KATHMANDU: On May 2, 2025, President Ramchandra Paudel presented the Government of Nepal’s policy and program for the fiscal year 2025/26 during a joint session of the Federal Parliament. Framed around the minimum common agenda of the ruling coalition, the document outlines Nepal’s vision for good governance, economic transformation, and social justice. The policy reaffirms the state’s commitment to the federal democratic republican system and expresses a firm resolve to resist regressive forces. With ten major focus areas and a commitment to rationalizing development priorities, the document serves as a roadmap for the upcoming budget and legislative efforts. Here is an explainer covering main details of the policy and program.

What is Nepal’s Policy and Program for FY 2025/26?

Nepal’s Policy and Program for Fiscal Year 2025/26, presented by President Ramchandra Paudel on May 2, 2025, outlines the government’s strategic vision and priorities for the upcoming fiscal year. As mandated by Article 95 of the Constitution, this document serves as the federal government’s formal plan and precedes the annual national budget. The policy was drafted by the Council of Ministers led by Prime Minister KP Sharma Oli and was endorsed by the Cabinet ahead of its presentation. It includes legislative commitments, development targets, and institutional reforms.

The 2025/26 policy emphasizes political stability, economic recovery, social inclusion, and good governance. It focuses on completing ongoing infrastructure projects, restructuring redundant public bodies, and increasing capital expenditure efficiency. The government has pledged to mobilize internal and external resources efficiently and to restructure public investment based on priority and feasibility. All projects announced in previous years are to be categorized based on their implementability within the term of the current Parliament.

The policy also highlights federal implementation bottlenecks and includes plans to amend existing laws to make service delivery more effective. It provides a blueprint for ministries to align their annual programs and budgetary allocations and sets the foundation for the upcoming Appropriation Bill and annual budget.

Who presents the policy and program in Parliament, and under what constitutional provision?

In Nepal, the government’s annual policy and program is formally presented by the President during a joint session of the Federal Parliament, comprising the House of Representatives and the National Assembly. This is in accordance with Article 95 of the Constitution of Nepal (2015), which states that the President shall, on the recommendation of the Council of Ministers, present the government’s annual policy and program to the Federal Parliament.

For the fiscal year 2082/83 B.S. (2025/26 A.D.), President Ramchandra Paudel presented the policy and program on May 2, 2025, during a joint session held at the Parliament building in New Baneshwor. The address was delivered after Prime Minister KP Sharma Oli submitted the document to the President. The event included ceremonial proceedings such as a guard of honor for the President, reflecting the constitutional and symbolic significance of the occasion.

High-level attendees included Vice President Ramsahay Prasad Yadav, the Speaker of the House of Representatives Devraj Ghimire, National Assembly Chairperson Narayan Prasad Dahal, former prime ministers, heads of constitutional bodies, foreign diplomats, and representatives from the private sector. The parliament premises were decorated with national flags, and seating arrangements were made to reflect the protocol of a high-level state address.

What are the core political commitments outlined in the policy and program for FY 2025/26?

The government’s policy and program for fiscal year 2025/26 outlines several key political commitments grounded in Nepal’s constitutional framework and coalition consensus. A primary focus is on protecting and strengthening the federal democratic republican system, which the government refers to as a historic achievement of the Nepali people’s prolonged struggles and sacrifices. The government reaffirmed its resolve to resist regressive and anarchic forces attempting to undermine the Constitution and democratic system.

The policy further commits to initiating a constitutional review process to address legal ambiguities, reinforce effective provisions, and amend weaknesses. This process is to be conducted through broad political consensus, reflecting an emphasis on inclusive democratic reform.

To ensure political and policy stability, the document stresses the need for healthy competition, constructive dialogue, cooperation, and coexistence among political parties. The government has emphasized stability as crucial to achieving its broader goals of governance and development.

