Birgunj Metropolis Prepares Record Budget of NPR 4.3 Billion Amidst Financial Concerns

Bara. Birgunj Metropolitan City is preparing to present a budget of approximately NPR 4.3 billion for the upcoming fiscal year. This is the largest budget proposal to date. Chief Administrative Officer Basanta Bahadur Bohora informed Ratopati that all preparations for the policy, program, and budget to be presented on Ashar 10 have been completed. The NPR 4.3 billion budget ceiling set by the metropolis for the fiscal year 2083/084 includes NPR 1.98 billion in grants from the federal government, with NPR 710 million allocated for water supply projects. Of this federal grant, NPR 350 million is under financial equalization, and the remaining amount is conditional grants. The metropolis has not yet received NPR 230 million in budget from the Madhes Province government under conditional, special, and complementary grants for the current fiscal year. The province government has withheld its budget because the metropolis has not paid the amount it owes to the province government under the 60-40 revenue sharing for the past two years, according to the metropolis. Chief Administrative Officer Basanta Bahadur Bohora stated that apart from regular programs, no significant new programs have been introduced for the upcoming fiscal year. He explained that the large budget size is due to the need to pay off the deficit budget of over NPR 1 billion from the current fiscal year in the upcoming fiscal year. 'We estimated internal revenue of NPR 1.71 billion in the current fiscal year, but with only about NPR 520 million expected to be collected, the budget deficit has increased,' said Administrative Chief Bohora. 'We have not introduced any new programs for the upcoming year except for those that must be continued.' The metropolis had estimated an internal revenue of NPR 1.71 billion last year and implemented plans accordingly. However, due to the revenue not being collected as estimated, there is an outstanding payment of NPR 1 billion, including gratuities for retired employees. Chief Administrative Officer Bohora commented that if revenue collection is strictly enforced, the metropolis could collect around NPR 2 billion in property tax alone. 'We do not have records for many houses, and house plans have not been passed,' Bohora said. 'Due to the conflict between the federal government and local levels over who collects house rent tax, we have not been able to collect as much revenue as estimated.' The metropolis has collected NPR 488.2 million in revenue as of the first week of Ashar in the current fiscal year. In the same period last year, this revenue was NPR 524.6 million. In addition to paying for old projects, the metropolis still needs to pay approximately NPR 400-450 million for the gratuity of about 18 retired employees this year. The metropolis had presented a budget of NPR 3.22 billion for the current fiscal year 2082/083, of which NPR 1.29 billion was received through government grants. Similarly, including the support from donor agencies, the realistic budget for the current fiscal year exceeds NPR 3 billion. However, the proposed budget for the upcoming fiscal year is significantly higher, raising questions about financial imbalance. Based on the current situation, it is estimated that the metropolis is in a deficit of approximately NPR 1.20 billion by the end of the current fiscal year. The budget being prepared for the upcoming fiscal year is also projected to be in a deficit of about NPR 1 billion. Due to the continuous deficit budgets, the financial condition of the metropolis is weakening, and even the salaries of employees and regular administrative expenses are likely to be affected. The metropolis has also been criticized for not spending the conditional grant amounts in the expected areas. Meanwhile, as Mayor Rajeshman Singh is suspended, Acting Mayor Imtiaz Alam has taken charge. Although expectations were that the upcoming budget would be realistic with the arrival of Bohora as the new Chief Administrative Officer, the preparation to present a budget with a large deficit has raised further questions about financial management.