Provincial Budgets 2022/23

Governments Focus on Employment Generation

In the budget for the new fiscal year, the focus of provincial governments has been on creating employment and providing skill development training to youths.


On June 15, all seven provincial governments presented their annual budget for the Fiscal Year 2022/2023 before their respective provincial assemblies. At a time when the country’s economy is facing several external and internal headwinds, the governments have put their focus on economic revival and providing employment opportunities to youths.

The combined budget of all the seven provinces for the new fiscal year has amounted to Rs 305.46 billion, nearly 17 percent higher than the last fiscal year’s budget.
As Nepali youths are migrating abroad in large numbers for job opportunities every year, the provincial budgets have centered on employment generation, providing vocational training to youths and promoting industrial estates.

It is estimated that at least half a million youths enter the job market every year in Nepal. But, after failing to land a job, a huge number of youths, who lack skills and experience, fly abroad in search of employment opportunities. Then they find themselves surrounded by the realities of working at minimum wages in low-paying jobs given the lack of skills and proper training.

The programs introduced by provincial governments are expected to help youths traveling abroad for jobs to receive better wages. According to the official data, the unemployment rate in Nepal currently stands at 11 percent. The latest study by the Ministry of Labour shows that at least 60% of youths in foreign employment are unskilled and are earning a considerably low income. The average paycheck Nepali migrant workers receive in foreign lands is just around Rs 30,000.
To address these problems and increase the employability of youths, the provincial governments have announced different programs in their budgets:

Bagmati Province
The Bagmati Province government has announced the ‘Chief Minister’s Skill Development and Employment Program’ to provide employment skills to 10,000 youths. Through the program, the provincial government aims at providing job opportunities to youths within the country.

According to the Bagmati provincial government, the program will give priority to people from poor families and the members of conflict-affected families in the province. According to Salikram Jamarkattel, Minister for Economic Affairs and Planning of Bagmati Province, the government has allocated a total of Rs 150 million for the program.

The provincial government has announced that it will collaborate with industrial enterprises in the province and provide skills and training to youths within the industry setup.

“The program aims at providing skill-based training to foreign employment returnees, and foreign employment aspirants. The provincial government will provide training to youths as per the demand in destination countries. The government will collaborate with the Council for Technical Education and Vocational Training (CTEVT) for verification of skill-based training received by youths,” reads the budget speech.

Likewise, money has also been allocated to bring self-employed people, employees in both formal and informal sectors, and those in foreign employment under the government’s Social Security scheme.

Similarly, employees who are employed on a contract basis in the Bagmati government will also be included in the Social Security scheme. Such employees will be registered in the scheme in collaboration with the federal government, according to Minister Jamarkattel.

The Bagmati government is also establishing a ‘Help Desk’ at the Ministry of Labor, Employment, and Transport, for the protection and promotion of workers’ rights. The province government has allocated a total of Rs 970 million for the Ministry of Labor, Employment and Transport, according to Jamarkattel.

Province 1 
The Province 1 government has allocated money to conduct skill-based training programs to produce beauticians, carpenters, barbers, electricians, plumbers, and skilled technicians in the province.

In his budget speech, Minister for Internal Affairs and Planning Indra Bahadur Angbo said that the Employment Information Center would be strengthened in the Fiscal Year 2022/23. This year, the Province 1 government is also planning to formulate an employment policy.

Likewise, the government has also announced to make the Provincial Labor Advisory Council more active in a bid to facilitate the coordination between employees and employers. The government has also allocated money to formulate provincial policies and laws related to the social security of employees.

The Province 1 government has allocated a total of Rs 468.8 million for the Ministry of Industry, Commerce, Labor, and for the employment sector.

Lumbini Province
The Lumbini Province government has announced ‘Berojgarlai Rojgar: Sathma Cha Pradesh Sarkar’ (Employment to the Unemployed: Support from the Province government) program to provide skill-based training to unemployed youths, target groups, and members of conflict-affected families. The program will be conducted by studying employment opportunities and demand from the labor market.

