Diminishing Returns: Former Finance Minister Highlights Health Budget Cuts
Ex-Finance Minister Says
11th December 2025, Kathmandu
Former Finance Minister Rameshwar Khanal recently voiced serious concern over the continuous reduction in budget allocations for fundamental sectors like health and education over the past ten years.
Ex-Finance Minister Says
Speaking at a program in Kathmandu on Thursday, he explicitly stated that health budget cuts are a detrimental trend for the nation. This key issue demands immediate attention and effective remedial action.
Revenue Rises, Allocation Drops
Khanal highlighted a striking disparity. While the country’s overall revenue structure has expanded significantly, the budgetary allocation towards the health and education sectors has actually decreased. This suggests a misalignment in national fiscal priorities. Government resources, which have grown considerably, are not being adequately channeled into essential public services.
Khanal provided a historical perspective on government financing. “Fifteen years ago, it was difficult for us to reach 13% of the total GDP in revenue. Now, our revenue base reached close to 23% and is currently around 18-19%,” he noted. He stressed that it is unacceptable for the size of government resources to increase while the allocations for health and education decline.
Need for Inter-Governmental Cooperation
The former Finance Minister suggested that the budget reduction might stem from a lack of necessary cooperation among key government bodies.
Specifically, he pointed to a disconnect between the Ministry of Finance, the National Planning Commission, and other governmental mechanisms.
He believes this lack of synergy obstructs efficient budget allocation in the health sector. He acknowledged that resolving this complex issue will require a sustained, long-term effort rather than an immediate fix.
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Addressing Health Insurance Payment and Structure
A critical area of discussion was the government’s responsibility regarding health insurance payments. Khanal firmly stated that the government must take ownership of the responsibility for settling outstanding health insurance payments. He confirmed his support for clearing the dues accumulated under the national health insurance program.
He revealed that he has urged the Health Minister to expedite the process for completing all pending payments. He maintained that the current government cannot justify withholding payments merely because previous governments did so.
However, Khanal also called for a necessary reconsideration of the entire health insurance scheme. He stressed the need to review whether the program’s structure is sustainable for the state. He cautioned against maintaining structures that the state cannot afford to manage effectively in the long run.
Ensuring Adequate Financial Access for Institutions
Khanal strongly emphasized the necessity of providing sufficient financial access to health institutions. Healthcare providers must have the required funds to operate efficiently and deliver quality services. Without adequate and timely financing, the quality of public healthcare will inevitably suffer.
He also clarified the role of the Ministry of Finance concerning health sector budgets. He stated that the Ministry should not cut the health sector budget without valid justification.
Nevertheless, he pointed out that resources are not automatically granted upon request. Everyone involved must be mindful of the judicious use and proper stewardship of national resources. This requires accountability and transparency from all stakeholders. Khanal’s remarks underscore the urgent need for a fundamental policy shift to prioritize public health investment.
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