One Budget, Four Wallets

Each year, the national budget arrives with the usual fanfare. Newspapers run special editions, experts fill the airwaves, and social media lights up with confident takes. Everyone seems to know what matters, and what might spell disaster. Allocations are dissected. Reforms are declared historic—or hollow. It's a familiar rhythm.

But amid the noise, it’s easy to forget the question that matters most: What does the budget actually mean for the people who live with its consequences?

Rather than speak in macro terms or sweeping averages, this piece looks through the lens of four households—not real people, but carefully constructed profiles that represent distinct realities in Nepal’s economic landscape.1 One sits comfortably at the top of the income distribution. One represents the aspirations and anxieties of Kathmandu’s middle class. One navigates life with little margin for error. And one lives far from the big cities, grounded in a different rhythm of stability and constraint.

We’ll call them: the Executives, the Strivers, the Steady Hands, and the Precarious Workers. Together, they offer a grounded view of how policy plays out—not in charts or speeches, but in lived experiences.

For most Nepali households, these three examples reflect fragments of their lives. They would place the budget bhaasan somewhere between a burst of noise with flashes of information and a steady echo they have learned to ignore.

We begin with an example of a family just above the middle, the Strivers—comfortable enough to expect more from life, but not secure enough to tune out completely. This family of four lives in a nice, rented apartment in Kathmandu. Together, the couple brings home around 12 lakh rupees each year. Their relatives think the couple is doing quite well, but they often find themselves holding back. The children attend a mid-range private school, and the family goes to private hospitals or clinics for medical care. The family has a small car financed through a bank loan. They are happy that EVs won’t face higher taxes this year, but upgrading remains a distant goal.

For them, the headline numbers offer little relief. Income tax bands are where they were, there are no new visible subsidies, and VAT on groceries they buy regularly are pretty much where they used to be. One partner employed in the IT sector sees an opportunity in the fixed 5% tax on export of digital services. She is considering switching to freelance work and drawing international clients—maybe they can upgrade to an EV sooner than expected.

While they can be optimistic about the opportunities, there are some unwelcome surprises their wallets will notice very soon. The removal of the 5% luxury tax on international travel will make that dream family vacation a little more affordable. When they meet up with friends to take a much-needed break over the weekend, their favourite scotch will be much more expensive because of the hike in customs and excise duties. While their income tax burden is under 1 lakh rupees, they will pay more for their occasional indulgences.

A little further down the ladder, you will find the Steady Hands. For them, it is all about keeping things going and not getting left behind. This family of four lives in a rented home in a major town outside of Kathmandu. Both partners work modest jobs and bring home around 6 lakh rupees a year. One of them works in the public sector, so the increased monthly dearness allowance of 5,000 rupees—up from 2,000 rupees last year—comes as good news. Put together, this is enough to cover most of their regular expenses, but they find themselves asking their cousin in Australia to help out occasionally. They decided to send their kids to a private school since last year, hoping that it would open new doors for them. They quietly worry whether they’ll earn enough to keep the children there.

When someone in the family falls ill, they hope it is nothing serious. There is a regional hospital nearby offering affordable care, but the long wait times and doubts about service quality make them nervous. They would like to go to a private hospital, but the potential bills scare them. The national health insurance scheme could be a saviour, but they are not confident that it will cover what they need, when they need it.

Their motorcycle is a lifeline for their family. It gets them to work, to the stores, and anywhere else they need to be. They do not pay much income tax—under 6,000 rupees—but the VAT on everyday goods increases their tax burden. Weekends might get a little cheaper or more expensive, depending on your drink of choice, but either way, this is not a family that splurges often.

While the Steady Hands are just managing to keep up, the Precarious Workers are trying not to slip through the cracks. Families like theirs are all over Nepal, in remote villages that are shrinking as aspirants move out for better opportunities.

This family of five lives off a delicate mix of subsistence farming, occasional wage work, and the remittance that arrives every two months from their son working in India—one of the few reasons the family keeps track of the calendar on the wall. Altogether, the family makes about 3 lakh rupees a year. They spend everything they earn, maybe more, on the bare essentials. They own their home, but do not have reliable electricity, and in the winter, it tends to get uncomfortably chilly.

They send the children to the local government school, where the mid-day meal remains a strong motivator to keep attendance up. When someone gets sick, they go to the nearest health post, hoping they can see someone who can help them. The district hospital has become more accessible now, but the trip is still expensive.

They don’t pay much in taxes, but even the smallest state transfers make a difference. They are relieved that the Social Security Allowance is not going away. The 30,000-48,000 rupees they could receive is not just a nice-to-have—it is often what keeps food on the table. But the eligibility age for seniors was raised from 68 to 70. One member of the family—the grandfather who could have started receiving the payouts—quietly hopes they don’t increase it again by the time he turns 70.

The budget also makes lofty statements about improvements in the social security system that will make their lives easier, but the family cares little about it. They care about whether the next remittance will arrive on time, and about the midday meal at the school. So far, both of those things are working fine, but they worry, as they often do.

Most of us do not rush to see what is in the budget because we do not feel seen by it. However, the fact that the budget does not reach the majority is not an argument for disengagement, it is an argument for better delivery.

For most Nepali households, these three examples reflect fragments of their lives. They would place the budget bhaasan somewhere between a burst of noise with flashes of information and a steady echo they have learned to ignore.But the people at the top of the pile—the Executives—track it with purpose. It has important implications on their day-to-day lives, spanning everything from their investments to their lifestyle. Where others wait to see what they might expect to receive when they look at the budget, the Executives see what it will cost them.

This small nuclear family lives in a spacious home they own, and they also have another property they rent out. Between their high-paying jobs and rental income from the second home, they bring in over 25 lakh rupees a year. The family spends comfortably but is still able to put aside a healthy chunk in savings. The household’s finances are planned, buffered, and largely insulated from shocks.

They send their child to an international school where tuition can easily exceed the household income of the other three examples we discussed. They are perhaps pleased that taxes on EVs are unchanged, and it might be a good idea to swap out the second car for an electric one too. Their weekends will not change much, but they will get more expensive. It is noticeable, but hardly unaffordable.

By any measure, they are in the highest tax-paying bracket. For this particular family, income tax alone exceeds 2.5 lakh rupees. Add to that the taxes on consumption, and other taxes they incur on proceeds from investments, and their contributions to state revenue are substantial. They see themselves as taxpayers first, beneficiaries second.

Despite the disproportionate burden, they still see a silver lining. The government’s clarity on tax benefits for startups and exporting IT services spells entrepreneurial opportunity for the technologically inclined. Even if they are far from the sector today, they might choose to invest in a friend’s firm.

For them, the budget is a lot more personal. It tells them how much of their money they get to keep. The important question is whether the government is getting in their way or out of it. Their primary concern is stability and predictability, and on those fronts, the budget seems to do just fine.

From the lens of these four households, the budget looks quite different. The taxpayers at the top pay for a state they hardly interact with. They do not benefit much, but at least they know what it is going to cost them. The Strivers and the Steady Hands carry quiet burdens, watching for signs of improvement, and the Precarious Workers wait for lofty slogans to become more than poetry.

Perhaps the real takeaway is in what does not happen. Most of us do not rush to see what is in the budget because we do not feel seen by it. However, the fact that the budget does not reach the majority is not an argument for disengagement, it is an argument for better delivery. Implementation is where policies become real. If the state wants attention from the people it claims to serve, it will need to be more present, not just in speeches, but in schoolyards, health posts, and kirana pasals. That is the story worth watching next year.