KATHMANDU: The government has presented a budget of Rs 1,964.11 billion for the fiscal year 2025/26, marking an increase of Rs 103 billion from the previous year.
Enhancing infrastructure, promoting clean energy and revitalizing industrial capacity are among the major objectives of the budget that Minister for Finance Bishnu Prasad Paudel unveiled in the joint session of the federal parliament on Thursday.
The government has decided maintain existing tax rates on electric vehicles (EVs) in the coming fiscal year in line with its long-term vision for cleaner mobility. Supporting the EV ecosystem further, the government has said that domestic manufacturers of EV charging machines will enjoy a five-year income tax exemption. Additionally, only 1% import duty will be levied on components used to assemble these machines.
The new budget states that owners of vehicles older than 20 years will now only be liable for outstanding tax dues from the past two years.
As part of its efforts to promote clean and efficient public transport, the government is providing 100 additional electric buses to Sajha Yatayat. This will increase Sajha Yatayat’s fleet of electric buses to 140. The government earlier provided subsidy to Sajha Yatayat to procure 40 such buses.
Likewise, the government is conducting a feasibility study for a podway system connecting Kathmandu and Hetauda. The system will be laid along the right of way of the ropeway line currently not in operation.
The government has also earmarked Rs 4.15 billion to upgrade Tribhuvan International Airport into a boutique airport. It has decided to provide different facilities and concessions to airlines operating flights to international airports in Bhairahawa and Pokhara.
Similarly, the government is introducing differential electricity tariff for households and industries.
To revive domestic manufacturing, the government has said that long-closed Gorakhkali Tire Industry in Gorkha will be revived under a public-private partnership model.
The new budget places strong emphasis on road and tunnel infrastructure. The government has earmarked Rs 2.6 billion to complete the Nagdhunga–Sisnekhola and Siddhababa tunnel projects within the fiscal year. Likewise, another Rs 21.19 billion has been allocated for the expansion of 422 km stretch of the East-West Highway into four lanes. Additionally, the government has set a target to blacktop 850 km of gravel roads in the new fiscal year. It has also allocated Rs 2.56 billion to upgrade the Galchhi–Rasuwagadhi Road—a key trade corridor with China—into a two-lane highway.
The government is also implementing construction on 12 new road tunnels in 2025/26. Of these, seven—Dumkibas–Bardaghat, Khurkot–Chiabari, Babai–Chinchu, Majhimtar–Shaktikhor, Hemja–Nayapul, Kulekhani–Bhimphedi, and Dharan–Leuti—have completed technical studies and are ready for implementation. Feasibility studies for the remaining five—Tokha–Chhahare, Shivpur–Bhaluwang, Ranighat–Bhurigaun, Dolalghat–Charnawati, and Hattisar–Babai—will be conducted within the fiscal year.
The government has said that it would adopt a three-shift working schedule for large-scale projects and introduce legal reforms to support timely completion of mega infrastructure projects.
Meanwhile, the government has allocated Rs 151.74 billion to the Ministry of Physical Infrastructure and Transport—the highest allocation among all ministries—in 2025/26, underscoring its focus on sustainable development and improved connectivity.
