Nepal's Ministry of Finance Intensifies Preparations for Fiscal Year 2083/84 Budget

Kathmandu. The Ministry of Finance is intensifying preparations for the upcoming fiscal year 2083/84 budget. 

The Ministry of Finance held a revenue consultation meeting on Baisakh 2. Similarly, on Baisakh 3, it held a meeting of the Inter-Governmental Finance Council and thematic committees, resulting in 16 decisions. The Council meeting decided to remove the provision for 'abanda' (unallocated) budget starting from the next fiscal year. It has abolished the previous trend of allocating 'free budget' without plans or objectives. 

The government used to allocate a large budget as unallocated funds. Stating that such a budget did not yield significant results, it has announced the end of this trend in the upcoming year's budget with the consent of local municipalities and provinces. 

Similarly, it has also decided to implement, effective from Shrawan 1, 2083, a system to identify and abolish or settle old sick projects and develop a procedural allocation system for provinces and local levels when formulating annual programs. 

Four days after the committee meeting, a high-level meeting was held on Monday with all ministers and secretaries to discuss budget-focused issues. Furthermore, the Ministry of Finance stated that the budget committee is continuously holding discussions with every ministry.

Finance Minister Dr. Swarnim Wagle announced on the very day he took office that he would bring a transformative budget. Minister Wagle is holding extensive discussions to ensure the budget is prepared accordingly. According to sources, during the discussions on Monday, ministers demanded the addition of new programs. 

Ministers stated that new projects should be added based on ministerial requirements. However, Finance Minister Wagle made it clear to the ministers that no new projects beyond necessity would be added in the upcoming budget.
According to sources, Finance Minister Wagle said, 'New projects cannot be included in the upcoming budget. Ministries should cut old, immature, and low-priority projects. Only then should new projects be included.' 

Finance Minister Wagle urged other departmental ministers to create space for new projects in the budget only if the ministries themselves create it. He clarified that ministries must create space for the type of budget to be formed. While briefing on the economy, Finance Minister Wagle urged them to remove unnecessarily lingering old projects before proposing new ones.

In the meeting, Finance Minister Wagle said, 'If you want to include new projects, you must cut old ones. It is not said that important projects affecting development should be cut, but you should remove immature and long-lingering old projects to create space for new ones yourself.' 

He emphasized that ministries should determine the priority of their projects. Finance Minister Wagle also mentioned that the country is currently in a sensitive state of public financial crisis and that the upcoming budget will be a collective test for everyone. 

The budget for the upcoming fiscal year 2083/84 is being drafted by a five-member team coordinated by Uttar Kumar Khatri, head of the Revenue Management Division. Five people from the Ministry of Finance have been given the responsibility of drafting the budget for the upcoming year. 

He informed the ministers that the current situation, where the state's mandatory obligations are around 1.33 trillion rupees and revenue collection is around 1.18 trillion rupees, has made budget formulation challenging.

Finance Minister Wagle emphasized that good governance and institutional strengthening, integrity, broad economic growth, promotion of private sector investment, expansion of information technology, green and sustainable development, capital formation through infrastructure construction, development of the middle class, and upliftment of the poor should be put forward as the main theoretical foundations of the budget. 

He urged all ministries to determine their priorities realistically and be active in the budget formulation process within the available resources and limits. The information given by Finance Minister Wagle to the ministers means that to include new and essential projects in the upcoming budget, they will have to cut budgets from old projects under their own ministries that have not been able to move forward or are irrelevant.

The budget writing process was moved forward with the arrival of the new government by entering ministerial budget programs and amount figures by Chaitra 15. There is a constitutional provision to make the budget public on Jestha 15. According to that legal provision, the Ministry of Finance has been preparing for the budget since Falgun. 

Budget drafting under the coordination of Uttar Kumar Khatri

The budget for the upcoming fiscal year 2083/84 is being drafted by a five-member team coordinated by Uttar Kumar Khatri, head of the Revenue Management Division. Five people from the Ministry of Finance have been given the responsibility of drafting the budget for the upcoming year. 

Ministry spokesperson Tankaprasad Pandey informed that they are currently working by holding ministerial-level discussions for budget drafting in accordance with the mandate given by the ministry. The five-member committee has been assigned the main responsibility of preparing the draft of the budget statement for the upcoming fiscal year and determining the principles and priorities of the budget.

Heads of various divisions of the Ministry of Finance have been selected as members of the committee. Accordingly, the members of the committee include Budget and Program Division Chief Dr. Suman Dahal, International Economic Relations Division Chief Dr. Dhaniram Sharma, Economic Policy Analysis Division Chief Mahesh Bhattarai, and Financial Federalism Coordination Division Chief Sevantak Pokharel. 

This team is also working on drafting the principles and priorities of the Appropriation Bill to be presented in both houses of the Federal Parliament. This committee has also been assigned the task of preparing and submitting the final draft of the budget statement to be presented by the Finance Minister in Parliament.

Budget ceiling of 1.89 trillion

Last Falgun, the National Resource Estimation Committee gave the Ministry of Finance a budget ceiling of 1.89 trillion for the upcoming fiscal year (2083/84). The committee estimates that only 367.1 billion rupees will be spent as capital budget out of that ceiling, which is 1.787 billion less than the allocation for the current fiscal year. 

A limit of up to 755.24 billion has been given in the current budget. But the budget for the current fiscal year was 733.69 billion. Similarly, there is a limit of only 348 billion for the repayment of loan principal and interest (financial management). But a limit of 419.15 billion has been given for financial transfer.