---
title: "Infrastructure policies and FY 2078/79 budget"
subject: "Technology, Environment and Society"
chapter: 2
key: "semester_7/technology_environment_and_society:infrastructure-policies-budget"
source: https://www.bctengineer.com/q/semester_7/technology_environment_and_society/infrastructure-policies-budget
site: BCT Engineering
---

# Infrastructure policies and FY 2078/79 budget

Technology, Environment and Society · Chapter 2: Development Approach

- Asked in: 2079 Baisakh, 8 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/technology_environment_and_society/infrastructure-policies-budget
- Whole chapter: https://www.bctengineer.com/md/semester_7/technology_environment_and_society/chapter-2

## Question

What are the key features of infrastructure development policies of Nepal? Are these features reflected in the fiscal year 2078/79 B.S. budget?

## Short answer

Nepal's infrastructure policies emphasize decentralisation, LEP, users' committees, local resources, prioritisation for backward areas, inclusion, maintenance, transparency, PPP/FDI, strategic projects and disaster resilience. The FY 2078/79 budget (Rs 16.47 kharab, about a quarter capital) reflected these partly, funding National Pride Projects and fiscal transfers to provinces and local levels.

## Answer

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**:

| Policy feature | Reflected in 2078/79 budget? |
|---|---|
| Strategic projects | Yes – continued funding to National Pride Projects: Mid-Hill and Postal highways, Kathmandu–Terai Fast Track, Melamchi, Gautam Buddha and Pokhara airports, railways |
| Decentralisation | Yes – fiscal transfers (equalisation, conditional, special and complementary grants) to 7 provinces and 753 local levels |
| Energy and access | Yes – emphasis on transmission lines, cross-border trade of power and electricity access to all households |
| PPP and private investment | Yes – projects offered through the Investment Board and PPP |
| Users' participation, LEP | Partly – local roads and irrigation through local levels and users' committees, but much work went to contractors with heavy machines |
| Maintenance priority | Partly – maintenance funds existed, but new projects were favoured |
| Balanced development | Partly – many small "pocket" projects spread thinly for political reasons |
| Environment and disaster resilience | Weak – recovery from COVID-19 dominated; roads cut by bulldozers without EIA continued |

**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.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Under Nepal's infrastructure policy, who plans and runs local infrastructure such as rural roads and small irrigation?
   A. Federal government only
   B. Foreign donors
   C. Provincial government only
   D. Local governments
   Answer: D. Local infrastructure is planned and run by local governments; federal and provincial governments handle national and provincial projects. (Key point: Decentralised planning)

2. What does the policy say about maintenance?
   A. Maintenance plan and fund are part of every project, with priority over new construction
   B. Maintenance is ignored
   C. New construction always comes first
   D. Maintenance is only for foreign projects
   Answer: A. Sustainability requires a maintenance plan and fund, giving maintenance priority. (Key point: Priority for maintenance)

3. How may large projects such as hydropower and highways be financed?
   A. Only by users' labour
   B. Through PPP, BOOT and FDI via the Investment Board Nepal
   C. Only by local taxes
   D. Not at all
   Answer: B. Large projects may use PPP, BOOT and foreign direct investment. (Key point: Large projects financing)

4. How did the FY 2078/79 budget reflect LEP, maintenance and environment features?
   A. Fully
   B. Not at all, including strategic projects
   C. Only partly or weakly, as much work went to contractors with heavy machines and new projects were favoured
   D. Better than strategic projects
   Answer: C. Broad features appeared, but LEP, maintenance and environmental safety were given less weight. (Key point: Budget 2078/79 assessment)

## Related in Technology, Environment and Society

- [Key features of infrastructure development policies](https://www.bctengineer.com/question.md?key=semester_7%2Ftechnology_environment_and_society%3Ainfrastructure-development-policies) — Technology, Environment and Society, chapter 2