Lumbini Province Prepares Smaller Budget for Fiscal Year 2081/082

Butwal. The Lumbini Province government is internally preparing to introduce a smaller budget for the upcoming fiscal year 2081/082 compared to the current fiscal year. The Ministry of Economic Affairs and Planning has initiated the budget formulation process and has collected budget ceilings from provincial ministries that are lower than those of the current fiscal year.

Dhanishwor Aryal, Deputy Secretary and spokesperson for the Ministry of Economic Affairs and Planning, told Ratopati that while the Lumbini Province allocated a budget of 38.91 billion rupees for the current fiscal year, preparations are underway to bring a budget of around 35 billion rupees for the next fiscal year.

He stated, 'It will certainly be less than the current fiscal year; we are working on bringing it to around 35 billion.' The government believes the main reason for the budget reduction is the failure to collect internal revenue as expected.

Ministries submitted their ceilings by the end of Chaitra. These ceilings focus on mandatory obligations, committed expenditures, and multi-year project liabilities. Spokesperson Aryal revealed that work is being done with the plan to allocate budgets for new projects only from the remaining funds.

Plan with a Goal to Increase Internal Revenue

Government spokesperson and Minister of Agriculture, Dinesh Panthi, stated that the provincial government is preparing the budget to ensure that internal revenue collection for the upcoming fiscal year does not remain as weak as it was in the current fiscal year.

Noting that only about 1.5 billion rupees were collected against a target of 4.88 billion rupees for internal revenue in the current fiscal year, he mentioned that a committee has been formed to continue some positive aspects of revenue collection and to improve others.

It appears that the province has earned the most revenue from the transport and forestry sectors, while some internal headings have seen very low collection percentages. Minister Panthi stated that the provincial government is currently working on budget formulation through three sub-committees under the Provincial Revenue Advisory Committee.

Work is being carried out by forming separate sub-committees led by division heads of the Ministry of Industry, Tourism, Forest, and Agriculture. Minister Panthi said that preparations are underway to introduce the Financial Act based on the suggestions received from these committees.

He said, 'We have held formal and informal discussions on policies and programs. We are focused on how to improve past revenue collection efforts, both the successful ones and the incomplete ones.'

The sub-committee under the Ministry of Industry, Tourism, and Transport is preparing a report on determining sources for the next fiscal year, focusing on vehicle and transport revenue. The coordinator of the committee, Deputy Secretary Krishnadev Arya, said that report preparation and writing are currently underway. According to him, the report aims to identify new revenue scopes for the Ministry of Industry, Tourism, and Transport and to revise existing tax rates.

It is reported that the sub-committee under the Ministry of Forests is focusing on revenue from forests and rivers, while the sub-committee under the Ministry of Agriculture is focusing on revenue sources related to agriculture and real estate. Spokesperson Dhanishwor Aryal stated that the report writing process is ongoing with the aim of making the revenue system more effective, transparent, and accountable.

He informed that public suggestions were sought regarding overall revenue administration reform while drafting the Financial Act for the upcoming fiscal year until the end of Chaitra, and the compilation of these suggestions is currently in progress. Furthermore, a round of discussions has already been held with the heads of revenue collection offices in the province. The plan is now to hold discussions with local levels and subsequently consult with private sector stakeholders regarding revenue.

He mentioned that the budget expenditure and internal revenue collection status of the current fiscal year are being viewed very seriously. He explained that the fact that only about 34 percent of the total budget was spent in Lumbini Province by the end of Chaitra was due to factors like protests and elections, which hindered many bill payments. The government claims that more than 70 percent of the budget will be spent, as much work is happening in the field and bill collection is expected to increase in Baisakh.

The Lumbini Province government has spent only 34.31 percent of the total allocated budget by the end of Chaitra of the current fiscal year 2080/81. During this period, 32.36 percent of capital expenditure and 37.27 percent of recurrent expenditure have been incurred. Out of the 38.91 billion rupees allocated, only 13.34 billion 96 million rupees were spent by the end of Chaitra.

Out of 23.47 billion 14 million 65 thousand rupees allocated for capital expenditure, 7.59 billion 57 million rupees have been spent. Similarly, out of 15.43 billion 5 million 35 thousand rupees for recurrent budget, 5.75 billion 39 million rupees have been spent.