Nepal’s Finance Minister Bishnu Poudel is a Red. And as Finance Minister in a coalition led by his Communist Party of Nepal (Unified Marxist-Leninist) he has the unenviable job of saving a country deep in the red.
Despite its impressive name, there is nothing even remotely ‘<a href="https://nepalitimes.com/here-now/forgotten-woman-who-sheltered-communist-activists?%2F">communist</a>’ about his party as Poudel works on the upcoming budget. He has warned repeatedly about a massive revenue shortfall with <a href="https://nepalitimes.com/news/till-debt-do-us-part">Nepal’s expenditure</a> now 25% higher than its income.&nbsp;
The government has already reduced subsidies to local governments due to lack of money, and plans to cut small-scale programs entirely in the budget. But such rollbacks do not even make a dent in reducing the deficit gap.&nbsp;
Revenue has been falling since <a href="https://nepalitimes.com/news/nepal-s-uneven-covid-19-deaths">Covid-19</a>, and never really recovered — even though in 2023/2024 revenue was a record high compared to the previous year. The fiscal year 2022/23 marked the first time in the last five decades that Nepal experienced a negative growth rate in revenue.
This year, collections rose to Rs919 billion by mid-May, a 11.5% increase over the previous year, but with only two months to go before the end of this fiscal year, the government has only collected 65% of the expected revenue.
<div class="embed-block"><iframe title="Nepal’s income-expenditure gap" aria-label="Interactive line chart" id="datawrapper-chart-wFxbc" src="https://datawrapper.dwcdn.net/wFxbc/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
Revenue mainly comes through VAT, customs, excise and income tax. A slowdown in imports and <a href="https://nepalitimes.com/news/poor-cash-rich-nepal?%2F">domestic economic activity </a>has led to a fall in collection. Domestic consumption has slowed as <a href="https://nepalitimes.com/here-now/no-country-for-young-men-c89lgrrl">young Nepalis migrate</a> overseas. There is also concern about<a href="https://nepalitimes.com/news/human-trafficking-patterns-changing-in-south-asia"> smuggling across the border</a>.&nbsp;
“Our revenue is not rising in proportion to<a href="https://nepalitimes.com/from-the-nepali-press/more-than-half-of-nepal-s-electricity-imported-from-india"> our imports</a>,” says Kewal Prasad Bhandari, former Secretary to the Government of Nepal. “This points to significant leakage at border checkpoints.”
Customs evasion has been rising since Covid-19, and non-compliance with custom duty regulations worsened during the 2022 elections. This prompted lawmakers to approve an amendment to Nepal’s Revenue Leakage Act 1995 that proposes the formation of a Central Revenue Leakage Control Committee under the coordination of the Finance Minister.&nbsp;
Read also: <a href="https://nepalitimes.com/banner/now-the-economy-stupid">Now the economy, stupid</a>
“Customs evasion has been out of control since 2022, with people blatantly flouting the laws,” says a former secretary who wished not to be named. “Customs fraud is widespread because there is little political will to hold those who break the law to account because of their political connections.” &nbsp;
The Finance Ministry is currently staffed by officials who have no experience and expertise in the sector. “It used to be called a ‘Super Ministry’ with capable financial administrators, but that is no longer the case,” adds the former secretary.&nbsp;
VAT fraud is also rampant with almost 28% of registered taxpayers failing to file annual turnover details to revenue offices. Another 24% of VAT-registered taxpayers who do file documents show zero VAT on transactions.
<div class="embed-block"><iframe title="Nepal’s National spending (in %)" aria-label="Stacked Columns" id="datawrapper-chart-Qpj3c" src="https://datawrapper.dwcdn.net/Qpj3c/4/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
“We can generate up to Rs2 trillion in revenue if we make active efforts to monitor tax, VAT, and customs fraud,” says Min Bahadur Shrestha, former Vice President of the National Planning Commission.&nbsp;
