Nepal provincial budget for FY 2021/22

Provincial governments of Nepal
Provincial governments of Nepal

The provincial governments have recently announced their budgets for FY 2021/22 with the combined provincial budget amounting to NPR 261.82 billion. Following is the breakdown of the annual budgets of each of the seven provinces.

Figure 1: Provincial budgets in FY 2020/21 and FY 2021/22
1 2 Bagmati Gandaki Lumbini Karnali Sudurpaschim
Total Budget 32.46 33.79 57.72 30.03 40.95 36.54 30.33
Recurrent 14.16 15.63 26.01 13.64 14.93 11.49 10.66
Capital 15.05 18.05 29.7 16.73 21.17 21.65 17.65

Table 1: Province-wise budget allocation

Figure 2: Province-wise percentage change in budget
(TB, RE and CE stand for Total Budget, Recurrent Expenditure and Capital Expenditure, respectively)

Short overview of provincial budget FY 2021/22

Province 1:

  • NPR 3.25 billion to be allocated for health sector development
  • Allocating NPR 440 million for the prevention, treatment, and handling of COVID-19
  • Expansion of Mechi Hospital (Jhapa) to 200-bed capacity as well as Panchthar and Dhankuta District Hospital to 100-bed capacity each; minimum 50-bed capacity in other district hospitals
  • Physical infrastructure development, education, and agriculture to receive NPR 13.31 billion, NPR 1.19 billion, and NPR 2.90 billion respectively
  • Allocating NPR 234.9 million to the Chief Minister Education Reform program

Province 2:

  • Allocating NPR 200 million for the procurement of oxygen cylinders, COVID-19 testing kits, and other pertinent medical equipment to contain the pandemic
  • Janakpur Provincial Hospital to be allocated NPR 190 million for the purchase of necessary equipment
  • NPR 240 million to be spent on physical infrastructure development and reform of public schools along with setting up exceptional public schools in each district
  • Allocating NPR 150 million to the youth employment program for youths who have lost their jobs due to the pandemic

Bagmati Province:

  • Allocating NPR 2 billion for the free inoculation of the residents
  • Monthly allowance of NPR 3,000 to be issued to children who have lost their parents to COVID-19
  • Bhimphedi-Kulekhani Tunnel Road and Chief Minister Provincial Road Project each allotted NPR 750 million and NPR 3.25 billion respectively
  • Allocation NPR 2 billion for making loans accessible to generate production and employment
  • NPR 2.41 billion allocated to develop physical and health infrastructure

Gandaki Province:

  • NPR 50,000 in relief to be extended to families who have lost their members to COVID-19
  • Monthly allowance of NPR 5000 provided to children who have lost their parents

Lumbini Province:

  • Prioritizing health and agriculture sectors along with the recovery of affected economic sectors
  • Upgrading and designating Lumbini Provincial Hospital as a specialty hospital with the allocated NPR 250 million
  • Allocating NPR 350 million for the Smart Farm Village program that is implemented in all local levels

Karnali Province:

  • Prioritizing reform and expansion of healthcare and infrastructure development
  • NPR 539.3 million to be employed in the handling, testing and treatment of COVID-19
  • Allocating NPR 2.61 billion to bolster health services in the province
  • NPR 7.29 billion for road infrastructure and transport service amelioration
  • The “Pratek Ghar Sorojgar” (Each Household Employed) program to be granted NPR 1 billion for poverty and unemployment alleviation

Sudurpaschim Province:

  • Prioritizing reform and expansion of healthcare services and infrastructure development
  • Administering NPR 2.42 billion to the health sector
  • Allocating NPR 1.17 billion for public school reform together with the development of physical infrastructure in these schools
  • NPR 272.1 million allocated for programs in the likes of watershed expansion and protection, landslide control, riverbank protection, and sustainable development and construction of irrigation canals among others


The total budget increased only for four provinces, out of seven. The contraction of budget for few provinces could be attributed to the decline in revenue collection amid the pandemic. The budget of Province 1 contracted by the highest percentage while the biggest budget expansion was that of Lumbini Province. Despite the budget contraction, all the provinces have set out to bring substantial reform in the health sector and push for infrastructure development – both physical and social. The provincial budgets have displayed a sense of urgency in containing the pandemic with every province allocating a certain sum for the testing, treatment, and prevention of COVID-19. However, for this to bring intended tangible results, the provincial governments have to start with finding ways to strengthen their revenue collection and then work towards effective implementation and monitoring of their respective activities.