Austerity in current expenditure, maintaining allocation efficiency and long term in projects and programmesRequests to include activities of a nature creating liability
The government has decided not to include in the budget of the next fiscal year the activities which have not been completed in advance and which create long-term liabilities. Various eight-point instructions have been issued in the budget formulation guidance for the financial year 2082/83 issued by the Ministry of Finance.
According to this, budget proposals, new projects and proposals, foreign aid projects, management of multi-year liabilities, prioritization of projects of national pride, intergovernmental financial transfer, maintenance of thrift and adherence to guiding principles in budget formulation are within the limits. In order to maintain allocation efficiency under
guidance, there is a provision that budget should be proposed only for activities directly related to the project's objectives. The guidance should include activities of the nature of creating long-term obligations in projects and programs.
The Ministry of Finance has issued instructions to other related ministries, commissions and government agencies such as offices to send the budget program by March 15. The guidelines include budget limits, new projects and programs, foreign aid projects, multi-year and created liability management, projects of national pride, intergovernmental financial transfers, frugality in spending and changes in the guiding basis of budget formulation.
'Only essential budget will be proposed to maintain frugality in current expenditure. Sufficient budget will be proposed under the heading of mandatory obligations so that no further disbursements are required later," the guidance says, "Annual program and budget will be proposed within the received budget limit. In the course of implementation, a realistic budget will be proposed so that there is no need to change the amount and modify the program. It is also said in the guidance to propose programs and projects in accordance with the basis and criteria of project classification, 2080.
In order to maintain allocation efficiency, it is requested to propose budget only for activities directly related to the purpose of the project and to include activities of the nature of creating long-term obligations in projects and programs. Since activities of the same nature are included in different subheadings and programs, it is also said in the guidance to integrate and manage such activities from the next financial year.
If the projects under implementation are to be completed in the next financial year, the guidance states that the budget for new programs and projects should be proposed only after allocating enough budget for that. "In order to make effective use of limited resources, the tendency to scatter resources on small projects will be discouraged," the guidance says, "There will be a system to reduce the number of ongoing projects, postpone projects that cannot be implemented and lower priority projects and propose only implementable projects."
It has been asked to include only the projects entered in the project bank of the National Planning Commission in the budget, as there is no budget allocation for the implementation of new projects that have not been studied, to propose a budget only for the study and preparation of such projects. New projects and programs cannot be proposed without ensuring the source. Based on the implementation experience of current programs and projects so far, it is seen that restructuring and integration should be done accordingly and it should be made systematic and successful," the guidance states. It is also said in the guidance to ensure that there is no inter-level and inter-ministerial duplication when proposing
projects, and to coordinate inter-agency to minimize risk based on disaster sensitivity and to propose a budget prioritizing post-disaster reconstruction work.
When proposing a budget for foreign aid, sufficient funds will be offered to match the implementation schedule of existing and new projects. Necessary budget will be proposed for projects and activities in accordance with the aid agreement, including the method of payment.
Ministry of Finance has been asked to propose a budget for other projects and programs only by allocating enough funds to pay the obligations created in the financial year 2082/83 for the projects and programs that have received resource consent. It has been asked to re-prioritize and manage the resources even for those projects that do not need to continue their implementation on the basis of priority. It has also been asked to offer the amount of the created obligation to pay the expenses legally incurred in various projects and programs.
There is a provision in the guidance that the budget should be proposed so as to meet the obligations created in national pride projects and other important programs. As the budget allocation for national pride projects has been reduced in the last two years, it is necessary to propose a sufficient budget based on the prioritization and suggestions made in the guidance of the National Planning Commission to propose projects and programs for the financial year 2082/83. Conditional grant projects should be re-prioritized and only quality projects should be continued.
The guidance also provides that allocations should be proposed to reduce the expenses of current nature in order to be compatible with the criteria for making public expenditure frugal and effective, 2081. It is said that the budget should be proposed only if there is sufficient basis and cost-effectiveness in terms of expenses including software purchase and consulting services, which will help in the development of the integrated system. It is stated in the guidance to propose the budget so that the project/programme is not duplicated with the relevant ministries, provinces and local levels.
