First Business News Portal in English from Nepal
KATHMANDU: The government has drastically reduced the budget allotted for development projects in order to relieve the pressure of scarce financial resources brought on by low revenue collection. The budget has instead been transferred to ongoing projects and used to pay ongoing obligations. .
An employee of the Ministry of Finance (MoF) claims that the government has significantly reduced the funds allotted for the ambitious programs described in the budget for the current fiscal year. “The funds announced primarily for the programs based on the grants of the federal government have been reduced,” the MoF source said. “The revenue collection has fallen short of the targeted amount by around 16 percent than the amount of the last year.”.
For instance, for the current fiscal year, the government reduced the budget for the “Prime Minister Nepali Product and Consumption Promotion Program” from Rs 3.45 billion to just Rs 500 million.
A number of ministries’ budget caps have also been lowered by the government. To Rs 8.13 billion for the fiscal year 2023–2024, the Ministry of Industry, Commerce, and Supplies’ budget ceiling has been decreased by 22%.
The Ministry of Physical Infrastructure and Transport’s budget ceiling has also been reduced by 21.8% to Rs. 126.8 billion for the upcoming fiscal year. According to analysts, this will seriously hinder the advancement of the development projects.
Only 43% of the revenue collection goals for the current fiscal year have been met by the government with nearly nine months of the year already gone. With only three months left, it will be nearly impossible for the government to raise the final 57% of the fiscal year’s target revenue of Rs 1.403 trillion. .
In the meantime, the government has begun to shift significant sums of money from the planned megaprojects to those currently being built. For flood control and the Sunkoshi-Marin Diversion Multipurpose Project, respectively, funds collected for the Budhi Gandaki Hydropower Project totaled Rs 400 million and Rs 1 billion.
Similar to this, Rs 150 million has been transferred from the improvement of highways linking the capital to different provinces to the Dhulikhel-Suryabinayak-Koteshwor road segment. During the first seven months of the current fiscal year, the government transferred money from the budget totaling Rs 22.17 billion. According to the MoF, a fund transfer totaling Rs 9.78 billion was made to cover the government’s ongoing obligations in just one month, between mid-February and mid-March.
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