The government has reduced the size of the budget allocated for the current fiscal year after failing to raise and spend resources. In the semi-annual review of the budget for the current fiscal year made public on Tuesday, Finance Minister Rameshwor Khanal said that the total budget allocated initially was reduced by Rs 275 billion 783.3 million.

In the current fiscal year, Bishnu Prasad Poudel, who became the Finance Minister from UML, had made public a budget worth Rs 1964.11 billion. It is said that after it was found that the allocated budget could not be spent in a large amount, it was revised and reduced to Rs 1688.32 billion. The Finance Ministry, releasing the semi-annual evaluation report of the budget for the fiscal year 082/83 on Tuesday, reduced the current expenditure from Rs 1180.98 billion to Rs 1125.97 billion. Capital expenditure till 26th Magh of the current fiscal year is only 14.98 percent. The ministry's own officials have been admitting that the situation of capital expenditure is very pathetic. The ministry allocated Rs 47.88 billion for capital expenditure in the current fiscal year, but this has been reduced to Rs 243.30 billion.

Similarly, the allocation for financial management has been reduced from Rs 375.222 billion to Rs 319.439 billion. The revised budget estimate is aimed at achieving 6 percent economic growth in the current fiscal year and keeping consumer inflation at 5.5 percent.

The revised amount is estimated to be spent on current, 59.65 percent on capital, and 85.02 percent on financial management, said Suman Dahal, head of the budget and program division of the ministry. “We are focusing the funds for the postponed projects on projects of national pride and strategic importance,” he said. “A total of Rs 42 billion has been released for projects requested by various ministries with justification.” He said that 59.62 percent of the capital expenditure will be spent in the current fiscal year, which is expected to be better than the average of previous years.

Finance Minister Rameshwor Khanal claimed that the size of the budget has not decreased. ‘The budget is Rs 1964 billion, if any government agency can spend that much, it will be available,’ he said, ‘The government’s consolidated fund is in deficit by Rs 130 billion, in such a situation, it is seen that some control is needed in the budget.’ He said that the budget was postponed because it was seen that the budget should be prioritized and spent in the right place, and that the unprepared projects worth Rs 19536.5 million would not yield results.

‘After an initial assessment, such projects have been postponed in the budget until they are ready,’ he said, ‘Projects that have been tendered and liabilities created by tendering have been released.’ He said that the situation of capital expenditure is very low. ‘A budget of Rs 67.86 billion has been allocated for projects of national pride, and the expenditure on its implementation alone is 15.49 percent,’ he said. ‘This is also not satisfactory. The first two months were spent institutionalizing the transition period, and preparations for the elections had to be made at this time.’

He clarified that since time had to be spent on ensuring security for citizens and bringing political parties into dialogue and trust, ministers of the taluk ministries and individuals had not been able to pay enough attention to the capital expenditure of their ministries. ‘I also could not pay attention,’ he said. ‘Even after budget allocation for some projects, work could not gain momentum due to forests. Now, by amending the forest regulations, the problems seen in projects related to electricity transmission lines and road infrastructure have been resolved.’ He informed that Rs 581.40 billion and 72 million in revenue were collected, including miscellaneous receipts, compared to the half-yearly target of Poush Masant.

According to Finance Minister Khanal, a budget has been provided to the Election Commission, Home and Defense Ministries for election management. ‘The government has made cash arrangements of about 20 billion rupees for the election,’ he said. ‘Of the 650 vehicles to be received from the Indian government, half have arrived so far.’ He said that the rest will be received 10 days before the election.

He said that the government of Nepal has received approval to use 392.5 million rupees from the grant provided by the Japanese government in the government’s own treasury for the election. ‘The first and only objective of this government is to conduct the election and maintain good governance and control corruption,’ he said. ‘We have paid more attention to that as the budget required for holding the election and maintaining good governance needs to be secured.’ He said that the government has been of the opinion from the beginning that the health insurance liability should be paid after it is created.

‘The Ministry of Finance does not have the authority to withdraw money outside the budget limit in the middle of the year, it can only transfer money within the budget, the budget is not owned by the Ministry of Finance but goes to the ownership of the concerned ministry after authorization,’ he said, ‘The Ministry of Finance cannot simply drag out the budget of any ministry and send it to other ministries, the concerned ministry has to surrender for that, the Ministry of Health and Population has not surrendered in this.’

He said that one billion rupees were given to the government hospital to ensure that the payment of the payment should not be delayed, showing interest in health insurance. ‘The Ministry of Health itself has also asked to transfer the money within its own budget as it could save 720 million rupees, so we have done that,’ he said, ‘I do not understand that the Ministry of Health has received any concrete figures about the liability, there has been talk of 15 billion rupees in the media, which has never come up in our meeting.’ He assured that such an amount could be 6 to 7 billion rupees and that efforts would be made to discharge the liability after 21 Falgun.