Financing for equity in pre-primary education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students and families
4. Social policies and family support programmes
Introduction
Key financing indicators (UIS Data)
The official entrance age to pre-primary education is three. One year of free pre-primary education is granted in legal frameworks. One year of compulsory pre-primary education has been granted in legal frameworks since 2015. The net enrolment rate for pre-primary for both sexes was 60.56 in 2025.
Governance
Pre-primary education is provided under the umbrella of Early Childhood Education and Development (ECED) services in Nepal, and may be delivered through school-based, community-based, or private facilities. The Ministry of Education, Science and Technology (MoEST) leads policy, planning, and overall budgeting for Early Childhood Education and Development.
Tuition-free status
One year of free pre-primary education is granted in legal frameworks.
1. Education resources to subnational governments
Conditional Grants
Federal conditional grants, administered through the 2022–32 School Education Sector Plan (SESP), are the principal instrument through which the government finances school education at the local level. The SESP budget is structured around broad cost components and specific programme orientations. Staff salaries account for the largest share, approximately 69% of total SESP expenditure, with the remaining resources distributed across capital investments (11%), operational expenses (11%), and social programming (9%). Among non-staff expenditures, access-related initiatives receive the largest allocation at 44%, equity and quality improvements each receive approximately 24–25%, and efficiency measures account for 7%, reflecting the distribution of targeted resources within the plan.
Equity Index
In 2017, under the Consolidated Equity Strategy for the School Education Sector, the Government of Nepal piloted the “Equity Index” to identify disparities in educational outcomes, access, and participation, and to allocate resources based on identified needs. The Index generates an “equity score” using the Human Opportunity Index (HOI) formula: Equity Index = C × (1 − D), where C represents coverage, or the average level of access, and D is a dissimilarity index measuring inequality of opportunity. The index uses data on gender, geography, socio-economic status, ethnicity, caste, and disability to assess educational inequities. According to the School Education Sector Plan Budget Review, in the 2023-24 academic year, extra resources were allocated to the 80 Local Governments with the lowest scores, based on out-of-school rates and the equity index.
Fiscal Equalisation Grants
Fiscal equalisation grants form the principal mechanism through which the government distributes funding to local levels in Nepal. Their allocation is determined using four weighted indicators: fiscal gap (60%), human poverty index (15%), social and economic discrimination (15%), and infrastructure availability (10%). As these grants are not specifically earmarked for education, local governments dedicate only a small proportion to the education sector. The 2022–32 School Education Sector Plan sets a policy objective to increase the proportion of equalisation grants allocated to local governments while reducing reliance on conditional grants.
Supplementary and Special Grants
Local governments may also receive education-specific supplementary and special project grants. Allocation of these funds varies, and although 63% of local government revenue is unconditional, many local authorities restrict education spending to the amount received through federal conditional grants.
2. Education resources to institutions
Government funding for ECED includes subsidies to school-based pre-primary classes and community-based ECED centres, mainly for facilitator salaries, teachingand learning materials, and infrastructure costs. One year of ECED is included in the basic education system and is funded through the regular school education budget and intergovernmental grants. Children aged 4-5 in public ECED classes do not pay fees.
Federal grants administered through the 2022–32 School Education Sector Plan (SESP) and the Consolidated Equity Strategy for the School Education Sector's Equity Index provide a framework to allocate additional schoolsector resources to disadvantaged local governments, which can be used to strengthen ECED provision in underserved areas and for children with disabilities or from lowincome households.
3. Education resources to students and families
The Ministry of Education, Science, and Technology does not have dedicated household-level subsidies, vouchers, or tax relief schemes that specifically provide families with direct support for accessing ECED. MoEST support focuses instead on providing free ECED. One year of pre-primary education is provided free of charge in public schools for children aged 4-5, with the government funding facilitator salaries and basic operating costs.
4. Social policies and family support programmes
The Child Grant Programme, introduced in 2009, is an unconditional cash transfer initiative targeting children under five years of age, particularly those in the remote Karnali region and from the marginalised Dalit community. Eligible families receive NPR 1,600 (approximately USD 14) every four months to support basic needs. The programme has led to increased birth registration rates and improved access to essentials such as food and clothing.
This profile was reviewed by Kedar Prasad Acharya, PhD, Director, University Grants Commission, Nepal.
