The budget ceiling for the upcoming fiscal year 2083/84 has been set at around Rs 1890 billion. The National Resource Estimates Committee led by the Vice Chairman of the National Planning Commission has set the budget ceiling. The ceiling has been set in the 'Report on National Resource Estimates and Expenditure Limit Determination 2081' submitted by the commission to the Ministry of Finance in the first week of Falgun.

The budget ceiling guided by the committee is around Rs 74 billion or around 4 percent less than the current fiscal year 2082/83. This year, the government had allocated a budget of Rs 1964 billion. The target for the upcoming year is to increase revenue by around 11 percent to raise resources within the budget provided for the upcoming year. Accordingly, the target for revenue collection will be around Rs 1200 billion for the upcoming year.

The commission has suggested increasing foreign aid. The committee has said that foreign grants should be increased by around 5 percent, foreign loans by 15 percent, and domestic loans by 14 percent for the upcoming budget. The National Planning Commission has stated that the budget ceiling has been set lower than last year to make the budget realistic since foreign grants and loans could not be received as expected. Although a budget of Rs 1964 billion was brought in the current fiscal year, the interim government has reduced it by about Rs 3.5 trillion to Rs 1688 billion.

Even if revenue increases slightly in the coming fiscal year, there will be pressure on resources and there will not be a large amount left for development construction, said Prakash Kumar Shrestha, Vice Chairman of the National Planning Commission. The Ministry of Finance has already set ceilings for various ministries within the limits given by the Resource Estimates Committee. Now, as soon as the ministries send the budget ceilings to their subordinate bodies, the budget demand will begin.

About 39 percent of the total allocated budget this year has been allocated for current expenditure. But for the coming year, the committee has said that the share of current expenditure in the total budget should be reduced to about 36 percent. It has been suggested that capital expenditure should be reduced to less than 4 trillion for the coming year. The government is bringing a large budget, but it seems that both revenue and expenditure will not be able to meet the targets during implementation. Vice Chairman Shrestha said that a realistic budget has been brought to increase public confidence in the budget, ending that. ‘The budget should be brought in a way that achieves the targeted objectives through efficient allocation of available resources, effective implementation of projects and programs, strengthening revenue collection, and clear division of labor between the three levels,’ he said. ‘In the upcoming budget, the federal government should not do small infrastructure and trivial programs, and the Planning Commission should be made effective with the responsibility of project selection, management, monitoring and evaluation, as well as increasing capital expenditure.’ 

About 39 percent of the total allocated budget this year has been allocated for current expenditure. But for the coming year, the committee has said that the share of current expenditure in the total budget should be reduced to about 36 percent. It has been suggested that capital expenditure should be reduced to less than 4 trillion for the coming year. This is less than the current fiscal year. This year, the government had allocated 4 trillion 7 billion rupees for capital expenditure.

Current expenditure will remain the same next year as well. Sources said that capital expenditure had to be reduced as there was no room for cuts in current expenditure and financial management. ‘It has been suggested that the internal debt for the coming year’s budget should be around 3 trillion 75 billion and external debt should be 2 trillion,’ the source said.

This year, the government initially announced a budget of Rs 1964.11 billion, but the half-yearly review has fixed Rs 1688.32 billion. The distortion of initially bringing a large budget by including arbitrary plans and making heavy cuts through the half-yearly review has been growing in recent years. After failing to raise and spend resources, Finance Minister Rameshwor Khanal initially reduced the total allocated budget by Rs 275.78 billion in the half-yearly review of the current fiscal year's budget.

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 the large allocated budget could not be spent and was revised and reduced to Rs 1688.32 billion.

In the half-yearly evaluation report of the budget for the fiscal year 2082/83, the current expenditure has been reduced from Rs 1180.98 billion to Rs 1125.97 billion. Capital expenditure is only 18.75 percent till the third week of Falgun of the current fiscal year.

