At a time when unemployment in Nepal has excerberated as a result of sharp increase in the number of Nepalis losing jobs inside and outside the country due to the Covid-19 pandemic, the government has announced new programmes in the Federal Budget for FY2020/21 to create 800,000 jobs. Presenting the budget in the House of Representatives, Finance Minister Dr Yuba Raj Khatiwada said that the creation of new jobs has been prioritised in the budget for the upcoming fiscal year estimating that one million Nepalis will lose their jobs within the country while 500,000 will become jobless abroad. Dr Khatiwada mentioned that the programmes in the new budget aim to provide employment opportunities to all Nepalis through dignified jobs, social security and ideal labour relations to increase the labour productivity in the country.

It is estimated that 500,000 Nepalis enter job market every year. The government has predicted that out of 4.79 million people currently in foreign employment, the pandemic-induced crisis has forced about 1.5 million to return to the country. This situation has posed a huge challenge for the government which has so far struggled to generate enough for Nepalis youths.

The Prime Minister Employment Programme (PMEP) will be the biggest government undertaking in employment creation which aims to generate 200,000 jobs.  PMEP, which has been implemented in all three levels of the government, will ensure 100-day employment. The budget allocation for the programme for the upcoming fiscal year has been increased to Rs 11.60 billion from Rs 5 billion in the current fiscal year. Similarly, Rs 1 billion has been allocated to conduct handicraft, plumbing, electronics, cook, mansion, tailoring, beautician, barber trainings on federal and central levels to generate 50,000 jobs. Meanwhile, Rs 4.34 billion has been allocated to provide technical trainings to 75,000 individuals.

The budget has aimed to generate 40,000 jobs through Small Farmers Credit Programme and 12,000 jobs through Self-employment Loan Programme. Meanwhile, the government has targeted to create 127,000 through micro entrepreneurship programme and an additional 30,000 jobs through programmes based on utilisation of forest resources. “32,000 instituions promoted by the Poverty Allevation Fund will transformed into cooperatives to create 150,000 jobs,” Finance Minister Dr Khatiwada said.

In his budget speech, the finance minister said that local units will run infrastructure development and social programmes and ‘food for work’ programme targeting people from poor families. Similarly, those who have lost their jobs in the country and foreign returnees will be employed in labour-intensive development works. The government has announced to further tighten to employ foreign workers without obtaining labour permits. Presently, there is an arrangement in this regard, but hundreds of thousands of foreign workers, particularly from India, are working in Nepal without such permits due to lax regulation and monitoring. Economists say that this situation offers big opportunities to Nepal to replace foreign workforce in the country with Nepali workers. Dr Shankar Sharma, former vice chairman of National Planning Commission (NPC) thinks that this will help to enhance skills of Nepali workers which would ultimately make a big difference.