Budget Contradicts the Spirit of Federalism in an Undeclared Manner – Leader Shrestha (video include)
Kathmandu, 31 May 2026 – Former minister and leader of the Nepali Communist Party Rajendra Prasad Shrestha, has expressed his views on the recently presented budget of the Government of Nepal.
Leader Shrestha stated that the budget goes against the spirit of federalism in an undeclared manner. He argued that while the government has prepared an even larger budget this year, it has reduced the amount allocated to local and provincial governments, which is contrary to the principles of federalism.
He also criticized the government’s decision to further increase both foreign and domestic borrowing, he said that instead of introducing a budget aimed at reducing debt and limiting new borrowing, the government is taking foreign loans at an even faster pace than during the administration of Prime Minister K P Oli, raising concerns that this may be contrary to sound economic principles.
Shrestha, however, welcomed the budget allocations and policies related to science, innovation, and investment in the IT sector. He expressed the view that if funds raised through borrowing are invested in productive sectors such as high-tech cities, startup promotion, smart manufacturing, entrepreneurial smart villages, infrastructure development, and agricultural modernization, they could make a positive long-term contribution to the economy.
He further warned that if the practice of expanding the budget through borrowing continues without investing in productive sectors, Nepal could become increasingly dependent on debt, creating a future risk of rising obligations for both principal and interest repayments.
Speaking in a video interview with NepaliSamachar.com, Shrestha noted that the Government of Nepal presented a budget of NPR 2.1 trillion (21 kharba rupees) on 28 May 2026, and stated that Nepal’s total domestic and external debt has now increased to approximately NPR 2.975 trillion (29 kharba 75 arba rupees).