The ministry's own officials admit that the situation of capital expenditure is very pathetic. The ministry has 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 375.22 billion to Rs 319.43 billion. The Ministry of Finance had made a revised budget estimate with the aim of achieving 6 percent economic growth in the current year and keeping consumer inflation at 5.5 percent.

The Ministry of Finance has stated that 95.34 percent of the revised amount is expected to be spent on current expenditure, 59.65 percent on capital expenditure, and 85.02 percent on financial management. It is said that 59.62 percent will be spent on capital expenditure in the current fiscal year, which is expected to be a better percentage than the average of previous years.

The committee has suggested that the budget for the coming year be realistic, resource-secure and result-oriented. Among the various ways to raise resources, the emphasis is now on proper allocation and prioritization. In the past, the budget was spread across all projects. Now, resources are being saved through project prioritization and the budget ceiling for the project is being increased with these resources, according to Planning Commission sources. Sources claim that the project prioritization should ensure returns, be completed quickly with less money, and prioritize older projects over newer ones, except for essential ones.

It has also been suggested to set a target of 5.5 percent economic growth and 6 percent inflation for the coming fiscal year. Even if the government sets a target of 6 percent economic growth this year, it is unlikely to be achieved. However, the Commission has said that giving priority to older projects in the coming budget will ensure that projects are completed on the one hand and there will be no rush of projects with insufficient resources on the other.

The Commission has said that the policy of not including projects costing less than Rs 30 million in the budget for the coming fiscal year should be strictly implemented. Last year, the commission also claimed that the provision of not including projects costing less than Rs 30 million in the project bank in the union budget would be fully implemented this year, but it could not be implemented.

Projects worth up to Rs 100,000 have also been included in the federal budget through the Ministry of Urban Development. However, for the upcoming budget, the commission has suggested that only projects for which an environmental impact assessment and detailed project report have been prepared and work is about to start should be kept in the project bank and only those should be kept in the budget.

The main economic agenda of the upcoming RSVP government

The RSVP has been assured of forming the government in this year's House of Representatives elections. It is seen that many of the agendas mentioned in the party's manifesto will be included in the upcoming budget.

Former Vice Chairman of the National Planning Commission and economist Swarnim Wagle has been elected to the House of Representatives elections from Tanahun-1. Wagle, who is also the Vice Chairman of the RSVP, won with 38,040 votes. Wagle is the potential Finance Minister of the new government. The RSVP had made public its pledge stating 100 bases of policy departure for transformation. Among the 100 points mentioned in the pledge, titled 'Determination to Set the Stage', the main economic agenda is as follows.

– Effective coordination of private investment and efficient, transparent and facilitating public role will be made

– The private sector will play a leading role in job creation, supply of goods and services, revenue contribution and investable capital flow, while the government will play a regulatory and facilitating role

– Professional, transparent and powerful regulatory bodies, free from political interference, will be created and strengthened to control distortions such as cartels, unhealthy competition, rent-seeking and policy exploitation

– Nepal will adopt a realistic, balanced and sustainable economic model within the framework of a social market economy that promotes innovation, fair competition and social responsibility in a balanced manner by ending the improper alliance between politics and regulation

– Liberal economic policies that promote the dynamism, innovation and creativity of the private sector and equitable redistribution of national income through public education, health, transportation, housing and social security – these two foundations will be combined in a balanced way

– The welfare state will not be limited to the distribution of benefits alone, but will also change the nature of growth Transforming the economy into a sustainable one.

- About two dozen laws that are obstacles to economic progress or have become irrelevant will be repealed. Complicated laws and regulatory procedures will be repealed or reformed in a series to reduce production costs, improve the business environment (doing business) and attract domestic and foreign investment in priority areas of economic growth.

- Nepal will establish a foundation for becoming a 'respectable middle-income country' by maintaining an average economic growth rate of 7 percent per year for the next five years.

- Within five to seven years (at current prices), the per capita income will exceed $3,000 and the size of the economy will approach $1 trillion.

