Kathmandu: The leading three umbrella organizations representing Nepal’s private sector—the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Nepal Chamber of Commerce, and the Confederation of Nepalese Industries (CNI)—have issued a positive preliminary response to the government’s budget for the upcoming fiscal year 2026/27.
Leadership from these organizations described the fiscal plan as both encouraging and balanced, noting that it successfully incorporates a significant number of their long-standing recommendations. They specifically commended the budget’s focus on tax reforms, the prioritization of agriculture and infrastructure, and the formal recognition of the private sector as a primary partner in the nation’s economic journey.
While the business community welcomed the policy directions, they emphasized that the ultimate success of the budget rests entirely on its effective implementation. Drawing from past experiences where ambitious announcements failed to materialize, stakeholders expressed a mix of hope and scrutiny. However, there is a prevailing sense of optimism this year, as the current administration enjoys a clear and strong majority in parliament, which the private sector believes could provide the necessary political stability to translate these fiscal promises into reality.
FNCCI President Anjan Shrestha stated that the budget has provided a much-needed boost to the morale of the business community and holds the potential to revive the nation’s sluggish economy. Speaking to reporters at the Federal Parliament, Shrestha praised the government’s attempt to streamline the tax system through a single-window approach. Although the private sector had lobbied for a personal income tax threshold of 1.2 million rupees, Shrestha characterized the government’s decision to set the ceiling at 1 million rupees as a significant and positive step forward for the middle class.
Shrestha further highlighted several standout provisions, including the 10 percent rebate for digital payments and the innovative modality proposed for agricultural transformation. He noted that the allocation of over 400 billion rupees for infrastructure and road upgrades would catalyze investment. Furthermore, he interpreted the government’s decision to involve the private sector in energy trading, distribution, and the management of major industrial zones like Mayurdhap and Motipur as a clear signal that the state views private enterprise as a vital economic ally.
Looking toward the future, the FNCCI leadership expressed satisfaction with programs aimed at reopening closed industries through public-private partnerships and fostering youth innovation. Shrestha specifically pointed to the generous subsidies for agriculture—such as the 40 percent grant for investments up to 20 million rupees and the 80 percent subsidy on insurance premiums—as game-changing policies. He remarked that while previous coalition governments often struggled with implementation, the current administration’s two-thirds majority should empower it to fulfil its commitments, though the burden of execution remains firmly with the state.
Similarly, the Confederation of Nepalese Industries (CNI) provided a favourable assessment, noting that the fiscal plan addresses critical areas such as tax rate adjustments, legal reforms, and the digitization of services. CNI President Birendra Raj Pandey observed that the inclusion of policies to facilitate the repatriation of foreign currency and incentives for startups is highly encouraging for the investment climate. He argued that these measures establish a solid foundation for attracting both domestic and foreign capital, potentially boosting overall investor confidence across the country.
On the topic of Value Added Tax (VAT), CNI leaders welcomed the government’s commitment to studying the feasibility of a multi-rate system, a move they had previously advocated for. President Pandey emphasized that while the budget’s framework is well-constructed, the government must remain vigilant and show genuine initiative to ensure that these plans do not remain merely on paper. Both the FNCCI and CNI concluded that they are currently conducting a granular analysis of the budget’s fine print and will release their comprehensive formal positions in the coming days.
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