January 24: Prime Minister Pushpa Kamal Dahal has instructed the Ministry of Finance to completely stop adding unnecessary plans in the annual budget. The prime minister made such remarks a few days after the government amended the Fiscal Procedures and Financial Accountability Act 2076 through an ordinance to change the budget schedule.

Speaking at a meeting held at the Office of the Prime Minister and Council of Ministers on Tuesday afternoon to discuss the preparation of the next fiscal year's policies and programmes and the budget, Prime Minister Dahal said that problem arises when the Ministry of Finance adds new projects and programmes by itself, and instructed the ministry to stop such work completely. According to Prime Minister Dahal, the concerned ministries should be given full access to the budget system and they should be allowed to finalize their own programmes and projects. He lamented that the old plans are being shelved but new plans are being added. According to the prime minister, this will not only stall the work but also waste resources.

“Development should be planned. Ironically, development projects are initiated without any feasibility study and ensuring resources for such projects. It often leads to freezing of the allocated budget,” said the PM.

He stressed the need to complete the plans that were selected in the past and are still incomplete.

PM Dahal claimed that there has been an improvement economy but many problems in the development sector still persists. “The signs of the economy are positive. However, our economy is not free from pressure. There are many problems in development work. This time, let's rise above the traditional thinking and patterns. We should choose a plan that will not make everyone happy, but will fulfill the task of prosperity of the country.”

The PM’s directed the National Planning Commission (NPC) and the Ministry of Finance to hold discussions with all the ministries by February 3 before finalizing the ceiling of the budget. Prime Minister Dahal has instructed them to hold a group discussion with all the ministries/agencies within February 8 after the completion of the ministry/agency discussions and make a schedule to discuss the national priorities and the state of national resources.

The PM’s instructions include allocation of the budget for new programs and plans only after ensuring that the ongoing projects are completed. He emphasized allocating the budget according to the approved procurement master plan for national pride projects.

PM Dahal also directed government officials to allocate budget only for projects and programs that have received multi-year resource assurance, completed preparations, entered the project bank, and yielded returns. He also issued instructions to end the practice of ministries sending conditional grants to provincial and local levels in the middle of the fiscal year.

The prime minister also instructed to keep the budget ceilings of the ministries/organizations in the schedule when presenting the principles and priorities of the budget in the parliament and to prepare the budget by incorporating the topics raised in the parliament and the suggestions given by the general public on the principles and priorities of the budget.

PM Dahal’s directive also emphasized restructuring the revenue system, focusing on building a system to increase production and productivity, expanding the scope of revenue, maintaining customs revenue of raw materials lower than that of finished goods, and making changes to the tax structure.

PM Dahal instructed the Ministry of Finance to adopt austerity measures in recurrent expenses, increase development expenses, use external and internal loans only for development expenses. He highlighted the importance of allocating the budget for the productive sector.