Nepal Improves Budget Transparency, But Public Participation in Fiscal Decisions Remains Weak

Nepal has shown gradual improvement in financial transparency and budget openness, according to the latest Open Budget Survey–2025 published by the International Budget Partnership (IBP). The report indicates that Nepal scored 52 points in overall budget transparency, reflecting progress compared to the country’s standing in 2023. While the improvement signals advancement in fiscal disclosure practices, the report also highlights persistent weaknesses in citizen participation and parliamentary accountability within Nepal’s budget-making process.

The Open Budget Survey is regarded globally as one of the major assessments of how governments manage public finances and disclose budget-related information to citizens. The survey evaluates countries based on three major indicators — budget transparency, public participation in the budget process, and oversight through institutional checks and balances. Nepal’s improved score suggests that the government has become relatively more open in publishing information related to taxes, public expenditure, borrowing, and fiscal policy decisions.

The report stresses that government policies on taxation, public services, and debt management directly affect citizens’ daily lives. Because of this, it argues that meaningful public participation is essential to ensure that public resources are used in ways that genuinely serve public interests. According to the survey, transparency alone is not enough unless citizens are also able to participate effectively in decision-making and monitoring processes.

Despite gains in transparency, Nepal’s public participation score remains notably low. The country secured only 28 points in the citizen participation category, indicating that ordinary citizens still have limited opportunities to directly influence budget priorities, spending decisions, or oversight mechanisms. The report suggests that although certain institutions have made progress in engaging the public, the overall fiscal decision-making structure remains heavily centralised within the executive branch.

According to the findings, the Office of the Auditor General has provided comparatively better opportunities for public engagement and consultation. However, the report states that participation mechanisms within the executive and parliamentary systems remain weak and insufficient. This reflects a broader structural issue in Nepal’s governance system, where budget discussions are often concentrated among bureaucrats, political leaders, and technical officials rather than opened to wider civic dialogue.

Researcher Taranath Dahal described the recommendations included in the report as highly relevant for Nepal’s financial governance reforms. He emphasised that improving fiscal transparency is not only about publishing documents, but also about ensuring that public feedback meaningfully shapes policy decisions. According to him, relevant state institutions should now focus more seriously on implementing the recommendations rather than treating the report merely as an international assessment.

The report further recommends strengthening consultation mechanisms to make public participation more effective. It argues that citizen feedback should be incorporated into policy-level decisions instead of remaining symbolic or procedural. Experts say this is particularly important in Nepal, where budget allocation often faces criticism for being politically influenced and disconnected from local development priorities.

The survey also highlights the importance of inclusive public financial management. It notes that effective implementation of Nepal’s Third Public Financial Management Reform Strategy could help improve parliamentary accountability and ensure better representation of marginalised communities in fiscal policymaking. In recent years, concerns have frequently been raised over whether national budgets adequately address the needs of remote regions, disadvantaged groups, and local governments.

Another key recommendation included in the report is the introduction of citizen participation practices during parliamentary hearings related to budgets and audit reports. Analysts believe such measures could strengthen democratic accountability by allowing civil society groups, experts, and ordinary citizens to directly question or provide feedback on public spending and financial oversight.

Policy observers say Nepal’s improving transparency score sends a positive signal to international development partners and financial institutions, especially at a time when the country is facing increasing fiscal pressure, rising public debt, and growing demands for efficient use of public resources. Greater openness in budget management may also improve investor confidence and strengthen trust in public institutions.

However, experts caution that transparency indicators alone do not automatically guarantee better governance outcomes. Without stronger citizen engagement, institutional accountability, and effective parliamentary scrutiny, the risk of inefficient spending, policy capture, and misuse of public funds may still remain. They argue that Nepal’s next challenge is not only to publish budget information, but to make fiscal governance genuinely participatory and accountable to the public.