With the implementation of the federal system, government expenditure has increased exceptionally in the form of grants administered by the central government for provinces and municipalities. Such grants are a significant part of current expenditure, which also includes social security and administrative spending.&nbsp;
Even as the number of <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">development and infrastructure</a> projects goes down, the size of the budget has increased every year, primarily due to the debt burden. Unable to raise enough revenue to cover expenditure, the government has borrowed extensively from within and outside the country, quadrupling its public debt over the last decade.&nbsp;
Nepal has now reached a point where it is borrowing more money to pay back what it has borrowed.
Current expenditure and debt servicing make up much of government spending, leaving little money for essential development. In the previous fiscal year, 67.6% of Nepal’s spending was current expenditure and 18.% on debt servicing, leaving only 13.6% for development projects.&nbsp;
Nepal’s public debt has exceeded Rs2.67 trillion as of mid-April, and forms 46.75 % of its GDP in comparison to 22.3% ten years ago. Officials have attributed Nepal's debt load to post-earthquake reconstruction, a bloated federal machinery, and the pandemic.
Nepal has to either significantly cut spending, or scale up <a href="https://nepalitimes.com/here-now/nepal-s-tax-system-widens-rich-poor-gap">revenue generation</a>. Min Bahadur Shrestha, says reducing expenditure is not the right policy for a country like Nepal, the focus should be on income generation.&nbsp;
<div class="embed-block"><iframe title="LOAN MOUNTAIN (in trillion Rupees)" aria-label="Interactive line chart" id="datawrapper-chart-bnVny" src="https://datawrapper.dwcdn.net/bnVny/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}))}(); </script></div>
Last year’s High-Level Tax Reform Advisory Committee led by former Finance Secretary Bidyadhar Mallik projected a revenue increase of up to Rs300 billion annually through reforms like tax hikes and reducing VAT exemptions.&nbsp;
The Economic Reform Commission under former Finance Secretary Rameshore Khanal this month was recommended new revenue-raising ideas, including a controversial inheritance tax on property and real estate transactions, which it suggested would also discourage people from accumulating large amounts of wealth. Critics say this will discourage saving and disrupt <a href="https://nepalitimes.com/here-now/nepals-only-growth-industry-private-sector-corruption">Nepal’s business environment</a>.&nbsp;
And then there is the <a href="https://nepalitimes.com/editorial/nepal-s-corruption-carousel">corruption</a>. Instead of holding those flouting tax laws to account, politicians pander to lobbyists and special interest groups. Defaulters and tax evaders get away, and cronies are appointed to leadership positions in regulatory bodies whose job it is to monitor tax evasion.&nbsp;
Read also: <a href="https://nepalitimes.com/opinion/higher-corruption-in-high-places">Higher corruption in high places</a>, David Seddon
“The government’s credibility comes into question when it allows itself to be bribed into handing over leadership of regulatory bodies to middlemen,” says &nbsp;Shrestha. “A lot of money goes not towards our national coffers, but to line the pockets of a select few individuals.
Various committees have recommended economic austerity in order to minimise wasteful spending, including banning unnecessary travel, cutting down on the purchase of vehicles, furniture, and IT infrastructure, as well as closing and downsizing offices. None of this has been followed through.
Says former secretary Kewal Prasad Bhandari: “There is no other country in the world with such large-scale waste of government resources like ours, that is why we need stronger policies that make appropriate use of taxpayer money. Otherwise we will just go deeper into the red.”