- Liberal economic policies with social justice will be adopted. All tax burdens will be reduced with a guarantee that revenue will not decrease based on an advanced understanding (compact) with the private sector. And tax laws and regulations will be enforced in a ghost-effective manner.

- We will prevent planned tax evasion, and for the bright future of middle-class families and children, we will reduce the 'family burden' A policy of reviewing the income tax limit will be adopted based on the

- Institutional savings programs will be encouraged by making a legal provision to deduct a certain amount from taxable income for education, health and upbringing expenses.

- This system will be studied and reviewed with the participation of distinguished international academics, as the exchange rate with the Indian rupee has been stable for three decades.

- A one-stop service center will be implemented with a provision that no one has to visit other agencies after submitting files at one place to promote and facilitate domestic and foreign investment.

- Necessary laws, regulations and procedures will be formulated and implemented effectively for investment facilitation, and business registration will be made easy, fast and free through digital means.

- The Revenue Investigation Department will be abolished by reforming the structure of the Revenue Tribunal.

- A skilled professional unit with a majority of chartered accountants to conduct revenue investigation and monitoring will be created to control corruption.

- A 'result-oriented time-bound action plan' will be implemented to make it mandatory to complete the stalled projects of national pride within two years for Nepal's economic transformation. - In five years, not only limited to physical infrastructure, but also attracting capital and knowledge from the diaspora, 10 new diversified sector projects including an international sports city, higher education research center, specialized health services, and cultural tourism will be included in the list of 'national pride' and will be moved forward under the 'fast track' model. - The uncontrolled and weak regulation of the cooperative and microfinance sector will be replaced and the entire non-banking financial sector will be brought under the direct and powerful supervision system of the Nepal Rastra Bank. - Cooperatives and microfinance with transactions exceeding 500 million rupees will be subject to strict regulation by the Rastra Bank and the same standards as 'D' category financial institutions. A 'second-level regulator' will be formed for the systematic operation of small institutions. - Within 100 days of the formation of the government, the savings of small savers of cooperatives will be returned to their accounts. An 'Integrated Savings Security Fund' will be established by the state to protect the earnings of savers. - In order to return the money of savers, a legal path will be paved for 'Milapatra' in accordance with the policy of resolving 'not by freezing, but by listening'. – बचत फिर्ताको पूर्ण ग्यारेन्टी र समयसीमा तोकेर उनीहरूलाई थुनाबाहिरै रहेर सम्पत्ति परिचालन र ऋण असुली गर्ने अवसर दिइने

– मिटरब्याज र अनुचित लेनदेन ‘आर्थिक अपराध’ का रूपमा परिभाषित गर्दै पाँच वर्षभित्र यसका सबै जालोलाई कानुनी र संरचनात्मक रूपमा ध्वस्त पारिने

– विगतमा गरिएका सबै अवैध ‘तमसुक’ र कपाली तमसुकको न्यायिक छानबिन गरी पीडितहरूको जग्गा र सम्पत्ति फिर्ता गराउन एक अधिकारसम्पन्न ‘द्रुत न्याय कार्यदल’ गठन गरिने

– मिटरब्याजमुक्त नेपाल र वित्तीय सार्वभौमिकता सुनिश्चित गरिने

– पुँजीबजारलाई पारदर्शी, सुरक्षित र लगानीमैत्री बनाउन नियामक सुधार, प्रविधिमैत्री कारोबार प्रणाली तथा लगानीकर्ता संरक्षण संयन्त्र सुदृढ गरिने

– धितोपत्र बोर्डको संरचना पुनर्गठन गर्दै पर्याप्त जनशक्ति, कार्यक्षमता अभिवृद्धि तथा आवश्यक स्वायत्तता दिइने

– नेपाल स्टक एक्सचेन्ज (नेप्से) र सीडीएस एन्ड क्लियरिङ लिमिटेडको पुनःसंरचना गरी निजी क्षेत्रको सेयर सहभागिता बढाइने, प्रतिस्पर्धात्मक डिपोजिटरी सेवा विकास गरिने