Kathmandu, May 2: In the upcoming fiscal year 2082/83 (2025/26), the federal government will be allowed to raise internal loans not exceeding 5% of the estimated Gross Domestic Product (GDP).
The National Natural Resources and Fiscal Commission has recommended this limit while determining the internal loan ceiling for the federal, provincial, and local governments for the fiscal year 2082/83.
The commission’s recommendation states:
“Based on an analysis of Nepal’s overall economic condition, revenue and expenditure estimates, and market conditions, the Government of Nepal may raise internal loans not exceeding 5% of the projected GDP for FY 2082/83. These loans should be used for implementing projects/programs that are aligned with national policy/plans, have undergone cost-benefit analysis, show appropriate internal rate of return and net present value, and are classified as national pride projects, transformative projects, or priority projects under the medium-term expenditure framework.”
Provincial governments are allowed to take internal loans only if the necessary structural and procedural arrangements are in place. The loan amount must not exceed 12% of the total of (a) revenue shared from the federal government and (b) the province’s own internal revenue in FY 2082/83. These loans must also be approved by the federal government.
Similarly, local governments have also been given a borrowing limit. If structural and procedural provisions for internal borrowing are in place, they may raise internal loans up to 12% of the combined total of (a) revenue received from the federal and provincial governments and (b) their own internal revenue for FY 2082/83. These must also align with national, provincial, and local plans and be used for implementing approved projects/programs. #nepal #GDP #internal_loan
