The new government formed after the Gen-G protests has cut about 1.25 trillion rupees from the total budget allocated for the current fiscal year. As one of the first decisions taken by Finance Minister Rameshwor Khanal after taking office, he formed a committee to study which projects could be cut in the current year's budget.

The Cabinet meeting on October 20 also decided to cut the budget of some projects. As per the same decision, the government has cut the budget of about 114 billion 100 million rupees for projects under about a dozen development ministries.

However, the government has not called it a budget cut but rather a freeze (postponement). Although it is now called a freeze, sources have stated that this is a budget cut. The Ministry of Finance has stated that the budget of projects that lack preparation and resource assurance, are included in the budget based on comparatively less need, accessibility and pressure, and are outside the project bank have been cut. 

The government plans not to immediately proceed with the work of projects that have been subject to budget cuts. The Ministry of Urban Development is the one with the highest budget freeze. The Ministry of Finance says that out of the budget of 118 billion 344 million rupees allocated for this ministry in the current year, 63 billion rupees have been frozen.

While the government is deciding not to include projects below 30 million in the budget of the Union Government, Sahari has put forward 20 programs worth one lakh each. Two dozen schemes worth Rs 100,000 have been included in the budget. This ministry has been including fragmented schemes in the budget every year to please leaders and cadres. The party from which he becomes a minister has included programs in the budget to please his close party and fraternal organization. Recently, Congress leader Prakash Man Singh, who became the then Urban Development Minister, had also included programs in the budget saying that he would build a building for the fraternal organization Tarun Dal to please cadres. 

Spokesperson and Joint Secretary of the Ministry of Urban Development, Narayan Prasad Mainali, said that the budget of schemes under the ministry worth less than Rs 30 million has been postponed. ‘How many schemes for which the budget was asked to be postponed have created liabilities, how many have gone through the contract process,’ he said, ‘We are collecting details of that.’ Once the details are received, they will be sent to the Finance Ministry, after which it will be known which projects will be implemented and which will not. ‘It is not that all projects will be stopped,’ he said, ‘so the work will not be stopped once the payment is made.’ He said that work is being done to complete the collection of details quickly. 

The budget of all small projects has been suspended, said Bhimajun Adhikari, Joint Secretary and Spokesperson of the Ministry of Physical Infrastructure and Transport. ‘The budget of most projects with a budget allocation of Rs 30 million has been suspended, including new projects,’ he said, ‘projects worth about Rs 19 billion have been suspended.’ 

A budget of Rs 152 billion has been allocated to the Ministry of Physical Infrastructure in the current fiscal year. Similarly, the budget of projects with low needs under the Ministry of Drinking Water, Energy, Water Resources and Irrigation, Culture, Tourism, and Civil Aviation, Forest and Environment, Industry, Commerce and Supplies, Federal Affairs and General Administration, and Youth and Sports has been temporarily suspended, the Ministry of Finance has said. 

Along with the capital budget, a budget of Rs 1.45 billion 58 million has been frozen for program expenses and Rs 620 million 19 million for conditional current grants to government bodies, committees and boards. According to ministry sources, a budget of Rs 3.20 billion 49 million has been frozen for capital conditional grants to government bodies, committees and boards and Rs 150 million for upcoming current expenses (excluding miscellaneous expenses).

A budget of Rs 19.53 billion 6685 thousand including capital and current expenses has been frozen for the time being, said Tanka Prasad Pandey, Joint Secretary and Spokesperson of the Ministry of Finance. ‘There were duplicate programs in the budgets of various ministries,’ he said, ‘We have also removed duplicate programs.’ He said that there are two main areas where expenditure will be made now. 

‘It means spending on structures damaged by the movement, treatment of the injured, priority projects and elections,’ Pandey said, ‘By blocking the budget of projects that are not needed now, the budget can be added to priority projects.’ 

The Ministry of Physical Resources has said that the budget of 803 projects has been blocked in the new year. The budget of 123 suspension bridges and 149 road bridges, which are new projects to be implemented after obtaining multi-year agreements, has been blocked. The budget allocated to 22 projects that have received multi-year resource agreements and 54 projects that are being implemented sequentially has also been blocked. 

17 sick road contracts being terminated 

The government has started the process of terminating sick road contracts. The process of terminating sick contracts that have been lying idle for years without work has begun. The Postal Road Directorate, Federal Road Supervision and Monitoring Office Kathmandu and the Road Division Offices under Itahari have taken forward the process of terminating 17 contracts that are in a bad state.

The Road Division Offices Biratnagar, Chandranigahapur and the Directorate have issued public notices stating why they should not terminate 17 contracts, 5 each and Nuwakot 2. Most of the contracts for which the process of terminating the contract has been extended are for bridge construction.

Minister for Energy, Water Resources and Irrigation, Physical Infrastructure and Transport and Urban Development Kulman Ghising had directed the subordinate bodies to terminate the sick contracts to end the trend of taking contracts but not working on them and leaving projects stranded. 258 contracts under the road are sick.

The largest contract agreement to be terminated is the Kankai Bridge in Jhapa. The process of terminating the contract of the approximately 723-meter-long Kankai Bridge connecting Jhapa Rural Municipality-2 and Gauriganj Rural Municipality-1, which has been abandoned for 14 years under the Postal Highways Directorate, has moved forward.

A contract agreement was signed with Pappu Mahadev Khimti Joint Venture (JV) in the fiscal year 2067/68 for the construction of a concrete bridge in the design and build format. The physical and financial progress of the bridge construction in 14 years is only about 55 percent. Minister Ghising had told the locals on 26 Asoj that a decision on the construction of the bridge would be made soon.

The contract and plan deadlines were repeatedly extended in all the projects for which the contract was to be terminated. It is said that the construction work has been incomplete and abandoned, without showing interest in completing the construction even within the specified period. It is said that the construction contractor has not shown interest in completing the construction work even after requesting and informing them in writing and verbally on various dates.

How much budget of which ministry has been withheld?

Urban Development: 63 billion 96 million 25 million

Physical  : 19 billion 12 million 89 million 35 thousand