Moreover, the policy reiterates a commitment to democratic values, rule of law, and civic rights. It aligns closely with the minimum common program agreed upon by the ruling coalition of parties, aiming to promote effective governance, national unity, and institutional resilience in the face of internal and external challenges.

How does the government plan to reform development projects and infrastructure management?

The policy and program for fiscal year 2025/26 includes a significant shift in how development projects and infrastructure initiatives will be managed. The government has announced that it will reassess and reprioritize all ongoing and proposed infrastructure projects, including those introduced by previous administrations. This will be done by categorizing projects into those that can be completed within the current parliamentary term (ending 2027), those that are feasible within the fiscal year, and those deemed unviable or unsustainable, which will be suspended or scrapped.

This reprioritization is based on resource availability, implementation capacity, and urgency. The government cited examples of underperforming or stalled megaprojects, such as delays in the Budhi Gandaki Hydropower Project and cost overruns in airport constructions, which prompted the need for stricter evaluation.

An Integrated Project Bank system will be developed to prevent duplication and ensure resource optimization across the three tiers of government—federal, provincial, and local. Projects will be filtered based on national priority and contribution to productivity and employment. The policy also highlights the use of public-private partnerships (PPP) in viable infrastructure, with proper risk assessments and transparent bidding to ensure accountability.

What are the government’s priorities in Nepal’s foreign policy and diplomacy?

The government has reaffirmed its commitment to safeguarding Nepal’s sovereignty and national interests through a balanced and strategic foreign policy. The core of this approach involves maintaining strong diplomatic relations with neighboring countries and regional partners while advancing economic diplomacy to enhance Nepal’s global standing.

 The government aims to pursue regional cooperation in areas such as trade, security, and infrastructure development, strengthening Nepal’s position within South Asia. Emphasis will be placed on establishing and reinforcing mutually beneficial trade agreements and fostering ties with key global economic players.

Additionally, Nepal will continue its diplomatic efforts to maintain neutrality while engaging with global organizations on issues that impact national development, such as climate change and peacebuilding. The government’s foreign policy will prioritize Nepal’s sovereignty in international forums and ensure that Nepal’s interests are upheld across various multilateral platforms.

By maintaining a careful balance between international relations, regional cooperation, and economic diplomacy, Nepal seeks to achieve long-term stability and prosperity.

What reforms are being introduced to improve Nepal’s judicial system?

The government has outlined a series of judicial reforms aimed at making Nepal’s justice system more transparent, accessible, and victim-friendly. One of the central reforms includes simplifying the justice process to ensure that cases are resolved more efficiently and that the legal system is not bogged down by delays.

Additionally, efforts will be made to improve legal aid for marginalized groups, ensuring that everyone, regardless of their economic status, has access to justice. This will involve expanding public legal assistance programs and streamlining procedures for obtaining legal support.

Another key reform is to modernize the judicial infrastructure, making court processes more digitalized and reducing paperwork to speed up legal proceedings.

The government is also focused on improving the accountability of the judiciary by enhancing oversight mechanisms to ensure fairness and impartiality in court decisions. These reforms aim to create a more effective judicial system that can deliver justice promptly and transparently while addressing the needs of vulnerable and marginalized communities.

What are the planned reforms in education, including higher education and youth-targeted initiatives?

The government’s policy for fiscal year 2025/26 outlines a multi-pronged approach to education reform. It pledges to overhaul both school and higher education with the goal of aligning the sector with 21st-century needs. A key focus is on addressing the gap between education and employability, particularly among youth.

At the school level, the government will pass the long-pending School Education Bill—already tabled in Parliament—to institutionalize reforms. It aims to ensure access to basic education for all children by 2084 BS (2027 AD) and enhance the quality of public education through legal, policy, and institutional changes. Teacher management and curriculum revision will be prioritized.

In higher education, universities will be steered toward becoming hubs of knowledge creation, research, and innovation. University education will be linked to national development goals, with funding tied to performance metrics.

