Govt to Axe 1,300 Projects to Free Rs 110 Billion for Reconstruction, Polls

The government has announced plans to mobilize more than Rs 110 billion from the current fiscal budget by cutting down on small and fragmented projects outside the Infrastructure Bank.

Finance Minister Rameshore Khanal, speaking at a meeting with the new executive committee of the Society of Economic Journalists of Nepal (SEJON) on Thursday, said the decision aims to raise resources for rebuilding government structures damaged during the September 8 and 9 protests and to prepare for the national elections scheduled for March 5. A three-member task force, led by Joint Secretaries Suman Dahal, Dhaniram Sharma, and Uttar Khatri, along with Finance Secretary Ghanshyam Upadhyay, has already begun work on the restructuring.

According to Minister Khanal, cutting 1,300 scattered projects will free up Rs 110 billion, while an additional Rs 120 billion will be saved by freezing recurrent expenses. He emphasized that suspending projects worth less than Rs 30 million will not cause significant loss to the state.

Although the Appropriation Act requires only Infrastructure Bank–approved projects to be included in the budget, several small-scale projects—some worth less than Rs 1 million—were allocated funds. The government now plans to suspend such projects, redirecting the money toward more urgent priorities.

“By cutting the budgets of 1,300 projects, it seems we can generate Rs 110 billion, which will provide some relief,” Khanal said. He added that fragmented projects outside the Project Bank will be among the first to go.

The Ministry of Finance echoed the minister’s view, noting that discontinuing these projects will not have long-term implications and that the resources will instead be used to reconstruct government infrastructure affected by the recent Gen Z protests.