All seven provinces of Nepal have unveiled their budgets for the upcoming Fiscal Year (FY 2025/26), with a clear emphasis on capital expenditure and a continued reliance on fiscal transfers from the federal government.

With Karnali Province tabling its budget late Sunday night, the budget announcements of provincial governments have concluded. Despite resource constraints and limited internal revenue generation, provinces have prioritized infrastructure and development spending, drawing heavily on federal grants and unspent funds from the current fiscal year to finance their plans.

Karnali Province

Karnali Province presented a budget of Rs 32.99 billion for FY 2025/26, an increase of nearly five percent compared to the current fiscal year. The presentation was delayed due to obstruction by opposition parties, and the budget was eventually tabled late Sunday night by Minister for Economic Affairs and Planning Rajiv Bikram Shah. Of the total allocation, Rs 7.79 billion (23.64 percent) is for recurrent expenditure, Rs 19.98 billion (60.55 percent) for capital expenditure, and Rs 615 million (1.66 percent) for financial management. Additionally, Rs 4.59 billion (13.95 percent) has been allocated for fiscal transfers to local governments.

The budget’s sources include Rs 967 million in internal revenue, Rs 5.69 billion in savings from the current fiscal year, and Rs 10.27 billion from federal revenue sharing. Fiscal equalization grants of Rs 10.56 billion, conditional grants of Rs 4.44 billion, supplementary grants of Rs 539.7 million, and special grants of Rs 494.6 million round up the funding.

Sudurpaschim Province

Sudurpaschim Province has announced a budget of Rs 33.47 billion for FY 2025/26, up from Rs 31.62 billion earmarked for the current FY. Minister for Economic Affairs Bahadur Singh Thapa presented the budget in the Provincial Assembly on Sunday. The allocation includes Rs 10.21 billion (30.49 percent) for recurrent expenses, Rs 19.83 billion (59.25 percent) for capital expenditure, and Rs 3.42 billion (10.24 percent) for intergovernmental fiscal transfers. The provincial government has set aside Rs 10 million for financial management.

The province estimates to collect Rs 1.65 billion in internal revenue, Rs 9.87 billion in federal revenue sharing, and Rs 80 million in federal royalties. Federal fiscal equalization grants will contribute Rs 8.92 billion, while conditional grants of Rs 4.16 billion, supplementary grants of Rs 602.6 million, and special grants of Rs 516 million will contribute to the budget. Additionally, the province expects to mobilize Rs 7.66 billion in savings from the current fiscal year.

Lumbini Province

Lumbini Province tabled a budget of Rs 38.91 billion for the next fiscal year, slightly lower than Rs 38.97 billion set for the current fiscal year. Of the allocated budget for the next fiscal year, Rs 12.01 billion (30.88 percent) is allocated for recurrent expenditure, Rs 23.47 billion (60.32 percent) for capital spending, and Rs 3.42 billion (8.80 percent) for fiscal transfers. Minister for Economic Affairs and Planning Dhanendra Karki presented the budget on Sunday.

The province expects to raise Rs 7.78 billion in internal revenue, Rs 11.86 billion in federal revenue sharing, Rs 415 million from royalties, and Rs 2.82 billion from revenue shared by local levels. Additional funding includes Rs 8.44 billion in equalization grants, Rs 4.66 billion in conditional grants, Rs 514 million in supplementary grants, and Rs 400 million in special grants. Lumbini Province also plans to use Rs 2 billion from its cash reserve.

Gandaki Province

Gandaki Province has unveiled a budget of Rs 31.98 billion for FY 2025/26 which is less than Rs 32.97 billion allocated for the current fiscal year. Minister for Economic Affairs Dr Takraj Gurung presented the budget, which allocates Rs 12.63 billion (39.5 percent) for recurrent expenses, Rs 19.09 billion (59.7 percent) for capital expenditure, and Rs 250 million (0.8 percent) for financial management.

The province anticipates to collect Rs 5.45 billion in internal revenue, Rs 9.79 billion in federal revenue sharing, Rs 773.9 million in equalization grants, and Rs 498.9 million in royalties. Conditional, supplementary, and special grants will contribute Rs 3.35 billion, Rs 639.7 million, and Rs 498.6 million respectively. An additional Rs 2.24 billion in savings from the current year and Rs 1.75 billion in internal borrowing will also support the budget.

Bagamati Province

Bagamati Province has presented the largest provincial budget of Rs 67.47 billion. Minister for Economic Affairs and Planning Kundan Raj Kafle submitted the budget to the Provincial Assembly, allocating Rs 26.04 billion (38.6 percent) for recurrent expenditure and Rs 41.43 billion (61.4 percent) for capital spending.

The budget is expected to be funded through Rs 28.87 billion in tax revenue, Rs 6.79 billion in other revenues, Rs 14.81 billion in federal transfers, and Rs 16.98 billion from savings and miscellaneous sources.

Bagamati Province had allocated a budget of Rs 64.54 billion for the current fiscal year.

Madhesh Province

Madhesh Province has brought a budget of Rs 46.58 billion for the next fiscal year, up from Rs 43.89 billion allocated for the current fiscal year. Minister for Economic Affairs Sunil Kumar Yadav presented the budget, which allocates Rs 16.72 billion (35.89 percent) for recurrent expenses and Rs 30.26 billion (64.11 percent) for capital expenditure—a 6.13 percent increase over the current fiscal year.

The province projects to raise Rs 9.50 billion in internal revenue. It expects to receive Rs 12.73 billion through federal fiscal transfers, including Rs 7.72 billion in fiscal equalization grants, Rs 4.26 billion in conditional grants, Rs 394.5 million in special grants, and Rs 358.2 million in supplementary grants. An additional Rs 12.35 billion is anticipated from federal revenue sharing, while Rs 10.38 billion will come from cash reserves. The remaining Rs 2 billion will be raised through internal borrowing.

Koshi Province

Koshi Province has tabled a budget of Rs 35.87 billion—1.7 percent more than the current fiscal year’s budget of Rs 35.27 billion. Minister for Economic Affairs Ram Bahadur Magar presented the budget, which allocates Rs 18.67 billion (52 percent) for recurrent expenditure, Rs 17.10 billion (47.7 percent) for capital, and Rs 100 million (0.3 percent) for financial management. A total of Rs 4.70 billion is earmarked for transfers to local governments.

The province expects to collect Rs 5.50 billion in internal revenue and Rs 12.39 billion in federal revenue sharing. Fiscal equalization grants will contribute Rs 4.98 billion, while conditional grants of Rs 4.57 billion, supplementary grants of Rs 391.7 million, and special grants of Rs 557.2 million will also be mobilized. Royalties will bring in Rs 359.9 million, and Rs 3.13 billion will come from unspent allocations from the current fiscal year. The budget also targets an economic growth rate of 5.3 percent.