Finance Minister Prakasharan Mahat was present during the presentation of the principles and priorities of the budget for the current fiscal year 081/82, while Finance Minister Varshman Pun was present during the presentation of the budget. Finance Minister Bishnu Paudel is present during the implementation of the budget. There is no country in the world where the Minister of Finance is from different parties when the priorities are submitted, when the budget is brought and when it is implemented.

This is also a problem in Nepal's political stability. It conveys the message that improvement is wanted/sought. 

The main objective of the CPN-UML and NECA government is to amend the constitution for political stability. Since the main goal of the government was to amend the constitution, the debate had to be conducted from different angles. However, there is no clue yet. In the debate on the amendment of the constitution, there is a need for reform in the method of budget formulation. The article focuses on budget formulation. 

According to the constitution, every year on the 15th of May, the Minister of Finance must submit the annual estimate of revenue and expenditure to the joint meeting of both houses of the Federal Parliament, including the revenue estimate, the necessary amounts to be charged to the Federal Reserve Fund and the necessary amounts to be spent according to the Federal Appropriation Act. The finance minister has to go through various steps before submitting the budget to the parliament. 

Each ministry should prepare a medium-term expenditure structure for the next three financial years and send it to the National Planning Commission and the Ministry of Finance. The Planning Commission should prioritize the project or program by opening the activity details of the proposed project or program, the estimated cost per unit, and the results obtained from it. 

The role of Planning Commission is important here. It depends on the Commission's decision on which projects and programs to prioritize. However, the Planning Commission has failed in this matter. He has not been able to perform his role. 

Commission, in coordination with the Ministry of Finance, should make a pre-estimation of the resources available in the next three years and the limit of possible expenses for the purpose of formulating the medium-term expenditure structure and the budget and program for the next financial year by January 15th of the current financial year.

The law provides for a National Resource Estimation Committee chaired by the Vice Chairman of the Commission for the purpose of resource estimation and expenditure limits. There is provision for members of the Resource Committee including the Governor of Nepal Rastra Bank, the Secretary of the Ministry of Finance, the Controller General of Accounts.

The resource estimation committee estimates the total national resources of the union, state and local levels for the next three financial years based on the projected investment and financial requirements in the periodic plan. After estimating the resources, the expenditure limits should be determined keeping in view the current year's medium-term expenditure structure. The team led by the vice president of the commission has the right to estimate the resources of not only the federal government but also the state and local levels. In some countries, including Germany, only the Budget Committee of the Parliament has such authority. 

The resource committee has the authority to give ceilings on estimated budgets to ministries. However, the recommendation of the resource committee has been ignored. According to an official of the commission, the ceiling of the Ministry of Urban Development in the current year was 66 billion rupees. But when the budget came, it became 92 billion 60 million.  Medium-term expenditure structure should be considered as the basis while formulating the

budget. In Nepal, the tradition of creating a medium-term expenditure structure has been started since the 10th Periodic Plan (2059-65) to maintain consistency between the periodic plan and the annual program. For the first time in Nepal Such expenditure structure has been started since 059/60. Legally, the validity of this method was found in the Intergovernmental Financial Management Act. Likewise, the Economic Procedures and Financial Responsibility Act has further strengthened its justification and necessity.

There will be a steering committee under the chairmanship of the vice president of the Planning Commission for the overall direction of the medium-term expenditure structure. The members of the commission and the secretaries of all the ministries remain in this committee. When the government submits the estimate of income and expenditure (budget) to the parliament, it must also submit the medium-term expenditure structure with the projection of expenditure for three financial years. The budget should follow the medium-term expenditure structure. However, an official of the commission says that only after the budget speech, the team of the commission will start building the medium-term expenditure structure. 

The law has empowered the commission in the budget making process. However, the commission officials have complained that the Ministry of Finance is walking alone. The Constitution has strengthened the National Natural Resources and Finance Commission. However, the commission complains that the law has curtailed the authority of the finance commission.

