New Rules for Consumer Committee Projects

The Government of Nepal has decided that projects costing more than 10 million Nepalese Rupees cannot be executed through consumer committees. This new rule applies to projects operated by provincial or local levels through financial transfers. The Ministry of Finance stated that this step has been taken to better prioritize projects and manage capital expenditure. Furthermore, it will not be permitted to split large projects into smaller parts to assign them to consumer committees.

Changes in Contingency Funds for Construction

The government has also reduced the limit for contingency funds used in construction work. For projects with a cost estimate of up to 1 billion rupees, a maximum of 3 percent can now be used for contingencies. For projects costing more than 1 billion rupees, the contingency fund is limited to 2 percent.

Other Key Decisions on Budget Management

Several other important decisions have been made for managing capital spending and project priorities. Ongoing projects that have already received funding approval will be continued to ensure there is no budget shortfall. However, budgets allocated for new, unprepared, duplicate, or less important small projects will be put on hold. Funds assigned to areas outside the main objectives or to low-priority sectors will also be frozen. The budget set aside for activities with unclear utility or for miscellaneous expenses will be stopped.

Budget Adjustments and Procurement

For budget sub-headings where payments are still due from liabilities created in the previous financial year, the freeze will be lifted based on a request from the relevant ministry. If nationally prioritized projects face a budget shortage, funds can be transferred from frozen allocations to manage the expenditure. The freeze will be lifted for projects where a purchase agreement was signed by Ashoj 2, 2082, or where the procurement process is in its final stage, after confirmation by the Finance Ministry. Procurement processes for basic sector projects and programs in areas like education, health, and drinking water will proceed with the consent of the Finance Ministry. No multi-year funding approvals will be given for any new projects this financial year. When reconstructing government structures, the aim will be to create user-friendly, open, and efficient structures.