The National Planning Commission has concluded that the budget ceiling for the upcoming fiscal year should be around Rs1.9 trillion. With the recommendation, the Ministry of Finance has started work on the new budget—for the fiscal year 2025-26.

Based on the NPC limits, a team of senior finance ministry officials has started drafting a new fiscal plan, said Shyam Prasad Bhandari, the finance ministry spokesperson.

Head of the budget division at the Ministry of Finance, Sri Krishna Nepal leads the budget drafting committee whose members are Dhaniram Sharma (chief of the international cooperation division), Uttar Kumar Khatri (chief of the revenue division), Than Prasad Pangeni (chief of the administrative division), Tirtha Chiluwal (deputy director at the Inland Revenue Department) and Sushila Aryal (joint auditor general), according to a statement by the ministry.

“The decision was taken on Thursday. We’ll convey it to all the ministries,” Bhandari said.

The Pushpa Kamal Dahal-led government last year unveiled the Rs1.86 trillion budget for the current fiscal year, ending mid-July 2025.

But the incumbent government, led by KP Sharma Oli, last month trimmed the budget by 9 percent, acknowledging its inability to fully use the allocated funds. Finance Minister Bishnu Prasad Paudel announced a mid-term review in Parliament last month, saying that the revised estimate is now Rs1.69 trillion, or 90.99 percent of the original allocation.

Nepal, who heads the budget drafting committee, said the panel is tasked with drafting the fiscal estimates as per the budget’s principles, determining the priorities, streamlining ministry-wise programmes and projects, preparing the budget speech, and providing suggestions for the government’s policies and programmes.

The NPC has also set limits for expenditures under various titles including current, capital and administrative spending; fiscal management and intrer-governmental fiscal transfer among the ministries, said the finance ministry.

The Economic Working Procedure and Accountability Act makes it mandatory to communicate the guidelines for budget formulation and ceilings to all ministries.

After the United States of America recently enforced huge budget cuts through the USAID and the Millennium Challenge Corporation-Nepal, the government is under pressure to secure fiscal resources.

“Yes, there are challenges,” said spokesperson Bhandari. “But both these projects are under review for 90 days. We’ll have to wait.”

Officials hope for the resumption of the MCC project and some USAID assistance that is aligned with the Trump administration’s new policies.

The finance ministry said that it has provided a list of grants to the National Natural Resources and Fiscal Commission and other headings to the NPC and relevant ministries.

The finance ministry also earmarked budgets for national pride projects and other major projects.

The NPC has asked the finance ministry to come up with quality projects and programmes and propose new ones whose financing modality is ready.

All the ministries are asked to provide policies, programmes and expected outcomes of the budget between March 15 and April 5 to the planning commission and the finance ministry.

As per the schedule, a public notice will be issued in order to seek suggestions from the general public from March 29 to April 22. In between, the NPC will hold a week-long interaction on the policies and programmes that guide the national budget.

Several rounds of discussions and consultations will be organised at the ministries, local and provincial levels and various committees and mechanisms formed to advise on the budget.