Finance Minister Dr Swarnim Wagle presented a budget of Rs 2.124 trillion for the fiscal year 2026-27 at a joint session of Parliament on Jestha 15 (May 29).
The nearly two-thirds majority government of the Rastriya Swatantra Party (RSP), which emerged from the election held on March 5, following the political departure triggered by the Gen Z movement of September 8-9, introduced its first budget. But has the budget done justice to the aspirations and spirit of that Gen Z movement?
Economist Dr Minendra Rijal says, “It may not have a major impact this year, but it does indicate what our priorities could be over the next four or five years.”
Does this budget, then, provide relief to the middle class as the government and the finance minister have repeatedly claimed?
“It has at least opened up a debate about whether the budget is intended for the middle class or the lower-income class. The real question is whether the responsibility envisioned by the Constitution is toward the middle class or toward the lower class.”
We asked again: “As many people in the market are currently debating, is this a budget for those who tie cows or for those who tie neckties?”
Dr. Rijal responded bluntly: “RSP itself has clearly stated that it is the party of the well-off. If you look at the profiles of parliamentarians, I hardly see any RSP lawmakers whose backgrounds are substantially different from mine. The only major difference is age. Remove my age from the equation, and you find people who are half my age. Other than that, their profiles are very similar to mine.”
“That is why the Finance Minister needs to be a little more serious, as he is the most experienced person in this government,” he advised.
However, maturity was not particularly evident even in Dr Wagle, who is widely regarded as one of the most seasoned and prominent economists. While we were recording this interview with Dr Rijal on Monday, the Ministry of Finance uploaded a third revised version of the Economic Bill 2083 on its website.
A situation in which a bill already tabled in Parliament has to be repeatedly amended is certainly not something befitting a veteran and reputed finance minister.
The Economic Bill, which was first removed from the ministry’s website, revised, and re-uploaded on Saturday, was again taken down, revised, and re-uploaded twice on Monday.
The repeated revisions to such an important component of the budget appear to stem from revenue pressure. Despite the Finance Minister’s optimistic claims, there is significant pressure on revenue collection. At present, the government does not appear capable of raising around Rs 1.6 trillion in revenue projected in the budget.
Perhaps that is why, after projecting an image of generosity by exempting income up to Rs 1 million from income tax and simultaneously lowering the upper tax threshold – moves that primarily benefit the better-off – the government has had to impose taxes on essential services such as education, healthcare, and electricity. The resulting increase in indirect taxation seems aimed at filling the revenue gap and financing increased government salaries.
We then asked Dr Rijal: “Instead of calling him the Finance Minister, shouldn’t we call him the Revenue Minister? And shouldn’t the Ministry of Finance be renamed the Ministry of Revenue?”
“I often joke that the revenue office should simply be moved under the Prime Minister’s Office,” he replied. “There are two reasons; First, the place where the most manipulation and maneuvering occur is the revenue administration,” Dr Rijal explained. “From customs points onward, look at everything, from VAT to other taxes. That is where the greatest opportunities for manipulation exist. Second, there is the issue of who gets appointed there and who gets placed in those positions.”
What, then, about budget formulation?
“That simply becomes an exercise in justifying revenue figures,” he said. “On the expenditure side, we should take things more seriously by integrating the Ministry of Finance and the National Planning Commission. We do not need so many separate offices dealing with policies and related matters.”
What does he see as the positive aspect of the budget?
“The budget was presented while recalling Subarna Shumsher, and that is positive. I do not say this because he was a leader of the Nepali Congress. Rather, Subarna Shumsher presented the first budget in Nepal in the sense that he established the principle that elected representatives of the people should decide how public money is spent. He clearly defined where authority lies. This was a departure,” Dr Rijal said.
So what kind of departure has this budget made?
Watch the full video conversation with economist Dr Minendra Rijal on Nepal Khabar’s Tatkaalai:
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