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

thumbnail

viewImage

Nepal in the red

Who is accountable for teacher-student relationships?

Of the nearly 19 million eligible voters in next week’s election in Nepal, an estimated 5 million are abroad and cannot cast their ballots. Many others within Nepal must travel to their home districts, and might decide not to because of the cost.
Flights into Kathmandu these days are full of global Nepalis returning just to vote, but almost as many are leaving for overseas jobs. Most of those coming or going are in the 20-40 age group, and a majority want Nepal to see a change in leadership.
Bangladesh held an election this month in which citizens overseas could vote by mail.&nbsp;
“Bangladesh made maximum use of technology not just for campaigning but also for polling itself. We could have also managed this, so people within Nepal did not have to travel to their home districts to vote,” says Mohna Ansari, former head of Nepal’s National Human Rights Commission who was an election observer in Bangladesh.
A 3-day holiday has been declared so people can travel to their home constituencies to cast ballots. Even if there was not enough time to manage ballots for overseas Nepalis, it could have been done for Nepalis within Nepal.
Former Chief Election Commissioner Bhojraj Pokharel reckons that physical voting in countries with a large Nepali diaspora would have been a logistical nightmare, but in the PR system, using electronic voting machines or paper ballot could have been piloted in some places. It is not possible to manage the entire voting process until we introduce the internet voting system.
“First of all, there needs to be political will to bring the policy and be ready to undertake that level of investment and it is not a one-time cost,” Pokharel says. “A government formed by the GenZ could have atr least issed an ordinance ensuring this right, piloted out-of-country voting where possible, which could have built pressure for the future Parliament and the government. It would have given people hope. It is a lost opportunity.”
All major political parties called for voting rights for global Nepalis in their manifestos, but these very leaders blocked legislation allowing it despite a 2017 Supreme Court ruling out of fear that it would be anti-incumbent.&nbsp;
<h2>Why so late?</h2>
Bangladesh delivered election results in just one day, but the final results of Nepal's last local polls in 2022 including that of Kathmandu constituencies took nearly a month.
Acting Chief Election Commissioner Ram Prasad Bhandari said this week that the results of the First-Past-The-Post (FPTP) ballot counting would “likely” be published within 24 hours of the poll closing at 5PM on 5 March. But many are skeptical.
“I wonder if we lack the capacity or know-how to announce results as quickly as possible,” says Mohna Ansari.
Former Chief Election Commissioner Pokharel says manual ballot paper counting in Nepal is inherently slow because of the large numner of political parties and/or candidates on the ballot, the counting mechanism, the political behaviour of the candidates/parties and some managerial issues during counting.
“Our present policy is to count all the ballot papers at the returning officers' officies, located at the district headquarters. It requires collecting ballot boxes safetly first. This takes time, and there have been cases of ballot boxes being damaged or stolen during transport. In a few highly difficult, geographically remote polling centres, we use a helicopter or transport. But sometimes, accommodating the party and candidates' representatives remains challenging,” explains Pokharel. A solution could be counting ballots at the very booths where they are cast.
Another reason for the delay is simply the number of political parties, and the need for each ballot paper to be examined by booth representatives for consensus. In close races, the smallest difference can lead to tense situations, further delaying results, even though counting centres are protected by metal fencing so there is no disruption.
After this, then it is the turn of Proportional Representation (PR) ballots to be counted. Weeks pass by the time the results of candidates and parties are tallied and verified. But the most common delay is because election officers think ballot counting is a nine-to-five job.&nbsp;
“The efficiency of poll station officers is most important, and they are incentivised for this,” says Ansari, adding that counting can even start within an hour after voting closes.
In remote areas, local resources could be mobilised to make counting quicker, but there is a crisis of trust, adds Ansari.&nbsp;
That could be easily solved with electronic voting which the EC implemented in the 2008 polls but discontinued because political parties felt the machines could be hacked or manipulated.

