29/05/2026
1. Total Budget Size
The total budget is Rs. 2,124 arba 34 crore - a 25.2% increase over the revised estimates of the current year. Current expenditure accounts for 59.8%, capital expenditure 20.3%, and financial provision 19.9%.
2. Major Tax Reforms
The income tax exemption limit is doubled to Rs. 10 lakh for individuals, and the maximum personal income tax rate is reduced by 10 percentage points. Customs duty on 273 types of industrial raw materials is reduced, and existing 11 customs duty tiers are consolidated into 7.
3. AI & Technology Push
Nepal's first Sovereign AI Computing Center is to be established in Syuchatar, Kathmandu. The government plans to purchase thousands of AI processing units and convert clean hydropower into high-value AI computing services, positioning Nepal as a regional tech hub.
4. Energy Sector
Total installed capacity is projected to reach 5,535 MW with 1,040 MW to be added in the coming year (670 MW hydro + 370 MW solar). Rs. 85 arba 54 crore is allocated for energy production, transmission, and distribution. Nepal Electricity Authority is to be restructured into three separate companies for generation, transmission, and distribution.
5. Education Allocation
Rs. 218 arba 30 crore is allocated for education - the largest sectoral allocation. This includes Rs. 8 arba 60 crore for scholarships and plans to systematically restructure the entire educational ecosystem including school mapping, teacher capacity testing, and AI integration.
6. Health Sector
Rs. 101 arba 95 crore is allocated for health, including Rs. 15 arba for health insurance. The goal is to bring 90% of Nepalis under health insurance within three years, reducing out-of-pocket medical expenses significantly.
7. Roads & Infrastructure
Rs. 286 arba 48 crore is allocated for roads and urban infrastructure. Plans include blacktopping approximately 1,000 km of roads, constructing 275 road bridges, upgrading the East-West Highway to four lanes within five years, and launching the Nagdhunga tunnel by next Shrawan.
8. Civil Service Pay Hike
A 10% salary increase on the base scale for civil servants, along with a new 10% monthly performance incentive allowance, is announced. Effective from Shrawan 1, 2083, the minimum salary will be approximately Rs. 40,000 and the maximum around Rs. 1 lakh - a net increase of about 21%.