Infrastructure policies and FY 2078/79 budget

Infrastructure development policies of Nepal are the guiding principles the government follows to plan, build, finance and maintain roads, bridges, irrigation, drinking water, energy, airports and communication. They are set out mainly in the Constitution of Nepal (2072) (directive principles on balanced and sustainable infrastructure), the Local Infrastructure Development Policy (LIDP), 2061, the National Transport Policy, 2058, the Public-Private Partnership and Investment Act, 2075, the Local Government Operation Act, 2074 and the periodic plans (the 15th Plan, 2076/77–2080/81, and the 16th Plan from 2081/82).

Key features

1. Decentralised planning and ownership – local infrastructure (rural roads, small irrigation, drinking water, trails, bridges) is planned and run by local governments; federal and provincial governments handle national and provincial projects.
2. LEP approach – works should be Labour-based, Environment-friendly and Participatory: use local labour and simple tools wherever technically possible, avoid damage to slopes, forests and rivers, and involve the people in every stage.
3. People's participation and users' committees – users form a committee that helps select, build, monitor and maintain the project; users share part of the cost in cash, labour or materials.
4. Use of local resources, skills and appropriate technology – local stone, timber, labour and know-how reduce cost and keep money in the village.
5. Prioritisation and balanced development – projects are ranked by need, cost-effectiveness and number of beneficiaries; backward, remote and disadvantaged areas get priority to reduce regional imbalance.
6. Social inclusion and gender equality – women, Dalits, Janajatis and the poor must be represented in users' committees and get a share of jobs and benefits.
7. Sustainability and maintenance – a maintenance plan and fund are part of every project; maintenance gets priority over new construction.
8. Transparency and good governance – public hearing, public audit, social audit and display boards at sites.
9. Private sector and foreign investment – large projects (hydropower, highways, airports, transmission lines) may use PPP, BOOT and FDI through the Investment Board Nepal.
10. Strategic national projects – National Pride Projects and "game changer" projects (highways, railways, airports, big hydro and irrigation schemes) get assured budget and fast-track handling.
11. Disaster resilience and environment – EIA/IEE is compulsory (Environment Protection Act, 2076) and structures must follow building codes and climate-resilient design.

Reflection in the FY 2078/79 budget

The budget for FY 2078/79 (first brought by ordinance on Jestha 15, 2078 and later replaced by the new government's budget) was about Rs 16.47 kharab (Rs 1,647 billion), of which roughly a quarter was for capital expenditure. Its infrastructure part reflected the policy features partly:

Assessment: The broad features (decentralisation, strategic projects, private investment) appear in the budget. However, LEP, maintenance and environmental safety were not given equal weight, and low capital spending (usually much less than allocated by the end of the year) meant the policy goals were only partly achieved. Better project selection, multi-year funding and stronger monitoring are needed so that the budget truly follows the policy.