Nepalis Select Who To Elect

On Saturday, Iran retaliated with missile strikes on Abu Dhabi, Dubai, Bahrain and Qatar, a region where there are an estimated 2 million Nepalis working to send money home. In addition, thousands of Nepalis were preparing to board flights to Kathmandu from West Asian cities this weekend to vote in the 5 March election. Many are said to be stranded at various aviation hubs. A Qatar Airways flight from Doha took off just before the air space was closed, while Air Arabia and Kuwait Airways have diverted or cancelled flights. Nepalis in the West Asian region said things were relatively calm where they were, although some heard loud explosions at about noon local time. In Dubai, some thought they were Ramadan fireworks.&nbsp; In Kuwait, nearly 2,000 Nepalis working in the US military base as security guards and cleaners were evacuated before the strikes. In Bahrain where the US Fifth Fleet naval base is located and which was hit by two Iranian missiles, workers contacted by Nepali Times said the situation was under control and the authorities had told everyone to stay indoors and not use highways. The conflict also coincided with the beginning of Nepal’s trekking and mountaineering season, and tourists were either on their way or planning to leave European and North American cities for Himalayan hikes. Most of them transit through Doha, Dubai or Kuwait and all three airports are closed. Turkish Airlines flights via Istanbul are still operating.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260228130212_ab5e132d56da1df6a3fb1b6919648f845a168ad2c51d79f7587fb85a6e913b97.png" data-media-id="editor_0" data-image-id="20260228130212_ab5e132d56da1df6a3fb1b6919648f845a168ad2c51d79f7587fb85a6e913b97" data-rendition-name="original" width="1864" height="826" loading="lazy" alt="Qatar and UAE airspace closed"> <figcaption>Qatar and UAE airspace closed. Credit: Flightradar24</figcaption> </figure>  However, the main impact for the world could be a spike in the price of petroleum products if the strategic Strait of Hormuz is blocked. China relies on Iranian oil for their refineries, and Nepal could be affected indirectly if the economies of its neighbours are hit. Nepal imports all its diesel, petrol, LPG and aviation fuel from India which sources it mainly from the Gulf, and until recently from Russia. Petroleum makes up 25% of the value of all imports, and that is more than Nepal earns from all its exports. Saudi Arabia this year overtook the UAE as the main destination for Nepali workers, with the number now totalling 400,000. There are said to be as many in the UAE, and another 350,000 in Qatar. There are another 100,000 mostly women in Kuwait, and 50,000 each in Oman and Bahrain.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260228130220_d24ae633ff84f283835434becdb2f1351f84c415ce87ca34378bd4e2669661b3.jpg" data-media-id="editor_1" data-image-id="20260228130220_d24ae633ff84f283835434becdb2f1351f84c415ce87ca34378bd4e2669661b3" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="West Asia Iran conflict"> <figcaption>Iran retaliated with missile strikes on Abu Dhabi, Dubai, Bahrain and Qatar on Saturday.</figcaption> </figure>  Nepal receives nearly $11 billion a year in remittances from overseas Nepalis (not counting India) through official channels, although the total is said to be much more. &nbsp;This makes up more than a quarter of Nepal’s GDP equivalent — one of the highest proportions in the world. More than half of the overseas remittances to Nepal comes from its workers in the Gulf, and it is the mainstay of the country’s economy. Nepalis in Saudi Arabia, Qatar and the UAE alone send home more than $3 billion a year, much of that helping support their families back home. An average Nepali worker in the Gulf sends home nearly $2,500 a year, and this is spent mainly for household supplies, children’s education and healthcare. There are also an estimated 7,000 Nepali caregivers and healthcare workers in Israel, and most of them are women. The Nepal Embassy has asked Nepalis in Israel to take caution and move to bomb shelters.

