Kathmandu. The government, formed by the Genji movement, has been ruthless in its spending cuts. The Ministry of Finance has issued a circular regarding expenditure reduction and austerity.

As per Section 21 of the Financial Procedure and Financial Accountability Act, 2076, the budget allocated for capital expenditure under various ministries of the government will be withheld for the projects that have been newly entranted, not prepared and have dual entries. Although the budget has been allocated under the heading of the budget under various ministries, the budget allocation in the areas of less importance and outside the objectives will be withheld.

The budget will be withheld as the projects have not been identified by keeping a lump sum budget in the name of Bhapari or other headings. To stop the appropriation of various ministries including small and fragmented projects to be operated by the provincial and local levels.

The Ministry has stated that the ban will be lifted as per the demand of the concerned ministry to the extent of clearing the activities mentioned in the proposed budget sub-heading if the liability has been created in the previous fiscal year but the payment is yet to be made. Expenditure management will be done by transferring the amount from the sub-heading of the national priority, resource agreed and successive projects that have been created or liability will be created in the current fiscal year but if there is less allocation, then the expenditure will be managed by transferring the amount.

According to the Ministry, if the budget is insufficient due to insufficient budget allocation due to insufficient allocation of liability as per the prevailing laws, the expenditure would be managed by amending the amount transfer, source transfer and programme from the withheld amount.

The Ministry of Finance has said that the stalled projects will be released after receiving a letter from the concerned ministry to confirm that the liability has already been created by the purchase agreement by September 18, 2002 or if the procurement process is in the final stage.

The government has decided to proceed with the procurement process of projects and programs with the consent of the Ministry of Finance if it is seen that obstacles will be faced in meeting the targets of the social sector set by the budget for this fiscal year in the social sectors of basic needs such as education, health and drinking water.

According to the Ministry, the projects recommended as per the Reconstruction Fund Work Procedure for the reconstruction of government structures would be managed by enlisting them in the Ministry-wise budget information system. It has been stated that multi-year resource consent will not be given for the projects that have been newly entered in the current fiscal year or for any other procurement purpose.

To make the structures service-friendly, open and efficient while reconstructing government structures. The physical structure and layout will be managed by analyzing the workload, nature of work and position structure of the office. The consumer committee has decided not to implement more than 10 lakh projects operated by the government and implemented by the province or local level with financial transfer from the government.

The government has decided to reduce the contingency amount limit for construction works up to 3 percent in the projects estimated to cost up to Rs 1 billion and up to 2 percent in the projects of more than Rs 1 billion.