The Ministry of Urban Development has sent a proposal to the Finance Ministry to release the budget for 533 development projects that had been put on hold by the government led by Sushila Karki, formed after the Gen-Z movement.

The total budget for these projects is estimated at around Rs 17 billion. Currently, 1,280 development projects run by the Ministry of Urban Development remain on hold. Of these, the proposal seeks to release the budget for 533 projects.

Narayan Mainali, spokesperson for the Ministry of Urban Development, stated that the budget for the 533 development projects has been proposed for release to the Finance Ministry.

The Karki-led government had frozen development budgets worth Rs 120 billion (related to infrastructure and development programs) for three months.

During a press conference marking the completion of 100 days in office, Minister for Physical Infrastructure and Transport, Minister for Urban Development, and Minister for Energy, Water Resources, and Irrigation, Kulman Ghising, stated that the government would gradually release the budgets for the frozen development projects. In line with this commitment, the proposal for releasing the budget of 533 projects has been submitted to the Finance Ministry.

Ravindra Bohara, Director General of the Department of Urban Development and Building Construction, expressed optimism that the budgets would soon be released. “I am hopeful that budgets for projects that have completed all preparations, have proper planning, and are recommended by municipalities will be released soon. Holding these projects harms the economy,” he said.

The Council of Ministers had decided on September 20 to freeze development budgets totaling around Rs 110 billion, citing unproductive expenditures and the need for frugality. Following this decision, the Finance Ministry issued a 15-point circular to various ministries and agencies.

The circular directed that projects newly entered in the budget information system (LIMBS) but lacking preparation, projects using dual technology, small-scale projects of low priority, budgets allocated for minor purposes despite being entered under budget headings, and small or fragmented projects at provincial or local levels, remain frozen.

To release the frozen budgets, a decision from the Council of Ministers is also required. Therefore, the proposal sent by the Urban Development Ministry to the Finance Ministry must go to the Cabinet.

The freeze has most heavily impacted the Ministry of Urban Development.

Experts warn that freezing development budgets halts government spending on development, negatively affecting overall economic activity. “The government annually spends only 60–65 percent of the development budget. If budgets are frozen further, economic activity stops and unemployment rises,” they say.

Employees report that development budgets were frozen without consulting the concerned ministries, affecting programs run by the ministries of Physical Infrastructure and Transport, Drinking Water, Urban Development, and Energy, Water Resources, and Irrigation.

Freezing development projects creates public disappointment and unemployment among skilled personnel, according to an employee of the Urban Development Ministry.