Government tightens rules on vehicle purchases, Foreign trips and administrative spending

KATHMANDU: The Ministry of Finance has tightened government spending rules, requiring all government agencies to obtain prior approval before purchasing new four-wheelers or undertaking foreign visits.

The ministry introduced the provisions through its guidelines on the implementation of the budget for the current fiscal year, issued on Monday, as part of measures to promote fiscal discipline and ensure more efficient use of public funds.

Under the new guidelines, government agencies will not be allowed to purchase any new four-wheeler vehicle from their allocated budget without obtaining prior consent from the Ministry of Finance.

Similarly, government officials and agencies must obtain prior approval from the ministry before undertaking foreign visits.

The guidelines have also introduced tighter controls on government office rentals. Government agencies will be allowed to rent buildings only when government-owned buildings are unavailable. In such cases, they must prioritise buildings located outside major commercial centres and main roads, with only basic infrastructure and facilities.

Government agencies have been instructed to prioritise the use of vacant government-owned buildings for their official operations. Any rented building must be used exclusively for government purposes, according to the guidelines.

The ministry has also called for maximum austerity in administrative expenses, including spending on water, electricity, communication services, rent, fuel, maintenance, stationery and office supplies, allowances, training, seminars, service fees and travel.

The guidelines seek to maintain fiscal discipline by ensuring that public expenditure is carried out with the highest possible level of economy and efficiency.

To make the payment system more systematic and ensure effective utilisation of government funds, government agencies will have to prepare monthly cash plans and submit them to the Ministry of Finance.

The guidelines also require agencies to inform the Ministry of Finance within seven days if they need to make payments exceeding Rs 1 billion, in a bid to improve cash-flow management and prevent sudden pressure on government finances.

Government agencies have also been instructed to assess potential fiscal risks that may arise during the implementation of projects and programmes and adopt appropriate measures to mitigate such risks.

According to Finance Secretary Ghanshyam Upadhyay, efforts should focus on ensuring effective implementation of major infrastructure projects, developing systems to assess and account for potential risks, and strengthening fiscal risk management to achieve a significant improvement in capital expenditure.

The guidelines further require government agencies to identify problems encountered during budget implementation and communicate the causes of such problems to the National Planning Commission and the Ministry of Finance.

The Ministry of Finance will also conduct a budget implementation review every two months to assess progress and address challenges affecting the execution of the government’s programmes and projects.

The latest measures reflect the government’s broader effort to strengthen budget execution, control unnecessary administrative spending, improve cash-flow management and ensure that limited public resources are directed towards priority programmes and capital projects.