Budget 2083/84 Signals Digital Ambition, but Questions Remain Over Inclusion and Job Creation

Presenting the budget for fiscal year 2083/84, Finance Minister Dr. Swarnim Wagle identified information and communication technology (ICT) and artificial intelligence (AI) as the main pillars of Nepal’s economic transformation. In the Rs 2.124 trillion budget, repeated references to information technology, AI, startups, digital infrastructure, fintech, computing, and remote work indicate the government’s recognition of the ongoing global digital shift.

While the policy direction reflects strong digital ambitions, questions remain about how effectively these measures will translate into economic opportunities, employment generation, and support for Nepal’s broader technology ecosystem. In particular, the budget offers limited clarity on support mechanisms for small and medium-sized technology firms, startups, and regional innovation initiatives.

Positive Aspects

Several policy measures announced in the budget have been welcomed by industry observers. The government’s plan to sell the remaining shares of Nepal Telecom to the public, its commitment to positioning Nepal as a regional technology hub, and the decision to open information technology services to foreign investment are viewed as significant steps toward attracting capital and strengthening the sector.

The budget also proposes legal provisions allowing Nepali citizens to work remotely for foreign companies while residing in Nepal, alongside increased investment in digital public infrastructure.

Similarly, plans to expand the Nagarik App, establish a fintech marketplace, and centralize government software procurement could contribute to more efficient digital governance and public service delivery.

One of the most ambitious announcements is the establishment of a Sovereign AI Compute Center in Syuchatar. The government plans to acquire thousands of AI processing units and provide startups with concessional access to computing resources, a move that could position Nepal among the early adopters of national AI infrastructure in South Asia.

The provision granting a 100 percent tax exemption on sweat equity for human resources working in the information technology sector is also expected to improve the attractiveness and formalization of Nepal’s startup ecosystem.

But for Whom Was This Budget Made?

Despite these announcements, critics argue that the budget appears more focused on large investors, major infrastructure projects, and capital-intensive technology ventures than on the realities of Nepal’s existing technology industry.

Much of Nepal’s digital economy is driven by small software companies, outsourcing firms, freelancers, startups, and mid-sized innovators. However, the budget offers few targeted programs addressing their specific challenges, including access to financing, research grants, export support, and market expansion opportunities.

While initiatives such as the proposed Nepal Enterprise Facility are mentioned, details regarding its intended beneficiaries remain unclear.

Industry stakeholders frequently identify limited access to investment, international payment barriers, policy uncertainty, brain drain, and the small domestic market as major constraints to growth. The budget does not appear to directly address many of these structural issues.

Data Centers and AI: Capital-Intensive Development Over Employment

Among the most discussed provisions in the budget are investments in AI infrastructure and data centers. While these projects may strengthen Nepal’s digital capabilities, questions remain regarding their broader economic impact.

Data centers are typically capital-intensive facilities that require substantial upfront investment but generate relatively limited long-term employment compared to other sectors. Their development can also increase demand for electricity, water, and supporting infrastructure.

Analysts argue that in a country facing persistent unemployment and labor migration challenges, digital transformation strategies should extend beyond infrastructure development alone.

Many experts suggest that parallel efforts in AI education, research funding, local language technologies, university-industry partnerships, and workforce development programs should accompany investments in AI infrastructure. These areas, however, receive comparatively less attention in the current budget framework.

Cross-Border IT Services: Opportunity or Inequality?

The government’s decision to provide legal clarity for Nepali citizens working remotely for foreign companies has generally been welcomed as a progressive policy measure. However, concerns remain about who will be able to benefit from these opportunities.

Professionals who already possess international networks, advanced digital skills, and strong English-language proficiency are likely to be the primary beneficiaries. Meanwhile, the budget provides limited guidance on how similar opportunities will be extended to rural youth, emerging entrepreneurs, or smaller technology firms.

Some observers also note that the expansion of cross-border IT services may disproportionately benefit larger companies and multinational firms with established international connections and greater financial resources.

Overall, the budget reflects a vision of technology-led growth centered largely on infrastructure development and investment attraction. However, industry stakeholders argue that achieving a truly inclusive digital economy will require stronger support for small and medium enterprises, greater investment in research and development, policies aimed at retaining local talent, and initiatives that encourage innovation beyond major urban centers.

Without such measures, they caution, Nepal’s ambition of becoming a regional technology hub could primarily benefit a limited number of investors while offering fewer direct gains for the broader workforce and local communities.

पछिल्लो अध्यावधिक: जेठ १७, २०८३ १२:१६

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