The Prime Minister Employment Program (PMEP), introduced during KP Sharma Oli’s previous tenure as the prime minister, is under scrutiny for failing to meet its intended goals. The program’s budget is expected to decline in the upcoming fiscal year.

In the current fiscal year, the World Bank provided a loan of Rs 4.5 billion, while the government allocated Rs 2.4 billion to the program. Although the World Bank loan will expire in Fiscal Year 2025/26, severe resource constraints have left the Ministry of Finance unable to allocate additional funding, according to officials familiar with the matter.

"Next year, the budget for the Prime Minister Employment Program will be reduced from the current level. One reason is the cessation of assistance from donor agencies; another is growing concerns over the program's effectiveness," said a senior official at the Ministry of Finance.

Officials at the Secretariat of the Prime Minister Employment Program have acknowledged that budget shortages are hampering operations. Danduraj Ghimire, National Program Director at the Secretariat, stated that fewer employment opportunities are being created this year due to budget crunch.

"Although many people have registered, we have set a target of providing employment to up to 60,000 individuals based on this year's budget. Not all registered applicants will receive jobs. As the World Bank’s support ends next year and the budget shrinks further, employment creation will also be affected," he said.

According to the Secretariat, around 800,000 people applied for jobs this year, but so far, only 7,600 have been employed. Despite the high number of applicants, the program has provided jobs to only a small fraction, raising questions about its necessity and effectiveness.

This year, 743 local governments compiled lists of unemployed individuals. The government took a loan from the World Bank to support the Prime Minister Employment Program. The program has been operating with World Bank assistance since Fiscal Year 2018/19. The World Bank pledged USD 120 million (equivalent to Rs 16.11 billion at the current exchange rate) for the project. However, the government failed to utilize the full amount within the original four-year period and requested a one-year extension last year.

The World Bank has agreed to release Rs 4 billion for the Youth Employment Transformation Initiative under the program, although the deadline for implementing the initiative expired last June. As the project nears completion, a significant portion of the budget remains unspent and is expected to be frozen. Officials noted that although the World Bank approved extending the project until July 15, 2025, the budget utilization rate remains low.

The government launched the Prime Minister's Employment Program to provide essential employment services and assistance to the unemployed; to promote internal employment by developing skilled human resources; to create new job opportunities through coordination with the private sector, cooperatives, and non-governmental organizations; to strengthen policies and structures for employment creation; to contribute to public infrastructure development; and to identify new employment areas through research and studies. Although restructuring the program was announced in the current budget, no concrete action has been taken yet.

Persistent concerns over the program’s effectiveness have added pressure on the government to restructure it. "The program has mainly engaged in activities such as cleaning roads and drains, building school playgrounds, constructing paths and off-road trails, and promoting sanitation," the latest report from the Auditor General’s Office states. "The performance of the program, which operates with foreign loans, has not been effective." The report also recommends introducing cost-sharing arrangements with local governments to improve sustainability and local ownership — a suggestion the government has largely ignored.