Provincial Budgets of Nepal: A Directory of All Seven Provinces' Annual Budgets

The 2015 Constitution of Nepal established a three-tier federal system: a federal (central) government, seven provincial governments, and 753 local governments. Each of the seven provinces — Koshi, Madhesh, Bagmati, Gandaki, Lumbini, Karnali and Sudurpaschim — has its own elected provincial assembly, a council of ministers, and the authority to raise revenue and pass its own annual budget. Provinces were created by the federal restructuring under the new constitution and their provincial assemblies began functioning after the 2017 elections.

Unlike the single federal budget that dominates national headlines, a province budget is a distinct fiscal document tabled in the provincial assembly by the provincial Minister for Economic Affairs and Planning (or finance minister). It sets out the province's planned spending, revenue estimates and development priorities for the coming fiscal year, which in Nepal runs from mid-July to mid-July (Shrawan to Asar in the Bikram Sambat calendar). Because each province has its own geography, economy and population, the seven budgets vary widely in size, sectoral emphasis and how much they rely on Kathmandu.

A directory of provincial budgets therefore needs two layers: a hub that lists all seven provinces side by side for a given fiscal year, and a detail page for each province per year that breaks down its size, recurrent-versus-capital split, top sectors, growth target, and the mix of own-source revenue and federal grants that finances it.

Nepal's fiscal calendar staggers budget presentation across the three tiers of government so that each tier knows its expected transfers before it finalises its own plan. The federal budget is presented to the federal parliament on Jestha 15 (around May 29). Provincial governments are then required to present their budgets to their respective provincial assemblies on Asar 1 (around June 15), and local governments present on Asar 10 (around June 24).

These deadlines flow from the Constitution and from the Intergovernmental Fiscal Arrangement Act, 2074 (2017). The constitutional provisions on estimates of revenues and expenditure underpin the requirement, while the Act sets the detailed procedure. Because all seven provinces table their budgets on the same day, Asar 1 is a recurring, high-interest national event — comparable to the federal budget day — that province-by-province coverage captures but federal-only budget pages miss entirely.

The timeline begins well before Asar 1. Under the inter-governmental arrangement, provinces and local levels submit revenue and expenditure projections to the federal Ministry of Finance by the end of Poush (mid-January). After consultation with the National Planning Commission, the federal finance ministry provides provinces with estimated fiscal-equalisation grant ceilings by the end of Falgun (mid-March), giving each province a known transfer envelope to build its budget around.

Every province budget is funded by a combination of own-source (internal) revenue, federal revenue-sharing, federal grants, carried-over unspent balances, and limited borrowing. Schedule 6 of the Constitution and the Intergovernmental Fiscal Arrangement Act define the taxes and fees a province may levy on its own, such as agriculture income tax, house and land registration fees, vehicle tax, entertainment tax and certain service charges. In practice, own-source revenue covers only a modest share of most provinces' spending.

The federal government shares pooled revenues — notably value-added tax (VAT) and customs/excise duties — with provinces and local governments, and provides four types of grants defined in the Act: fiscal equalisation grants (to reduce disparities in capacity and need), conditional grants (tied to specific federal programmes), complementary (matching) grants for projects, and special grants. The volume of these transfers is set on the recommendation of the National Natural Resources and Fiscal Commission (NNRFC), a constitutional body created to determine fiscal transfers and revenue-sharing formulas objectively rather than politically.

The result is heavy dependence on the centre. Across the provinces, a large portion of each budget comes from federal transfers, and reporting on recent budgets has noted that resource-poor Karnali is around half-dependent on federal grants, while only the larger-economy provinces such as Bagmati and Madhesh have kept federal-grant dependence comparatively lower. This dependence — and the recurring problem of large unspent balances carried forward each year — is the central theme in analysis of provincial fiscal performance.

