Kathmandu, May 10 -- The government, currently preparing its policy and programmes for fiscal year 2026-27, which is viewed as the base year for Nepal's long-term ambition to build a $100 billion economy, faces the challenge of restoring the private sector's confidence and creating conditions for greater investment.

The private sector, which typically accounts for up to 25 percent of total investment in the economy, saw its share fall to 19 percent last year. The decline significantly affected revenue collection, leaving the government increasingly dependent on public borrowing even to finance routine expenditures.

The private sector had already been weakened by the Covid-19 pandemic and the government's subsequent demand-suppression po...