Lumbini Province Begins Preparations for Upcoming Fiscal Year Budget Amidst Revenue Shortfalls

Butwal. The Lumbini Province government has started preparations for the budget for the upcoming fiscal year (2083/084). The Province's Ministry of Finance and Planning has stated that the budget preparation process is moving forward. 

In accordance with the province's financial procedures, the preliminary revenue projection has been submitted to the Federal Ministry of Finance and the Finance Commission. 

The Province's Revenue Consultation Committee has formed three subcommittees to begin work related to budget preparation. Spokesperson and Senior Section Officer Suman Paudel of the Ministry of Finance and Planning told Ratopati that separate subcommittees comprising representatives from the Forest, Transport, and Agriculture ministries have been formed and are working. 

The subcommittee under the Transport Ministry is preparing a report focusing on revenue from provincial vehicles and transport to determine sources for the next fiscal year. It is reported that the subcommittee under the Forest Ministry is focusing on revenue generated from forests and rivers, while the subcommittee under the Agriculture Ministry is preparing a report concerning revenue sources from agriculture and real estate. 

The Ministry stated that the process of collecting suggestions has been initiated with the objective of making the revenue system more effective, transparent, and accountable. 

The Ministry published a notice inviting suggestions regarding overall revenue administration reforms while drafting the Economic Act for the upcoming fiscal year for the Lumbini Province Government. The Revenue Consultation Committee has urged the private sector, government agencies, subject matter experts, civil society, and all concerned parties to submit their suggestions by Chaitra 30. 

Ministry Spokesperson Suman Paudel stated that suggestions received on issues such as tax system reform, expansion of the tax base, control of revenue leakage, and simplification of service delivery will be incorporated into the upcoming Economic Act. He informed that the Federal Ministry of Finance will send the ceiling to the province within a few days, after which the Province's Ministry of Finance and Planning will send the ceiling accordingly to other ministries of the provincial government. 

Lumbini Province Government Spokesperson and Minister Dinesh Panthi mentioned that budget preparation work is proceeding regularly and informed that the provincial government is making internal preparations to bring a realistic budget. He stated that a strategy has been formulated to expand the scope of revenue collection and make expenditure management effective. 

Minister Panthi informed that the government is preparing to bring a balanced budget through the appropriate mobilization of grants received from the federal government and internal resources. 

He stated that the provincial government has adopted a policy of reviewing the programs of the current fiscal year, continuing successful programs, and modifying ineffective ones. 

Possibility of budget ceiling reduction in provincial ministries 

The Ministry of Finance and Planning of Lumbini Province has announced that the budget for this time will be prepared prioritizing production-oriented sectors, job creation, agricultural modernization, tourism promotion, and infrastructure development. 

The Ministry stated that the goal is also to strengthen education, health, and information technology sectors. The Ministry clarified that the provincial government is preparing to bring an inclusive and realistic budget after consulting with local levels and stakeholders. 

The internal revenue collection rate of Lumbini Province has not met expectations in the last three fiscal years. On the other hand, in the current fiscal year, the province had presented a budget that was reduced by 20% in many titles, excluding some projects. The provincial ministries are currently working on the reduced budget accordingly. 

Ministry Spokesperson Paudel stated that there is a possibility of giving a reduced ceiling to the ministries compared to the current fiscal year. He clarified that preparations are underway to reduce the ministry ceilings because the province's internal revenue growth has not met expectations, and some ministries are developing a habit of deferring payments to the next year after stopping payments. He stated that the provincial ministries will be given a budget ceiling reduced compared to the current fiscal year to bring a substantive budget now. 

Homraj Bhusal, Chairman of the Lumbini Economic Research Center, commented that the government's implementation has been weak because the current budget expenditure was reduced from what was initially allocated. He stated that ministries should be given budget ceilings based on needs-based plans and ensuring resources to complete those plans. 

Bhusal suggested allocating budgets for projects that can be completed after ensuring resources, noting that in many cases, project quality can suffer due to having too many projects in a single provincial office, a shortage of skilled staff, etc. 

• Status of Budget Implementation in the Current Fiscal Year

The budget implementation status of the Lumbini Province Government appears weak in the current fiscal year. The Lumbini Province Government has spent only 27% of the total allocated budget in the first eight months of the current fiscal year. During this period, capital expenditure was 25.40% and current expenditure was 31.01%. 

According to the Provincial Auditor General's Office, Lumbini Province allocated a budget of NPR 38.91 billion for the current fiscal year, of which only NPR 10.7501 billion was spent by the end of Falgun. 

Of the capital budget allocated at NPR 23.471465 billion for the current fiscal year, NPR 5.962919503 billion was spent by the end of Falgun. 

Similarly, of the current budget of NPR 15.430535 billion, NPR 4.07725363678 billion was spent.