For the program, the Lumbini government has allocated a total of Rs 34.8 million, according to Krishna Dhowj Khadka, Minister for Economic Affairs and Cooperatives of Lumbini Province.

Presenting the budget, Khadka said that Rs 10 million has been allocated to set up a “Skill Academy” with a laboratory in Pyuthan district. “Necessary arrangements will be made to provide training and skill enhancement programs to foreign employment aspirants. The skills of foreign employment returnees will also be tested to engage them in their respective professions,” said the minister.

The provincial government has also stated that it aims at collaborating with technical schools to enhance the skills of youths who lost their jobs due to the Covid-19 pandemic. Likewise, the provincial government has allocated money to collaborate with the private sector to provide on-the-job training to youths.

Madesh Province
The Madesh Province government has allocated Rs 250 million for the ‘Chief Minister Skill Promotion and Employment Program’. Under the program, the government plans to collaborate with private, non-governmental organizations, and local governments to produce skilled employees for the industries in the province.

Karnali Province
The Karnali Province government is planning to conduct awareness and promotion programs related to labor and employment. Likewise, the provincial government is also conducting awareness programs to end child labor in the province.
Presenting the budget, Minister for Economic Affairs and Planning Bindaman Bista said that the program will be launched to provide job opportunities to unemployed, and to foreign employment returnees. The province government has allocated a total of Rs 30 million for the program, which focuses on enhancing the capacity and skills of youths.

Gandaki Province
The Gandaki Province government is launching a program to encourage startup businesses and promote an entrepreneurial mindset among youths. Likewise, the province will also establish industries that will utilize the local labor force, local capital and raw materials.
Presenting the budget, Finance Minister Ramji Prasad Baral said that the province has given continuity to the program that aims at increasing the production capacity of the cottage and small industries. Under the program, the government aims at modernizing the industries based on traditional technologies.

Sudurpaschim Province
The Sudurpaschim Province has announced to conduct various vocational and skill-based training specifically targeting women, dalits, marginalized and backward groups to enhance skills, and increase self-employment potential among youths. The province has allocated a total of Rs 41.5 million for the program ‘Sip Sikau, Udhyamsil Banau’.

Likewise, the government has allocated money for the safety of workers in the workplace, health counseling, development of entrepreneurship, among others.

Federal Government’s Plans for Employment Generation

The programs presented by provincial governments focusing on skill enhancement and training are the continuity of the programs brought by the federal government.

Presenting the budget for the Fiscal Year 2022/23, Finance Minister Janardan Sharma said that skill development training will be conducted in all three tiers of the government. According to Sharma, these programs will help youths to get jobs after entering the job market.

For the new fiscal year, the government has changed the modality of the Prime Minister Employment Program. “In collaboration with local governments, barren lands will be identified for the programs. Unemployed youths registered in the Employment Service Center would be provided job opportunities in the agriculture and production sector through this program. Every year, at least 200,000 unemployed youths would be provided job opportunities through the Employment Service Center,” said Sharma. “The government has allocated Rs 7.05 billion for the Prime Minister Employment Program.”

Similarly, 500,000 unemployed in deprived communities would be registered in the Labor Cooperative of respective local units. The government plans to provide job opportunities to them in development projects having an investment of up to Rs 100 million.

According to Sharma, the government is also planning to prepare a database of skilled manpower throughout the country.

“The government encourages foreign employment returnees to invest their skill, capital and experience in Nepal. The government would provide soft loans to the returnees to start a business in Nepal,” according to Sharma. “The government will establish multipurpose training centers in all the seven provinces.”
The government has allocated a total of Rs 9.13 billion for the Ministry of Labor, Employment and Social Security for the current fiscal year.

“The government will provide skill-based training to foreign job aspirants as per the demand in the destination countries. The government will also identify new lucrative job markets for youths,” he said.

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