The single most-watched figure in any province budget is the recurrent-versus-capital split. Recurrent spending covers salaries, administration and operating costs; capital spending builds roads, hospitals, schools, irrigation and energy infrastructure. A notable feature of provincial budgets — in contrast to the federal budget, where recurrent spending dominates — is that capital expenditure usually makes up the larger share, often around 55 to 65 percent of the total.

For fiscal year 2083/84 (2026/27), all seven provinces tabled budgets on Asar 1 (June 15, 2026). Bagmati Province, home to Kathmandu, brought the largest budget at about Rs 66.93 billion. The other six ranged from roughly Rs 32.99 billion to Rs 41.14 billion: Madhesh at about Rs 41.14 billion, Koshi at about Rs 40.44 billion, Sudurpaschim at about Rs 37.70 billion, Lumbini at about Rs 37.38 billion, Karnali at about Rs 35.40 billion, and Gandaki the smallest at about Rs 32.99 billion. Koshi posted the highest year-on-year growth at about 12.74 percent.

The capital tilt is visible across the board: Bagmati allocated roughly 65.7 percent to capital and 34.3 percent to recurrent; Madhesh about 64.4 percent capital and 35.6 percent recurrent (Rs 26.47 billion capital versus Rs 14.66 billion recurrent); Gandaki about 60.7 percent to capital (around Rs 20 billion); Lumbini around 60.8 percent capital (Rs 22.71 billion capital, Rs 11.11 billion recurrent); and Karnali about 58.3 percent capital (Rs 20.74 billion) against 24.3 percent recurrent. These published splits are exactly the kind of comparable, year-on-year data a per-province budget directory tabulates.

Beyond the headline numbers, each province's budget signals its development priorities through top-sector allocations. In recent budgets, Bagmati emphasised health (with a multi-billion-rupee health allocation), housing and digital governance; Gandaki concentrated on physical infrastructure and energy and water; Lumbini prioritised health and hospital construction alongside technical education; Karnali stressed strategic roads, suspension bridges, health and education; Madhesh focused on agriculture, employment and entrepreneurship; and Sudurpaschim funded road improvements, hospital upgrades and tourism. All seven provinces have also increasingly built in forest, environment, watershed and climate-adaptation programmes.

Tracking budgets across fiscal years reveals the trends a directory makes legible. In FY 2082/83, the seven provincial budgets summed to roughly Rs 287 billion, with Bagmati again largest (about Rs 67.47 billion) and Gandaki smallest (about Rs 31.57 billion); the combined total for FY 2081/82 was reported at more than Rs 278 billion. Year-on-year, some provinces grow their budgets while others contract — for example, Madhesh's FY 2083/84 budget was reported as roughly 13 percent smaller than the previous year, reflecting tighter resource estimates.

Comparing revenue composition across provinces is equally revealing. For FY 2083/84, Madhesh planned to finance its budget with about Rs 11.22 billion in internal revenue and miscellaneous receipts, Rs 12.83 billion from federal revenue-sharing, and Rs 9.49 billion in federal grants, alongside a carried-forward balance and limited internal borrowing. Karnali, by contrast, projected only about Rs 850 million in internal revenue against more than Rs 10 billion each from revenue-sharing and equalisation grants — a stark illustration of how unevenly own-source revenue capacity is distributed across Nepal's provinces.

Federal-budget coverage dominates Nepal's fiscal commentary, leaving provincial budgets comparatively under-documented even though they are tabled on a fixed, predictable day and shape services that citizens use directly — provincial roads, hospitals, schools and grants to local governments. A structured directory addresses this gap by giving each province a stable URL per fiscal year, so readers can compare sizes, splits, growth targets and grant dependence at a glance and trace each province's trajectory over time.

Such a directory should draw its figures from primary sources — each province's budget speech delivered by its Minister for Economic Affairs and Planning — and corroborate them against the NNRFC's transfer recommendations and reputable budget roundups. Because budget amounts, splits and revenue mixes are durable, published facts for a given fiscal year (rather than daily-changing prices), they remain accurate and useful long after Asar 1 passes, making the directory a lasting reference rather than a one-day news item.