There is a difference of opinion between the government and the Ministry of Finance on whether to maintain fiscal discipline by cutting spending in unnecessary areas in the Madhesh Province government or continue fiscal mismanagement.

In order to stop the trend of spending a lot of budget only in the last month of the fiscal year (Asar) and working just to complete the budget, Finance Minister Yubaraj Bhattarai of the Madhesh Province government had decided to cut the budget in some areas on 26 Jestha. Instructions were issued to all ministries and subordinate bodies to implement the decision. However, a dispute has arisen between the government and the Ministry of Finance after the Council of Ministers meeting held on 22 Ashar reversed the decision. The Finance Minister was not present at the Council of Ministers meeting.

The Ministerial Decision of the Ministry of Finance on 26 Jestha stated that no new projects worth less than 1 million rupees would be implemented, only payments for projects that have been agreed upon by 25 Jestha would be made, and payments for projects that have been agreed upon would be stopped thereafter. The Ministry of Finance says that this step was taken to prevent uncontrolled spending and distortions of piecemeal plans at the end of the fiscal year.

But the decision was overturned by the Cabinet meeting on Friday, with the Chief Minister and other ministers taking advantage of the fact that Finance Minister Yubaraj Bhattarai and Finance Secretary Sevantak Pokharel were in Kathmandu. After Chief Minister Krishna Prasad Yadav brought a single proposal in the Cabinet meeting, it was decided to direct the Finance Ministry to spend a budget of less than 1 million rupees in the current fiscal year, said Home, Communications and Law Minister Fakira Mahato.

‘The only decision taken in the Cabinet was to revoke the decision made by the Finance Ministry on 26 Jestha,’ Mahato said, ‘It will be done according to the rules and regulations. Now the decision of the Cabinet meeting will be taken in the Finance Ministry.’ Minister Mahato belongs to Finance Minister Bhattarai’s party, the NCP. There are four ministers from the NCP. Minister Mahato said that all of them, except Tourism Minister Kanish Patel, were present at the meeting. Chief Minister Yadav said that the Cabinet meeting was called and that he went because he was in Janakpur. ‘Whatever decision has been made must have been made legally,’ he said, ‘I am a person who follows the wishes of the people rather than the party.’

Nearly 3 billion rupees had been allocated for projects under 1 million rupees that had to be spent by mid-Ashar of the current fiscal year 2082/83. Finance Minister Bhattarai had completely restricted such funds. ‘It is my effort to stop wasteful expenditure in the name of travel, purchase of new vehicles, maintenance, grants and monitoring,’ Bhattarai said, ‘I have tried to maintain good governance. But my friends have overturned the finance decision. I have not received the details.’

After the change in the ruling coalition, Finance Minister Bhattarai, who is also the leader of the parliamentary party of the NCP, who took charge of the Finance Ministry of Madhesh, had taken strict steps to prevent irregularities at the end of the fiscal year by making a ministerial decision on 26 Jestha. According to the Ministry of Finance, decisions have been made to not implement small and fragmented schemes worth up to Rs 1 million, to pay only for schemes that have been agreed upon by 25th Jestha, and not to pay for any schemes that have been agreed upon or are yet to be agreed upon after 25th Jestha.

A circular was issued to the Ministry, Secretariat, Commission, Foundation and other bodies to implement the Finance Ministry's decision, directing them not to implement schemes worth up to Rs 1 million. It was also said to pay only for schemes agreed upon by 25th Jestha.

The Ministry of Finance claims that this decision was taken to prevent indiscriminate expenditure and distortion of fragmented schemes with the intention of completing the budget in the last month of the current fiscal year. As soon as Finance Minister Bhattarai's decision was made public, other members of the Council of Ministers and MPs of the ruling party were dissatisfied. Ministers were opposing the Finance Minister's move, saying that stopping small schemes in their constituencies at the end of the fiscal year would send a negative message to the public. This decision of the Council of Ministers will result in an arbitrary increase in expenditure and the continuation of suspended programs such as training seminars.

Chief Minister Krishna Prasad Yadav claims that the decision had to be reversed by the Council of Ministers because stopping small schemes will bring development to a standstill and the needs of the people will not be met. ‘We have decided only for those schemes that are below Rs 1 million, and we cannot do without them. There will be no fragmented schemes from the new fiscal year,’ he said, ‘There are many small schemes that are in the interest of the people. The decision has been made for them. There is agreement on this with all the friends of all the parties in power.’

In Madhesh, there have been allegations that a consumer committee was formed at the end of the fiscal year (Asar) to distribute the budget to fragmented schemes smaller than Rs 1 million and widespread corruption is taking place. Finance Minister Bhattarai had tried to attack this fragmented culture. But amidst the fluid politics of Madhesh and the pressure to preserve power, Chief Minister Yadav seems to have prioritized political management over good governance.

According to the working procedures of the Council of Ministers, the presence or consent of the concerned minister is considered mandatory when reversing a policy decision related to the Ministry of Finance. But this decision, made in the absence of Finance Minister Bhattarai, has reaffirmed how weak and unreliable the alliance within the Madhesh government is.

Tourism Minister Kanish also claimed that the decision was not made in the budget for the new fiscal year, but only for small projects that were already allocated at the end of this fiscal year and that should not be done.

According to the decision of the Ministry of Finance to cut unnecessary expenses, it is mentioned that the remaining amount spent since 25th Jestha will be reduced by 30 percent from the budget allocated under the heading of Masaland and office supplies, and the remaining amount under 12 headings including tours, newspaper printing, maintenance of public property, program expenses, tree plantation, and others will be reduced by 50 percent.