Builders are being paid four billion dollars in arrears by the government.

The government has begun to prioritize construction workers' debt payments.

At the start of the current fiscal year 2081–082, it has already spent four billion and two hundred million rupees. In the previous fiscal year, only 22 crores had been spent at this point. The government has begun paying the builders' dues in accordance with the budget parameters created for the execution of the current year's budget.

Builders have been requesting payment of past due amounts for the past year. The government has set up to prioritize payments based on the approved program budget from the previous year, in accordance with the new budget guidelines. It is anticipated that this will relieve the builders of their outstanding debt.

Payments for roads, bridges, irrigation, water supply, sanitation, and other public works projects can be made from the allotted funds in any quarter after the duty has been confirmed, as per point 50 of the current year's budget advice.

This implies that in the event that a project's budget is allotted for the current year but the previous work is still unpaid, the previous arrears will be settled before the current year's work is prioritized. As a result, higher capital spending is anticipated in the current year's first quarter. Experts in construction claim that there are approximately 20 billion rupees in arrears for the most recent fiscal year.

The Ministry of Physical Infrastructure and Transport's spokeswoman, Sushil Babu Dhakal, stated that previous payments had been prioritized in accordance with the budgetary standards.

Through budget guidelines, the government has made the settlement of past due amounts a priority. It is anticipated that this will lessen the issues faced by construction workers. Dhakal stated, "We have been making payments for the past due amounts since the first month."

The builders are upbeat even though the arrears payment process began in the first month.

The first month itself saw the government begin to pay the previous arrears. The 87 crore arrears from last year have been reduced by 300.9 million rupees, according to Ramesh Sharma, the former Federation of Builders president. "The builders are relieved by this action, but if there are significant arrears, the issue won't be resolved until all money is received. Prioritizing all payments should be the government's goal.

He claimed that the government has caused the building industry to have many issues in the past, but that attempts are currently being made to find a solution.

We accepted the project under the guidelines that the government had established. However, a shortage of funding hindered our job. The construction industry will have hope as previous projects and payments are now given priority, according to Sharma.

Building industry professionals now have hope because Prime Minister KP Sharma Oli has pledged to prioritize ongoing projects above new ones. It is thought that the prime minister's care will help to solve the issues facing the building industry.

It is hoped that the complaints and issues faced by construction experts will improve with the Prime Minister's promise. In contrast, the Nepal Rastra Bank has implemented a number of monetary policy initiatives aimed at alleviating the construction sector's problems. The industry was facing serious financial difficulties as a result of restricted banking facilities, rising numbers of blacklisted businessmen, and delays in government payments. But the builders have shown fresh zeal with the announcement of the monetary policies for this year.

In order to relieve the backlog in the building industry and address company owners' concerns, the monetary policy has implemented a number of concessions:

Extension of the loan principal interest payment period: Builders now have until the end of November 2081 to pay the principal interest on their loans. This will lessen the financial burden experienced by businessmen by extending the time they have to return their debts.

Non-blacklisting: Only checks with dishonor are eligible for non-blacklisting. This will enhance the reputation and banking relationships of several businessmen and keep them off of blacklists.

Limit of credit rating: By making a distinct judgment about the credit rating cap for loans and banking services, businesses will be able to receive more assistance from financial organizations.

Credit classification and loss arrangement: In accordance with monetary policy, loans created after the guarantee is claimed shall retain their classification and loss arrangement in the same manner as other loans. This will guarantee equity and transparency in the way loans to entrepreneurs are managed.

Impact of blacklisting on joint ventures: It has been agreed that the banking activities of other partners will not be impacted, even in the event that one partner is placed on a blacklist. It is anticipated that this will provide stability and continuity to the joint venture's businessmen's operations.

Guarantee renewal: Should the government decide to extend the building time, banks and other financial institutions may also choose to renew their guarantees. The businessman will benefit from this as he continues the construction project.

All things considered, these agreements will give companies greater chances for growth and stability in their finances.

It is anticipated that this will boost economic growth and revitalize the construction industry. Experts have countered that it is inappropriate to provide relief through monetary policy because the budgetary issue pertaining to building should be handled through budget policy.

They claim that this will instill in businessmen the habit of delaying payments in the future and could have an impact on the standard of banking.

The building industry is affected by the government's declining investment. The private sector's involvement in building infrastructure has also decreased, which has affected the economy as a whole.

Additionally, the National Statistical Office predicted that the construction industry grew at a negative pace in the previous year. The construction industry is predicted to grow at a negative rate of 2.07 percent, despite the fact that the total economic growth rate was 3.87 percent last year. This effect was observed since the government was cutting capital spending and other construction operations were slowing down, according to Kalpana Khanal, Chief Economist at the Policy Research Institute's Center for Economic and Infrastructure Development Policy Studies.

During 2078–2079, the construction industry grew at a rate of about 7% annually. However, this sector's growth rate was negative by 1.1 percent in the fiscal year 2079–2080. Despite the negative percentage growth rate, the overall construction sector's production did not decline during the fiscal year 2079–2080.

But there was a drop in production last year. In response, vice president of the Confederation of Nepal Industries and building expert Birendra Pandey says there are three key causes for the current slowdown in construction activity. According to him, the government is not launching new industries, cutting back on capital expenditures, and delaying expense payments. This industry has likewise felt the effects of the real estate industry slowdown.

The government has not provided as much money in recent years, and what has been allocated has not been spent as planned. An projected 4 trillion 51 billion rupees would be used to purchase construction-related intermediate goods last year, such as cement, sand, stone, gravel, etc., and 7 trillion 24 billion rupees worth of building products (infrastructure) will be produced.

That is, the value added in this industry is predicted to reach 2 trillion 73 billion. Using an intermediate product of 4 trillion 55 billion, 7 trillion 33 billion was created in the fiscal year 2079–2080.

The National Statistics Office's Deputy Chief Statistics Officer, Hemraj Regmi, states that maintaining the same growth rate is currently difficult because of the large rise in construction output following the earthquake.