Kathmandu. With the formation of the new government, discussions have been started with the thematic ministries under the initial phase of budget formulation for the coming fiscal year 2083/84.

The National Planning Commission (NPC) in coordination with the Ministry of Finance has held preliminary discussions with three ministries today. According to EC Spokesperson Harisharan Pudasaini, discussions were held today with the Ministry of Finance, Ministry of Foreign Affairs and Ministry of Law, Justice and Parliamentary Affairs.

“Discussions have begun on the medium-term expenditure structure, budget ceiling determined by the National Resource Estimates Committee and the plans and programs prepared by the ministries based on the guidelines received from the Ministry of Finance,” said Pudasaini. ”

According to the Economic Work Procedure and Financial Accountability Act, 2076 BS, each ministry has to prepare policies, programmes and budget proposals of its subordinate bodies and submit them to the National Planning Commission and the Ministry of Finance within the deadline.

Accordingly, the Ministry of Finance had issued a circular to all the ministries to propose their plans and programmes by March 29. After the formation of the new government, the Ministry of Finance has been flexible in reviewing the deadline as the ministries have not got time to start working fully.

“The line ministries were asked to submit budget proposals for the upcoming fiscal year within March 29 in the LMBIS system, but the deadline can be extended as it seems necessary to incorporate the hundred-point agenda of governance reforms, election commitments of the ruling party and other reform programs,” said Tanka Prasad Pandey, spokesperson of the Ministry of Finance.

The government has directed the ministries to adopt clear criteria while presenting the budget. According to the Commission, the budget will prioritize the projects as per the medium-term expenditure structure, estimated cost, expenditure for the next three years and resource projection in line with the existing policy and periodic plan.

Likewise, the Commission has said that the issue of including multi-year liabilities and outstanding payments, making profit-cost analysis of the programs mandatory and including the past financial and physical progress report will also be seriously considered. The commission will prepare a report after carrying out a detailed study on the technical, financial and implementation aspects of the proposals received for the coming fiscal year. The report will then be submitted to the Finance Minister.

Meanwhile, the Ministry of Finance has started an in-depth study of the current economic and financial situation. Revenue Secretary Bhupal Baral, Economic Policy Analysis Division Chief Mahesh Bhattarai and Executive Director of Nepal Rastra Bank Ram Sharan Kharel have been given the responsibility of the committee. The committee has been asked to submit a report along with analysis of overall economic and monetary indicators within the next five days.

A Revenue Advisory Committee has been formed to study the tax policy coming along with the upcoming budget. Likewise, the economic survey and preparation of the progress report of public enterprises (yellow book) are also going on in parallel, according to the Ministry of Finance.

The new government’s policy priorities, the actual status of revenue collection, the capacity to manage expenditure and ensure foreign assistance will determine the shape of the upcoming budget. The challenge before the government is to meet high expectations with limited resources.

Especially, there is concern everywhere as to how realistic and implementable the budget will be to achieve the goals of economic governance, improvement in service delivery, infrastructure development and increasing investment in production-oriented sectors.