Bagmati Province Government to Streamline Administration and Reduce Budget Before New Fiscal Year

Hetauda. The Bagmati Province government is set to reform its administrative structure before the budget formulation process begins.

To facilitate budget expenditure and ensure the practical implementation of administrative restructuring, the government plans to reduce the number of ministries and cut staff positions prior to the budget process.

He stated that the government has initiated the administrative restructuring process to finalize the administrative framework before the budget for the upcoming fiscal year 2082/083 is drafted.

He mentioned that the provincial government has initiated this restructuring to ensure public expenditure cuts, manage development budget spending, and provide quality services to citizens along with good governance.

Accordingly, he noted that the high-level steering committee, coordinated by Minister for Agriculture and Livestock Development Madhusudan Paudel, has written to all ministries and thematic committees of the Provincial Assembly to send necessary suggestions within 15 days to finalize the expert committee's report.

According to Minister Tamang, once suggestions are received by 7 Baishakh, the government will make a final decision on restructuring and set ceilings for the ministries for budget allocation.

He stated that the current government led by Chief Minister Indra Bahadur Baniya has proposed reducing the existing 14 ministries to 8 and cutting 701 staff positions to ensure cost reduction and a leaner administration.

Government spokesperson and Minister for Economic Affairs and Planning Prabhat Tamang stated that the budget ceiling for the upcoming fiscal year 082/83 will only be determined after the province's administrative restructuring is finalized. He argued that since the number of ministries and government offices is being revised, the budget limit cannot be set without a final decision. According to Minister Tamang, the government aims to complete the administrative restructuring by 15 Baishakh.

'Offices are currently in the process of restructuring, and this work will conclude by 15 Baishakh. Only then will we send the budget ceiling,' he said. 'By making the administrative structure leaner and cutting unnecessary expenses, the size of the upcoming budget will see some decline. After administrative restructuring, the overall budget may be reduced by about 20 percent. As the number of ministries decreases, administrative costs will drop, making it easier to balance the budget.'

Minister Tamang stated that a policy to completely discourage fragmented projects has been introduced for the upcoming budget. According to the new criteria prepared by the ministry, social sector projects must have a minimum budget of 2 million rupees, and physical infrastructure (roads/bridges) projects must have a minimum of 5 million rupees.

'We are preparing to eliminate fragmented projects and focus investment on large projects that fall within the province's exclusive jurisdiction. The province will not invest in projects that fall under the jurisdiction of the federal and local levels. Preparations are also underway to cut grants previously distributed by lawmakers (forms of the Constituency Development Fund), which have been controversial in the past,' he said.

Minister Tamang mentioned that a new mechanism has been proposed to make the budget formulation process transparent and dispute-free. According to him, projects will be selected through meetings held at the constituency level in the presence of directly elected and proportional representation lawmakers. He stated that since lawmakers will select and send projects from their own constituencies, the influence of middlemen in the budget will be stopped and disputes will be avoided.

• Budget criteria formulation in the final stage

To make the upcoming fiscal year's budget organized and effective, the Ministry of Economic Affairs and Planning is preparing to write to departmental ministries with budget formulation guidelines. Accordingly, the ministry is continuing discussions to finalize the draft of the budget formulation criteria.

According to Minister Tamang, the budget formulation criteria prepared by the ministry are currently being discussed with lawmakers, stakeholders, and experts. Minister Tamang stated that the criteria are in the final stage at the ministry level and will be approved and implemented within the next two to three days.

Minister Tamang said that the criteria will further strengthen the role of the Provincial Policy and Planning Commission in budget formulation. He stated that the expertise and guidance of the commission have been made the main basis for the new budget formulation criteria prepared by the ministry.

According to Minister Tamang, a draft of the procedures and criteria has been prepared with the active participation of the Planning Commission to make the budget organized and result-oriented. He stated that projects coming from outside the policy and method will be filtered through the commission and stopped by the ministry's criteria.

'We have introduced budget criteria specifically to eradicate the influence of middlemen in the budget. The role of the Planning Commission will be stronger this time. It will not be limited to just listing projects but will focus on identifying and selecting projects that provide long-term returns,' he said.

The provincial government is preparing to reduce the size of the budget for the upcoming fiscal year. According to the assessment of the budget resource determination and management committee, the budget for the next year is estimated to decrease by about 17 billion rupees compared to the current fiscal year. Preparations are underway to prepare a budget of around 50 billion rupees for the upcoming fiscal year.

Although the government has set 47 billion rupees as the base size, the budget formulation process is ongoing with the assessment that the budget limit could reach up to 50 billion rupees when some essential and additional projects are included.