Lumbini Province Government Plans Budget Cut for Upcoming Fiscal Year

Butwal. The Lumbini Province government is preparing to reduce the size of the budget for the upcoming fiscal year (2083/084) compared to the current fiscal year. Accordingly, the subordinate ministries have been sent a budget ceiling reduced by approximately 10 to 15 percent.

Based on the reduced ceiling compared to the current fiscal year, the ministries have been asked to propose programs for both capital and current expenditures. The Provincial Ministry of Economic Affairs and Planning stated that the ministries are currently busy preparing program formulations, especially by cutting down current expenditures as much as possible. The process of collecting programs from subordinate offices has been initiated.

According to Dhanishwar Aryal, Deputy Secretary and Spokesperson of the Ministry, the budget for the upcoming fiscal year is expected to decrease compared to the current fiscal year. 'We have sent a ceiling reduced by 10 to 15 percent to almost all ministries. Programs are being prepared accordingly,' he said.

According to Aryal, the budget for the upcoming fiscal year may be less than approximately 35 billion rupees. 'If the federal budget and internal resources are strong, the budget size may increase again,' he told Ratopati.

In the current fiscal year, the Lumbini Province government had allocated a budget of 38.91 billion rupees. Currently, the ministries have been given an initial ceiling of around 22 billion rupees, and it is estimated that the total budget will reach around 35 billion rupees when federal grants and internal resources are added.

Aryal clarified that the budget has not been cut at the same rate in all ministries. A detailed framework will be prepared after the ministries submit their programs by the end of Baishakh. According to him, current expenditures will be cut more, while the budget for multi-year projects will not be cut.

The ministry stated that priority has been given to mandatory liabilities, committed expenditures, and multi-year projects within the ceiling received from the ministries.

Economist Manikkar Karki has suggested that the government should not bring a budget beyond its own resources and capacity. He emphasized that the province should prepare a budget based on its own internal resources and capacity, rather than relying excessively on the federal government. 'A realistic budget should be made based on one's own resource capacity rather than relying on the center,' he said.

According to Karki, ministries should also propose programs on that basis. He stated that the budget will not be effective if programs that lack resource assurance or cannot be implemented are included. He suggested that to make the budget implementable, realistic, and result-oriented, programs coming from the ministries should also be selected based on priority and need.

• Size of Budget to be Clear Only After Federal Budget

The budget for the upcoming fiscal year of Lumbini Province is still not clear due to the status of the federal budget and internal revenue. Based on the current situation, the province has been provided a ceiling to operate a current and capital budget of approximately 22 billion rupees, but officials from the Ministry of Finance believe that the budget size will increase to around 35 billion rupees when multi-year projects of the federal government, programs matching the province, and conditional grants are added.

In the past, as internal revenue collection appeared weak, the provincial government has started preparations to improve it. For this, sub-committees have been formed and reports have been prepared with the objective of increasing revenue. Suggestions have been collected from stakeholders and phased discussions have also been held.

Based on all these suggestions, the provincial government is preparing to bring a new economic act. According to Aryal, spokesperson for the Ministry of Finance, the Revenue Advisory Committee is integrating the suggestions received from the sub-committees and preparing an overall report.

In the current fiscal year, the target was to collect 4.88 billion rupees in internal revenue, but less than half of it has been collected so far. In the past as well, revenue has not been collected as per the target.

The sub-committee under the Ministry of Industry, Tourism, and Transport has focused on revenue from the vehicle and transport sector and has suggested identifying new sources and revising tax rates.

The sub-committee under the Ministry of Forests has focused on revenue from forests and rivers, while the sub-committee under the Ministry of Agriculture has submitted a report focusing on revenue sources related to agriculture and real estate.

In the current fiscal year, although the Lumbini Province allocated a budget of 38.91 billion rupees, only about 34 percent of the total budget has been spent by the end of Chaitra. According to the Provincial Treasury and Comptroller Office, only 13.34 billion rupees have been spent so far, indicating a weak budget implementation aspect.

Dinesh Panthi, spokesperson for the provincial government and Minister of Agriculture, said that although the size of the budget may decrease slightly, work is being done with the goal of increasing internal resources. He mentioned that the province's budget will only be clear after the federal budget arrives, and clarified that the budget ceiling given to the ministries at present may fluctuate as needed.