The girl called Kumari is considerd holy and is an attraction for the many tourists who visit the Himalayan nation every year.
"The government has increased the monthly allowance of Kumari from 6,000 rupees ($80) to 7,500 rupees," said Mod Raj Dotel, the top bureaucrat at the culture ministry which also oversees religious affairs.
"The increase is meant to help her lead an easy life," Dotel added. The government would also bear the expenses of her education, he said.
Political turmoil in Nepal has kept the impoverished economy on a low growth path. Nearly one-fourth of Nepalis live on a daily income of less than a dollar, and have to grapple with crippling electricity shortages and high inflation.
The girl chosen to play the divine role must pass a rigorous religious process must hail from a Buddhist Shakya family.
She then moves away from the family home and lives in a 15th century temple in Kathmandu's Basantapur area, noted for its ancient shrines, until retirement, which usually takes place at the onset of puberty.
Critics of the centuries-old Kumari tradition say the girl is denied basic human rights as she cannot lead a normal life during the time she serves as the "goddess".
In 2008, Nepal's Supreme Court ordered the government to safeguard Kumari's rights and ensure her health care and education.
Majority-Hindu Nepal became a secular nation in 2006 in a deal with the former Maoist rebels who ended their decade-long civil war.
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