West Asia war and Nepalis

If you did not watch the understated movie उनको स्विटर / (The Woolen Sweater) after it was released in May last year, you missed a major turning point in Nepali cinema. Much-hyped films fall short of expectations, but here is an exquisitely acted and directed production with a strong underlying message of tolerance. What a contrast from formulaic melodramatic Kollywood fare — a love story so simple, cinematography so subtle in capturing the beauty of the monsoon on mountain pastures, and a background folk song accompaniment that evokes the flavour and tenor of multi-ethnic eastern Nepal. Since its release, Unko Sweater received praise in Nepal, but it was in multiplexes across Nepaliphone India where the movie became a rage. Positive reviews spread by word of mouth on social media, where the script, performance and camera work were praised for reflecting a genuine and unsullied rural Nepal. The movie is a layered portrayal of caste, ethnicity, gender and culture with the tender romance between the shy Dharanidhar Kafle (Bipin Karki) and Phool Gurung (Miruna Magar) in which the two, despite being soulmates, have to deal with societal norms and gossip. They do this without rebelling, in their own quiet way. In the first scene in a crowded jeep, people are seen discussing an election. An elderly greying Kafle is headed home, and the rest of the movie has back and forth flashbacks revealing the story of his unspoken affection for Phool. But there is an undercurrent of ethnic rigidity. When Kafle’s brother Dambar elopes with Iksha Limbu, the repercussions are borne by both families. Then Kafle’s uncle is banished for being an outcast.&nbsp; Miruna Magar as Phool, as an ebullient woman, is in contrast to the introverted Kafle, who does not say much but has a melodious singing voice. As the plot thickens, Kafle is shown to be bound by circumstances that pose obstacles to his love for Phool. The storyline delicately shows how life and situations constantly force people to shift direction. Despite underlying differences, the various castes and ethnicities in this fictitious village near the Sikkim border get along because they have to. There is an interdependence between highland farmers and other ethnicities living down the valley that is at the heart of Nepal’s ethnic harmony. Despite taboos about interethnic and intercaste relationships, people still have trust and faith amongst each other. There is no time reference to the story, but it does speak of a nostalgic era decades ago when rural Nepal was not yet connected by roads and phones, when people had no choice but to get along. Things have changed now with outmigration, and education has blurred ethnic lines. A QUIET LOVE Director Nabin Chauhan is not in your face with his message, giving viewers a hint of deep rooted traditional values that still govern society. Each character adds to the storyline, validating the way they behave, pushing the plot forward.&nbsp; There are many emotions that are intricately woven into the plot, and the most prominent, of course, is love. Not the showy, lustful way it is shown in flamboyant formula films, but a quiet bond that does not need words, a silence, a glance and a gesture conveying the universe of love. When Phool asks Kafle what he will do if they cannot be together, he says he will build her a house with a beautiful garden of flowers in the meadows where he herds livestock. He builds it awaiting her return, while Phool knits him a sweater, the symbol of their interwoven love. In screenings of the film in Nepal and India, there has not been a dry eye in the audience. The background score and music by Kobid Bazra and the powerful rendition by Jhuma Limbu of the ‘Kafle’ strike a strong chord. The cinematography by Chintan Rajbhandari does not glamourise Nepal’s rural landscape, it is shown in its raw misty beauty as a constant backdrop. The viewer is uplifted by the notion that love transcends social restrictions and orthodoxies.&nbsp; The ending is left deliberately unfinished, possibly to make way for a sequel which we can only hope will be as compelling as उनको स्विटर. &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260301060348_42480e8b6934c9a5c518c44c2970748b341bbbf290c2b303b6aa6359d883567b.jpg" data-media-id="editor_0" data-image-id="20260301060348_42480e8b6934c9a5c518c44c2970748b341bbbf290c2b303b6aa6359d883567b" data-rendition-name="original" width="1280" height="560" loading="lazy" alt="Unko Sweater"> </figure>  उनको स्विटर / (The Woolen Sweater) Artmandu Nepal, 2025 Directed by Nabin Chauhan 145 minutes Available now on YouTube <div class="embed-block"><iframe width="560" height="315" src="https://www.youtube.com/embed/lCgtmgiII7M?si=MirwKOwKmxE3jLS6" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>

income-and-expenditure

Nepal in the red

Who is accountable for teacher-student relationships?

Nepalis Select Who To Elect

West Asia war and Nepalis

Now for something completely different