Madhesh Province Faces Financial Crisis Amidst 30 Billion Rupee Liability

Janakpurdham. Madhesh Province Finance Minister Mahesh Prasad Yadav has stated that the provincial government is burdened with a liability of approximately 30 billion rupees due to the federal government's failure to provide resources on time.

Providing information on the implementation of the budget for the current fiscal year (2082/083), the status of revenue collection, and various policy issues related to the federal structure, he noted that the province's financial situation is becoming increasingly challenging.

According to Minister Yadav, although the budget size has increased in the current fiscal year, revenue collection has not met expectations. He mentioned that while expenditure was 9.87 percent by the end of Falgun last year, it has reached 11.63 percent this year, indicating that the overall financial situation is not robust.

Finance Minister Yadav informed through a press conference that there has been a significant decline in the province's cash reserves. Stating that only 4.25 billion rupees remain against the estimated 10.38 billion rupees, he warned that weak revenue collection poses a risk of a budget deficit of nearly 17 billion rupees.

Warning that the imbalance between income and expenditure could push the provincial government toward a financial crisis, he announced that policies such as cutting administrative expenses, banning unnecessary purchases, and suspending small projects have been adopted due to weak revenue collection.

Minister Yadav clarified that projects costing less than 1 million rupees have been halted for the time being, while priority is being given to incomplete, ongoing, maintenance, and disaster management projects.

Mentioning that the 'unallocated' system has been abolished to make budget distribution to local levels more transparent, he informed that from the next fiscal year, financial transfers will be based on methods and criteria rather than access.

At the press conference, Minister Yadav expressed dissatisfaction with some federal government policies, stating that indicators used in the province's performance evaluation, such as air quality and forest area expansion, are unfair to Madhesh.

Similarly, accusing the current formula for distributing fiscal equalization grants of discriminating against Madhesh, he expressed the view that amendments are necessary.

He expressed concern that road, bridge, irrigation, and drinking water projects transferred by the federal government in the past have been left in limbo due to a lack of resources. He stated that the failure of the federal government to provide funds as committed for projects started under supplementary and special grants has added a liability of approximately 30 billion rupees to the province.

He has also demanded that at least 10 percent of the customs revenue collected within the province should be made available to Madhesh Province.