Government Proposes Vehicle Loan Interest Subsidies for Permanent School Teachers

The Ministry of Education and Sports has proposed a new scheme to provide interest subsidies on vehicle purchases for permanent school teachers across Nepal. The ministry has incorporated the proposed provision into the Education (Eleventh Amendment) Regulations, 2083, and forwarded it to the Ministry of Finance for the necessary approval.

The proposed amendment seeks to introduce a new Rule 104A after Rule 104, establishing a legal basis for providing teachers with subsidized interest on vehicle purchase loans.

Under the proposed arrangement, the government would cover the interest payable on bank loan installments for up to 80 percent of the total vehicle purchase price. Teachers would be required to arrange the remaining 20 percent themselves. The facility would remain available only during their period of active teaching service.

Vehicle Purchase Limits and Interest Subsidies

The proposed scheme specifies vehicle purchase limits and subsidy arrangements according to teachers' levels and grades.

Four-Wheeler Purchase Facility

- Secondary Level (First Class): Teachers would be eligible to purchase a four-wheeler costing up to Rs 5 million. The government would cover the interest on a bank loan of up to Rs 4 million, representing 80 percent of the purchase price. Teachers would have to arrange the remaining Rs 1 million themselves.

- Secondary Level (Second Class): Teachers would be eligible to purchase a four-wheeler costing up to Rs 4 million. The government would pay the interest on a bank loan of up to Rs 3.2 million, while teachers would be responsible for arranging the remaining Rs 800,000.

Two-Wheeler Purchase Facility (Motorcycles and Scooters)

• Eligible Teachers: Secondary-level third-class teachers, lower secondary-level teachers of all grades, and primary-level teachers of all grades.

• Maximum Purchase Limit: Rs 400,000.

• Interest Subsidy: The government would cover the interest payable on installments of a bank loan of up to Rs 320,000, equivalent to 80 percent of the vehicle's purchase price. Teachers would have to arrange the remaining Rs 80,000 themselves.

More Than 106,000 Permanent Teachers Expected to Benefit

If implemented, the proposed scheme would directly benefit 106,547 permanent teachers across Nepal.

The distribution of eligible teachers by level and grade is as follows:

Estimated Cost and Implementation Process

According to the Ministry of Education's preliminary assessment, implementing the proposed vehicle loan interest subsidy scheme would require an estimated Rs 40.36 billion (Rs 40,360,960,000).

Bir Bahadur Dhami, Joint Spokesperson for the Ministry of Education, said the proposed program has not yet been finalized.

He stated that a separate implementation procedure would be developed to put the scheme into operation.