A new entrepreneurship-friendly education policy will be introduced to bridge the skill gap in the labor market. A startup initiative targeting Gen-Z youth will be launched, featuring tailored business plans and a supportive ecosystem including incubation centers, seed funding, and mentoring.

The government recognizes that education reform is essential to addressing unemployment and achieving the broader goal of a productive, knowledge-based economy.

What are the major plans for healthcare reform and access in the policy?

The government’s policy and program for FY 2025/26 includes a comprehensive plan to improve healthcare access, affordability, and sustainability. A key priority is the restructuring of the national health insurance system, which will now serve as a unified platform for delivering all government health aid and subsidy programs. This aims to enhance service efficiency and financial sustainability.

To address the urban-rural disparity in healthcare, the government plans to resolve imbalances in health infrastructure and human resources by allocating skilled health professionals and equipment to underserved areas. The recruitment and deployment of doctors and nurses in remote regions will be strengthened.

Further, the policy emphasizes upgrading primary health centers, district hospitals, and expanding specialized services such as maternal and neonatal care. The Health Information Management System (HIMS) will be digitized to improve patient tracking and data integration.

For long-term healthcare sustainability, the government has committed to integrating donor-funded health projects into national systems to reduce duplication and inefficiency.

Additionally, the government will promote preventive healthcare, encouraging early diagnosis and health education. By prioritizing public health and ensuring all citizens are covered under an improved insurance scheme, Nepal aims to move closer to achieving universal health coverage as outlined in its commitments under the Sustainable Development Goals (SDG 3).

How does the policy address agricultural modernization and food security?

Agricultural modernization is a cornerstone of the government’s plan for FY 2025/26. The policy prioritizes mechanization and commercialization of agriculture, aiming to significantly increase productivity, reduce manual labor, and ensure food security. This involves introducing advanced farming technologies and encouraging the use of modern equipment to improve efficiency in irrigation, harvesting, and storage processes.

The government is keen to integrate youth and technology into the agricultural sector by promoting agriculture-based startups and providing financial support for young entrepreneurs. The objective is to attract younger generations into farming through innovative solutions like precision farming, drip irrigation, and bio-farming. The Agricultural Mechanization Program, launched by the government, will also provide subsidies and loans to farmers for purchasing equipment.

Self-reliance in food production is another critical goal of the policy. To achieve this, the government intends to increase local food production by supporting small and medium-sized farms, reducing dependency on food imports.

A key component of the policy is the focus on agriculture value chains, including processing, packaging, and distribution. This will help farmers gain better market access and improve income through value-added agricultural products.

The overall goal is to enhance food security, boost rural incomes, and reduce poverty, aligning with Nepal’s broader sustainable development objectives.

What steps are being taken by the government to address environmental sustainability and combat climate change?

The government has committed to tackling climate change challenges with a comprehensive approach to environmental sustainability. A key element of this effort is the Sagarmatha Dialogue, an initiative designed to foster international collaboration on climate-related issues. This dialogue will bring together global experts, policymakers, and activists to discuss solutions to pressing environmental concerns, particularly in the context of the Himalayan region.

On the environmental front, Euro 6 emission standards will be introduced for vehicles to curb air pollution. Watershed management, land restoration, and improved human-wildlife conflict response through insurance-based relief will be prioritized.

Additionally, the government has set an ambitious goal of achieving net-zero carbon emissions by 2045. This commitment involves transitioning to clean energy sources, promoting renewable energy such as solar and wind, and enhancing energy efficiency across industries.

 The government will also focus on sustainable land management, including measures for watershed management and land restoration, to mitigate the impacts of climate change. Efforts will be made to strengthen environmental policies and integrate climate change adaptation strategies into national development plans.

Furthermore, the government is prioritizing solutions to human-wildlife conflicts, including the introduction of insurance-based relief systems to support affected communities and protect biodiversity. Through these steps, the government aims to reduce Nepal’s environmental footprint while promoting long-term sustainability and resilience to climate change.