The health budget must not remain a number. It must become medicines on shelves, insurance that works, emergency care, dialysis closer to patients, and protection from the financial shock of illness
Nepal's proposed commitment to raise the health-sector budget to 8 percent of the national budget could become a major reform step. But the promise will matter only if it moves from allocation to care: functional clinics and hospitals, stocked medicines, trained health workers, insurance that works, emergency care for mothers and newborns, dialysis access, and protection from catastrophic health costs.
The Balen Shah-led government's 100-point agenda and the proposed 18-point National Commitment have created an important policy opening. But the real test is whether this commitment is reflected in the budget and implemented on the ground. The 8 percent target should be understood as a phased increase in health's budget share, not a slogan of any single party or government.
It is rooted in national priority and global commitment. Nepal's National Health Financing Strategy 2023-2033 calls for expanded fiscal space, social protection, lower out-of-pocket expenditure, and stronger accountability, while the World Health Assembly's WHA78.12 resolution urges countries to strengthen health financing for universal health coverage. The target can become a shared national minimum agenda if translated into budget lines, implementation targets and public reporting.
Nepal's current Ministry of Health and Population allocation remains below 5 percent of the national budget. In FY 2025/26, it received around Rs 95.8 billion out of a national budget of around Rs 1,964 billion. Using the same base, an 8 percent allocation would amount to about Rs 157 billion, or roughly Rs 61 billion more.
If phased in over the coming years, this would raise health's share of the national budget by about 60 percent from the current level. Nepal has shown that higher health allocation is possible: during COVID, health's budget share rose to around 7.5 percent, but later fell again. The proposed increase should therefore be treated not as a crisis response, but as a correction of chronic underinvestment in health and built into regular budget planning.
More money will, however, not automatically mean better care. Nepal's challenge is both low allocation and weak execution. The latest health sector review shows health budget utilisation at only 72 percent against the 85 percent milestone. Financial protection remains fragile: out-of-pocket spending accounts for 54.2 percent of total health expenditure, catastrophic health expenditure affects 10.7 percent of households, and only 8.32 percent of poor people are enrolled in health insurance. Available health-financing estimates suggest that about half a million people in Nepal are pushed below the poverty line each year by healthcare expenses.
This exposes a serious contradiction: planned activities remain under-implemented while families continue to face financial hardship from illness. Nepal therefore needs a larger, credible and executable budget. Otherwise, the budget may appear in the Red Book, but not in services patients can use.
The Health Insurance Programme is under strain. Recent reporting indicates that annual outlay exceeds Rs 24 billion, while income is about Rs 14 billion, including around Rs 10 billion in government grants and about Rs 4 billion in premiums. Monthly provider payments reportedly exceed Rs 2 billion.
The proposed budget increase should help finance this gap, but it must not stop there. It should also improve budget execution, timely reimbursement, service readiness, and strategic purchasing, so insurance becomes real financial protection, not another unfunded promise.
The health budget must make essential care available where people need it. Primary healthcare centres and clinics should have medicines, diagnostics, health workers, and referral links. Birthing centres should have skilled staff, oxygen, emergency medicines, newborn resuscitation, and referral transport. District hospitals should have caesarean-section capacity, anaesthesia, blood transfusion, and neonatal care to manage complications.
This is where additional financing should first become visible: in frontline services that can prevent illness, manage basic care, and respond when emergencies arise.
The 8 percent target will matter only if it reduces the concentration of essential services in major urban centres. A credible budget increase should expand services without crowding out the medicines, health workers, blood, oxygen, laboratories, and equipment that make care possible.
The 8 percent commitment should not only finance treatment after illness occurs. It should also invest in prevention, health promotion, early screening, and self-care, which can reduce avoidable hospital visits, protect household income, and make public spending more effective. Nepal already taxes tobacco, alcohol, and sugary products, but these measures should be strengthened and better designed as health-oriented taxes. Additional revenue should be transparently linked to primary care, insurance subsidies, dialysis support, maternal and newborn services, mental health, and essential medicines.
The commitment must include measurable indicators: annual increases in health's budget share, better budget execution, reduced out-of-pocket spending, expanded insurance enrolment, functional primary healthcare centres and clinics, essential medicines, stronger emergency obstetric and newborn care, dialysis access outside major cities, chronic disease protection, and province-wise service mapping.
The promise must appear in the budget book, implementation plan, and public reporting system. It must be tracked not only by allocation, but by what changes for patients.
The health-budget promise must not remain a number. It must become medicines on shelves, insurance that works, emergency care that saves mothers and newborns, dialysis closer to patients, and protection from the financial shock of illness.
On 15 Jestha 2083 B.S. (29 May 2026), the Balen Shah-led government's upcoming budget announcement must answer one question: will Nepal's health-budget promise finally become real care?
Ghale is a former staff member of the WHO Governance team and a global health enthusiast