Madhesh Province Faces Financial Crisis Amid Revenue Shortfall

Janakpurdham. The Madhesh Province government has reported a significant shortfall in revenue collection compared to its targets for the current fiscal year. The Ministry of Finance stated that this deficit is hindering project implementation and creating a looming financial crisis.

During a press conference held in Janakpurdham today, Provincial Finance Minister Mahesh Yadav revealed that while the province projected a revenue of Rs 10.38 billion, only Rs 4.25 billion has been collected so far. He noted that revenue across other sectors has also remained alarmingly low.

Minister Yadav highlighted that despite the current fiscal year's budget being the largest to date, the revenue base is insufficient. "The budget size for the current fiscal year is Rs 46.98 billion, but we do not expect to receive more than Rs 30 billion," the statement read. With a projected deficit of Rs 17 billion, the Minister warned that the province is unable to implement all approved development projects and is heading toward a financial crisis.

To mitigate the impact of low revenue, the provincial government has decided to cut administrative expenses, halt the purchase of luxury goods, and stop small-scale fragmented projects. The statement further noted that, with the exception of completed projects with pending payments, ongoing multi-year projects, maintenance works, and disaster management initiatives, all projects valued under Rs 1 million have been suspended.

The provincial government's capital expenditure currently stands at eight percent, while recurrent expenditure is at 24 percent. Minister Yadav emphasized that attempting to implement all approved activities would leave the government unable to meet its financial obligations, pushing the province into a deeper fiscal crisis.

It was also noted that Madhesh Province has lagged behind the other six provinces in performance evaluations conducted by the federal government and is receiving comparatively lower financial allocations.

Furthermore, the Minister demanded the removal of discriminatory policies regarding the distribution of fiscal equalization grants, which he claims are unfair to Madhesh Province. In response to a journalist's query, it was clarified that the provincial government maintains a policy of awarding development projects worth over Rs 2.5 million through a competitive tender process.

On this occasion, Secretary of the Ministry of Finance, Ramkumar Mahato, clarified that there has been no misuse of the budget by the Ministry.