The Ministry of Physical Infrastructure and Transport has received the highest—Rs3.02 trillion—for the upcoming fiscal year, figuring 14.25 percent of the total budget.

Of the total, Rs2.86 trillion has been allocated for roads and urban infrastructure development, while Rs371.7 billion has been allocated for water supply and sanitation.

The ministry, formed after a merger of the Urban Development Ministry and Physical Infrastructure and Transport Ministry, has given special priority to national pride and strategically important projects.

However, the budget for the Kathmandu–Tarai Madhesh Fast Track, one of the most closely watched national pride projects, has been reduced. Only Rs 17.64 billion has been allocated for its construction phase, compared to Rs24.49 billion in the current fiscal year.

Finance Minister Swarnim Wagle said that procurement reforms, flexibility in fund transfers, alternative financing mechanisms, and ensuring project stability will help complete projects on time and within budget under a “mission mode” approach.

He also said a “sunset law” related to development projects will be presented in Parliament within the current fiscal year. He added that the government will address difficulties faced by contractors due to rising prices of fuel, bitumen, and other construction materials caused by the ongoing conflict in West Asia.

Development projects have been largely stalled due to the conflict in West Asia, with roads prepared for blacktopping left incomplete. The Nepal Construction Entrepreneurs Federation has said work has halted due to the government’s failure to adjust prices.

Nicholas Pandey, president of the federation, said the budget appears to prioritise completion of old projects. “The key issue we have been raising—price adjustment—has been addressed in this budget,” he said, adding that full implementation is necessary.

The budget prioritises ongoing national pride projects. Using the Sunkoshi Marin Diversion, which will irrigate 122,000 hectares, the government aims to complete the remaining sections of the Postal Highway and East–West Highway to develop a Mid-Madhesh quadrangle for agriculture and industry.

Similarly, the Pushpalal (Mid-Hill) Highway, Karnali Highway, Bheri Corridor, and the route from Rara to Jumla up to Phoksundo will form the “Karnali quadrangle,” promoting medicinal herbs, hydropower, tourism, and mining activities.

The government aims to blacktop around 1,000 km of roads and construct 275 bridges in the coming fiscal year. Former Secretary Keshav Kumar Sharma said the target is achievable, noting that over 1,000 km of road blacktopping had been achieved previously and up to 212 bridges had been constructed in earlier years.

The budget also includes plans to transform the Siddhartha Highway into an international-standard route and develop the Kali Gandaki civilisation region into a “Gandaki quadrangle” focused on pilgrimage and sustainable enterprise.

Triyuga Dham, Devghat, Rurukshetra (Ridi), Kagbeni, Muktinath, and Damodar Kund will be developed as part of the “Shaligram Path”. A “Nirvana Path” based on Lumbini-Muktinath cultural and religious tourism will promote meditation, yoga, Buddhist-Vedic philosophy, and Himalayan cultural experiences from Manang, Mustang, and Myagdi.

The government also plans to connect the Mid-Hill Highway with northern trade and tourism points such as Olangchung Gola, Kimathanka, Tatopani, Rasuwagadhi, Korala, and Hilsa.

Within five years, 24-hour clean drinking water will be ensured through a smart distribution system. Within three years, 65 percent of citizens, and within five years, all citizens will have access to safe drinking water.

A modern “Blue Bus” service equipped with CCTV will be introduced to ensure safe mobility for women.

Rs1.83 billion has been allocated for land development and infrastructure in 12 identified towns along the Mid-Hill Highway to build identity-based cities. The number of smart cities has increased to 54.

Former Urban Development Minister Sita Gurung said the budget is insufficient to build cities, noting that Rs2.8 billion has been allocated just for filling potholes nationwide. “Can such a budget fill potholes across the country’s roads?” she asked, adding that the Blue Bus system should be implemented nationwide.