Budget holiday in Sudurpaschim: Legal issues affect new draft

Dhangadhi, August 16: The unveiling of the new budget for Sudurpaschim Province has encountered legal complications. The budget allocation bill presented by the previous government on June 15 failed to pass in the province assembly, creating issues for the new government’s budget preparations.

The outgoing government, led by Chief Minister Dirgha Sodari, submitted the Appropriation Bill on June 15. However, due to subsequent political changes, the budget was not approved, leading to a ‘budget holiday’.

Now, the newly formed government under Chief Minister Kamal Bahadur Shah is facing challenges in drafting the new budget. According to the Inter-Governmental Finance Management Act 2074, the provincial finance minister must present the revenue and expenditure estimates for the next fiscal year to the Provincial Assembly by the mid-week of June. Additionally, the proposed budget must be entered into the Provincial Ministry Budget Information System (PLMBIS) by first week of July.

There are complications with accessing the PLMBIS, which closes after a certain period.

The provincial government must act quickly to address the budget vacuum. Experts suggest two options: amending the law to create a new budget or revising the existing budget through a replacement bill.

Dr. Rajendra Bir Chand, an economist, outlines these options. The first involves amending the Inter-Governmental Finance Management Act to create a new budget, which could introduce additional legal complexities. The second option is to revise the old budget, which would involve updating the previous administration's plans with new ones, and is considered a simpler approach with fewer legal issues.

There is currently no consensus among the main political parties on whether to withdraw the June 15 Appropriation Bill and start anew or introduce a replacement bill for a revised budget. CPN-UML parliamentary leader Rajendra Singh Rawal supports withdrawing the old bill and creating a new budget, while Congress leader and Minister of State for Economic Affairs Prakash Bam advocates for a revised budget through a replacement bill.

The size of the upcoming budget is expected to be reduced. While equalization grants, special grants, conditional grants, and supplementary grants will remain unchanged, the overall budget size will likely decrease due to last year’s expenditures. The previous budget was 31.06 billion NPR, but sources suggest the new budget may be around 29.27 billion NPR.