KATHMANDU, May 20: Nepal’s private sector has urged the government to introduce a transformational budget for the upcoming fiscal year, calling for structural economic reforms aimed at shifting the country away from its remittance- and import-driven growth model.
Business leaders said the upcoming budget, scheduled to be unveiled on May 29 (Jestha 15), should serve as a turning point for the economy rather than a routine annual financial document.
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), which recently elected a new leadership team, submitted a series of recommendations to Finance Minister Dr. Swarnim Wagle, emphasizing the need for long-term policy stability, investment-friendly reforms, and measures to revive private sector confidence.
FNCCI President Anjan Shrestha said the current economic model is no longer sustainable and stressed the need to shift toward production, exports, and job creation.
“The private sector is ready to fully cooperate with the government in transforming the economy,” Shrestha said, referring to the federation’s recently unveiled “6 Pillars, 60 Initiatives” framework.
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Finance Minister Wagle has also signaled a departure from conventional policymaking, saying the government is adopting a “mission-mode” approach focused on legal reforms, institutional accountability, digital tracking, direct monitoring, and measurable outcomes.
According to the private sector, Nepal’s industrial production capacity has fallen to around 40 percent, while the private sector contribution to gross fixed capital formation has dropped from 28 percent to 16 percent over the past four years.
Business leaders have also expressed concern over annual changes in tax policies, saying such unpredictability has weakened investor confidence. They have called for a unified revenue code and the formation of an autonomous revenue board.
The private sector has warned that Nepal’s heavy dependence on remittances and imports cannot ensure long-term prosperity. Nepal received remittances worth Rs 1.659 trillion during the first nine months of the current fiscal year, much of which was spent on consumption rather than productive investment.
The FNCCI also cautioned that geopolitical tensions in the Middle East could negatively affect Nepal’s foreign employment, remittance inflows, foreign exchange reserves, and the broader economy.
The organization further highlighted concerns over Nepal’s upcoming graduation from Least Developed Country (LDC) status, which may result in the loss of preferential market access and expose domestic industries to greater competitive pressures.
To strengthen the economy, the private sector has proposed long-term integrated policies for export-oriented industries such as garments, carpets, pashmina, felt, and textiles, alongside incentives for agriculture, tourism, information technology, herbs, tea, coffee, startups, and small and medium enterprises.
Industry bodies have also recommended policies to attract private investment in large infrastructure projects, promote public-private partnerships, and provide viability gap funding for sectors such as energy, transmission lines, tunnels, and industrial zones.
The Confederation of Nepalese Industries (CNI) has likewise submitted recommendations covering foreign direct investment, customs reform, financial systems, agriculture, energy, technology, insurance, capital markets, and domestic production.
CNI President Birendra Raj Pandey said the budget should focus on income generation, wealth creation, and employment expansion to support Nepal’s long-term economic growth.
Finance Minister Wagle has repeatedly stated that the government’s priorities are based on five guiding principles: governance dividends, economic restructuring, integrated infrastructure, social investment, and multidimensional international relations.
“We believe these priorities will lay the foundation for economic growth, employment, social justice, productivity, competitiveness, and improved living standards,” Wagle said.
