FNCCI’s Naresh Lal Shrestha Warns Nepal’s New Budget Could Push Prices Higher

Naresh Lal Shrestha, Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has described Nepal’s upcoming fiscal-year budget as ambitious while warning that its success will depend on how well the government manages scarce resources and taxation policy.

Speaking at a post-budget discussion in Kathmandu organized by the Nepal Economic Journalists Association (NAFIZ), Shrestha said the budget faces major implementation challenges because capital expenditure is limited to only 20 percent. He argued that such a low allocation leaves little room for the kind of investment needed to accelerate growth and improve economic activity.

Resource constraints remain the biggest concern

Shrestha’s comments point to a familiar issue in Nepal’s public-finance debate: budgets can look bold on paper, but weak execution often limits their impact. With capital spending restricted to a relatively small share, the challenge is not just announcing priorities, but finding the money and administrative capacity to deliver them effectively.

For businesses, that gap matters. Capital expenditure typically supports infrastructure, logistics, and public projects that can help reduce costs across the economy. If those investments stall, the broader private sector can feel the impact through slower demand and weaker confidence.

Why the VAT warning matters

Shrestha also warned that applying the same value-added tax to everyone could lead to price increases. His concern reflects the risk that a uniform tax structure may raise costs for consumers and businesses if it does not account for differences in sectors, company sizes, or market conditions.

That warning is especially relevant in an economy where inflation and purchasing power remain sensitive issues. If VAT changes are passed on to customers, everyday goods and services could become more expensive, adding pressure to households already managing tight budgets.

What the business community is watching

The FNCCI leader’s remarks suggest that Nepal’s private sector wants more than ambitious fiscal targets. It wants a budget that is practical, targeted, and realistic about the country’s spending capacity.

In that sense, the debate is not only about the size of the budget, but about how effectively it can turn policy promises into visible economic results. For entrepreneurs and investors, execution, tax fairness, and price stability may matter just as much as headline numbers.