Kathmandu-  The government is set to increase civil servant's salaries in  upcoming budget 2026-27.

Finance Minister Swarnim Wagle is scheduled to present the new budget at a joint meeting of the Federal Parliament on Friday at 4 pm. According to the Ministry of Finance, the budget preparation has reached its final stage, with officials currently editing budget figures, language, and adjusting revenue rates.

Earlier, the Salary and Allowance Review Committee led by Chief Secretary Suman Raj Aryal had recommended a 57 percent salary hike for civil servants

A source closed tp Finance Ministry informed that  Finance Minister Wagle has received approval to increase salaries by around 20 percent .
That source said that the main challenge after the proposed salary hike will be managing long-term financial liabilities.

Meanwhile, social security allowances are unlikely to increase due to growing fiscal pressure.

The government is preparing policy measures aimed at reducing long-term liabilities related to social security allowances. The ministry plans to gradually reduce pressure on state-funded allowances by expanding the contribution-based Social Security Fund.

The government’s fiscal pressure has become increasingly visible in recent months. During the first 10 months of the current fiscal year, the government spent Rs 1.173 trillion while collecting only Rs 1.12 trillion through revenue, foreign grants, and other sources of income.

According to officials, the government is currently facing a deficit of nearly Rs 1.5 trillion and has been relying on both domestic and foreign borrowing to bridge the gap.