current state of universities and the curriculum of schools will be improved.

In conclusion, it is seen that the government has allocated more budget on education, science and technology sector than national defense and health sector. My suggestion is that the government ought to increase its allocation of the budget on health likewise on the education sector because health is the first priority and go along with education for all people.


(2018). Retrieved from Government of Nepal, Ministry of Finance: mof.gov.np/en/archive-documents/bu...