The plan to raise the age for receiving the elderly allowance back to 70 has been approved by the Council of Ministers

Kathmandu, 23 May: The government has decided to raise the minimum age to receive the elderly allowance.

As per the recommendations of the High-Level Economic Reform Suggestions Commission, the government has approved an action plan to increase the eligibility age for the elderly allowance to 70 and to make a national identity card mandatory for receiving the benefit.

The Cabinet meeting held on Tuesday (Baisakh 6) approved the plan to set the elderly allowance age at 70 within the next year.

The government led by Sher Bahadur Deuba had previously reduced the eligibility age from 70 to 68 in the budget presented on Jestha 15, 2079 BS. Due to this reduction, the Department of Registration stated that the government’s annual liability increased by Rs. 20 billion.

During election times, political parties had made promises to increase the allowance and lower the age limit. On Jestha 15, 2078, then-Finance Minister Bishnu Poudel had raised the elderly allowance to Rs. 4,000.

The High-Level Commission recommended not increasing the elderly allowance for the next five years and maintaining the minimum age at 70. It also suggested increasing the age for Dalits and single women to receive their allowances from 60 to 65.

However, the action plan report does not mention any implementation of increasing the eligibility age for Dalits and single women to 65 or freezing the allowance amount for five years.

Based on the report, the government’s action plan includes not only economic reforms but also institutional, policy, legal, revenue, public institutions, social security, fiscal federalism, cooperatives, capital market, business and investment environment, information and communication technology, physical infrastructure, agriculture, forests, land and mining, education, health, research, and development, among other sectors.

Immediate Actions:

Enhance efficiency and effectiveness of revenue administration (begin immediately and continue).
No loans will be provided to public institutions to pay salaries or other expenses.
After federal allocations are made, provincial and local governments will be reimbursed for actual expenses.
Stop granting licenses for opening new branches of cooperatives.
Make contemporary reforms in foreign study permit (NOC) procedures.

Actions to be Completed Within 6 Months:

Twelve tasks are listed to be completed within 6 months, including:

Conduct awareness programs on anti-money laundering for citizens and civil servants at all three levels.
Remove projects like the Lumbini and Pashupati Development Funds from the list of national pride projects.
Direct investments from public funds (Employees Provident Fund, Citizens Investment Trust, and Social Security Fund) to high-return projects.
Reduce the interest rate spread between loans and deposits to improve banking system cost-efficiency and financial stability.
Provide legal framework for issuing long-term debt instruments for productive industries and large infrastructure projects.
Reduce fund management, registration, and issuance fees for private equity and venture capital by 50%.
Develop an integrated information system for one-stop registration and regulation of firms, businesses, and industries.
Set national standards for emergency housing for disaster-affected families.
Establish a National Research and Development Council led by the National Planning Commission.
Allocate necessary budgets for implementing the Land Use Act, 2076, and enhance implementation capacity of the three government levels.

Actions to be Completed Within 1 Year:

A total of 71 tasks are to be completed within 1 year, including:

Keep interbank interest rates close to policy rates and gradually narrow the interest rate corridor.
Ensure deposit interest rates are positive and loan interest rates remain in low double or high single digits.
Develop a bond market.
Provide alternative financing for easier access to low-interest financial resources.
Enforce a policy where interest rates for productive loans are at least 1% lower than those for consumer loans.
Establish integrated credit information across all banks, financial institutions, and cooperatives.
Enable insurance companies to issue infrastructure bonds.
Make home insurance mandatory to obtain construction completion certificates in urban areas.
Facilitate secondary market transactions for government bonds.
Restructure the Securities Board of Nepal.
Automate tax payment data sharing between the Office of the Company Registrar and the Inland Revenue Department.
Implement a policy where at least 60% of credit is directed toward productive sectors.
Repeal and replace the Export and Import (Control) Act, 2013, and the Drugs Act, 2035.
Merge the Immovable Property Acquisition Act, 2013, and the Land Acquisition Act, 2034, into a new Private Property Acquisition Act.
Merge the Patent, Design, and Trademark Act, 2022, and the Copyright Act, 2059, into a new Intellectual Property Rights Protection Act.
Set the elderly allowance age at 70 and make a national ID mandatory.
Restructure administration according to the federal system.
Bring spending of provincial and local governments under a single treasury account.
Base internal debt ceilings on net debt after subtracting repayments.
Legally clarify division of responsibilities among the three levels of government.
Transfer implementable responsibilities to provincial and local levels, cut federal staff accordingly, and reduce current expenditures.
Amend the Nepal Rastra Bank Act, 2058, the Bank and Financial Institutions Act, 2073, the Deposit and Credit Guarantee Act, 2073, and the Remittance Regulation, 2067.
Amend the National Natural Resources and Fiscal Commission Act, 2074, to define royalty sharing mechanisms.
Use state ID cards to provide access to fertilizer, seeds, loans, and other benefits.
Implement land bank mechanisms under the Land Act to utilize fallow agricultural land.
Amend environmental laws and processes to tailor impact assessment formats to the project type.
Streamline environmental impact assessment approvals by removing redundant steps and adopting a single process.
Update non-tax revenue rates and increase government income from royalties, fees, divestments, and dividends.
Convert public institutions into public limited companies, sell shares to the public, and issue bonds for capital mobilization.
Exempt citizens with income below a set threshold from health insurance premiums and social security tax; those above must pay both.
Enforce referral systems from local to provincial to federal hospitals.
Review wage rates based on inflation.
Improve accessibility and digital friendliness of public services.
Strengthen the cooperative department’s capacity to manage unified data on cooperatives.
Build local governments’ capacity to supervise and regulate cooperatives.
Ensure adequate staffing in the problem-solving committee for troubled cooperatives.
Prohibit cooperatives from enrolling companies or organizations as members; only natural persons allowed.
Set legal limits on single-loan exposure for savings and credit cooperatives.
Prohibit cooperatives from purchasing land for purposes other than their own use.
Allow cooperatives to offer housing loans for land up to 1,000 square meters to members without homes.
Cap sectoral loan concentration at 25% and enforce credit-to-deposit ratio limits for cooperatives.
Operate climate funds under the Specialized Investment Fund Regulation, 2075.
Introduce an LLP (Limited Liability Partnership) Act.
Improve pricing policies to eliminate unfair competition and protect consumers.
Remove mandatory business renewal requirements.
Reform laws to allow Nepali individuals and organizations to invest abroad.
Implement remote work policies (including tax, registration, and work for foreign companies).
Introduce policies for digital nomads (visa, banking, tax, driving licenses).
Issue quality standards for agri/forestry/livestock imports and licenses.
Restrict agricultural imports to major customs points with labs.
Enforce real estate licensing requirements per Land Revenue Act.
Complete existing road projects before starting new ones.
Revise criteria for national pride projects.
Set minimum plot sizes and prohibit land fragmentation, with special provisions for inheritance.
Regulate real estate through registration agencies to control prices and transactions.
Facilitate housing access for middle-income groups via cooperative housing policies.
Revise the National Housing Policy, 2068, for homeless and landless people.
Allow foreign investors who invest or deposit over $200,000 in Nepal to buy a home or flat under conditions.
Draft a new National Building Policy and amend laws to promote both traditional and modern construction practices.
Amend urban planning standards to ensure multi-use public spaces.
Link urban development plans with construction permits.