The Government of Nepal introduced its Child Grant in 2009/10 with the primary objective of supporting
better nutrition for children under five years of age. Like other social security schemes implemented by
the Ministry of Federal Affairs and Local Development (MOFALD) that take a rights-based approach and
promote social inclusion, the vision was to create a nationwide Child Grant that is available to all families
with young children. Due to budget constraints at the time, however, various criteria were applied to limit
coverage of the Child Grant, including family-level quotas and geographic, caste, and poverty-based
targeting, such that it covers approximately 16 per cent of under-fives nationwide.
Currently, the Child Grant reaches around 80 per cent of the intended population and has led to a dramatic
increase in the birth registration rate among recipient households: above 90 per cent compared with a
national average of 58 per cent (VARG & UNICEF, 2015; CBS, 2015). Although the transfer amount is
small, research has shown that recipients use the money as best they can for the well-being of their children.
There is evidence of small but statistically significant increases in dietary diversity, expenditure on
medicines, and access to credit which helps with consumption smoothing (Hagen-Zanker & Mallet, 2016).
The evidence is strong that an increase in the benefit levels combined with improvements to implementation
systems will lead to measurable changes in children’s nutritional status (Bhuvanendra, 2016).
Recognising the potential of the Child Grant to make a real difference to children’s lives and contribute to
Nepal’s development goals, the Government made a commitment in the 2016/17 budget speech to enhance
and expand the programme. To this end, UNICEF Nepal has provided technical assistance to MOFALD to
develop a long-term expansion plan that reflects the principles and strategies of the draft National
Framework for Social Protection.
This report provides the 10-year costing for incremental Child Grant expansion under different scenarios.
The costings are based on proposed expansion strategy scenarios summarised in the policy brief: Reaching
national coverage – An expansion strategy for the Child Grant (Mathers, 2016). Chapter 2 gives an
economic and fiscal overview of Nepal, as well as projections of several economic indicators for the next
five years. Chapters 3 and 4 present the methodology and assumptions of the costing calculator and three
potential expansion scenarios. In Chapter 5, we compare the scenarios and examine the fiscal implications,
and in Chapter 6 provide recommendations.