February 18: The government has started its homework of preparing budget for the next fiscal. The National Planning Commission has also determined the ceiling (limit) of the new budget. The ministries have started their homework of the budget within the limit fixed by the NPC.

Finance Minister Dr. Prakasharan Mahat confirmed that the NPC has set a budget ceiling of Rs 18 billion for the next fiscal year. The resource estimation committee of the National Planning Commission led by NPC Vice Chairman Dr Meen Bahadur Shrestha recommended the budget ceiling.

"The ceiling of the budget was determined after discussions with the prime minister, the Resource Estimation Committee and the Ministry of Finance," Minister Mahat said at a press conference held at the Ministry of Finance in Singh Durbar on Friday.

The mid-term expenditure structure projected that the next fiscal year's budget would be equal to Rs 1949.5 billion. The NPC set the budget ceiling of Rs 150 billion than the mid-term expenditure structure projection.

It has become a tradition to announce a big-size budget and later downsize it due to the government’s failure to spend the budget.

If we look at the current fiscal year's budget, Finance Minister Mahat had announced a budget of Rs 1751.31 billion even though the NPC had set a ceiling of Rs 1688 billion. However, the government revised the budget estimate to Rs 1530.26 billion through the mid-term review of budget after realizing that it will not be able to spend the initially announced budget.

Finance Minister Mahat insists that the Ministry of Finance has not reduced the size of the budget but only presented the estimated the income and expenses of the budget. According to him, the Ministry of Finance cannot make cuts and amendments to the budget passed by the Parliament. However, the ministry has the authority to estimate how much can be spent in the next 6 months based on 6 months of expenditure and income.

For the year 2079/80, the then Finance Minister Janardan Sharma had announced a budget of Rs 1793 billion but the government failed to spend the budget. The government during last fiscal year revised the budget estimate to Rs 1549 billion. However, the total expenditure of the budget stood at Rs 1429.56 billion.

There has been a problem with the government's spending system for a long time. In order to address the problem, the government also amended the policy arrangements related to financial procedures and financial responsibility through an ordinance.