The Planning Commission, subject to resource and expenditure limits, should mention the budget limit, medium-term expenditure structure outline for the budget formulation for the next three years, and send the guidance and framework for budget formulation to the relevant ministries, commissions, secretariats or agencies by the end of January of the current financial year. The ministry should prepare a budget proposal with the policy and program of the coming year for itself and its subordinate offices or agencies in the prescribed format under the budget limit and guidance and send it to the Planning Commission and the Ministry of Finance within the time specified in the budget limit and guidance.

The budget estimate prepared and sent by the relevant ministries and agencies, especially the program expenditure towards current expenditure, capital expenditure and financial management, is discussed in an operational and organizational manner in the National Planning Commission and the Ministry of Finance.

There is also a provision that when a ministry or agency requests a budget, the division of labor regulations of the Government of Nepal should be considered as a special basis. However, based on the budget formulation of the last 7 years, more than half of the ministries have not adopted the regulations. For example, the Ministry of Physical Infrastructure has areas including national roads. However, including this, almost all the development ministries have merged the jurisdiction of the provincial and local levels.

plans and programs of thousand/lakh rupees have been kept. Here too, the Planning Commission has failed. So far, the commission has not informed the ministries in writing or verbally that they are proposing plans beyond the guidelines given by the commission. When I was an MP, there was a lot of conflict with most of the ministers in the Parliament regarding the random distribution of plans, division of jurisdiction at the state and local levels.

The Ministry of Finance proposes a budget for the upcoming fiscal year based on the budget discussion and evaluation and analysis of the proposed budget and program. However, there is also a legal provision that after discussing the plans and programs of all relevant ministries, the Commission should submit its report to the Minister of Finance. However, there is a situation where the Planning Commission has not fully utilized its legal rights. 

There is also a legal provision that the government of Nepal should consult with the National Natural Resources and Finance Commission and send the financial equalization and revenue distribution details to the provinces and local levels in the coming year by the middle of February. There is a complaint from the state and local level that this system is not properly followed. Commission officials say that the results of the financial transfer are not even in compliance with the constitutional provisions set by the Finance Commission. 

The Minister of Finance must submit the details of the principles of the budget and programs and the priorities of the projects or programs to the federal parliament 15 days before submitting the budget to the parliament. The then Prime Minister Pushpa Kamal Dahal brought an ordinance to submit the principles and priorities of the budget 3 months before the presentation of the budget. Based on the

ordinance, the pre-budget discussion of the current A.W. was held last February. In which I also participated. In order to absorb the sentiments of the MPs, an ordinance was introduced to submit the pre-budget 3 months in advance. However, later the ordinance became inactive because it was not passed in time. 

Without the prior consent of the Ministry of Finance, no body should make a commitment to spend in such a way as to create a multi-year liability. There is a provision in the law that the Nepal government will make the classification of the projects carried out by the Nepal government at the union, state and local levels on the recommendation of the Planning Commission. The norms regarding this have been approved by the Council of Ministers.  According to

standards, the federal government can't organize smaller infrastructure projects than 30 million. Ministries have not followed this arrangement. Like, according to the news of Kantipur Daily on June 5, the Ministry of Urban Development has Rs. There are 99 projects worth 1 lakh. Similarly, there are 626 schemes worth Rs 5 lakh in the Ministry of Physical Infrastructure. Last year, there were 2,829 plans in the Ministry of Physical Infrastructure.

which had 1490 up to 5 lakhs. Of the total 7,177 plans of the Ministry of Urban Development, 98 percent were up to 5 million. In the scheme up to 5 million, 84 percent were in the Ministry of Water Supply and 99 percent in the Ministry of Sports. It is the job of the Planning Commission to bring the ministries under control regarding projects and programs. But the commission itself is innocent.

Ministries that are supposed to run national level plans are ashamed to have lakhs of plans. The constitution and the law are also sharp. In this regard, I even called some of the ministers in the Parliament as ``Rana of the Republic'' who seriously violated the constitution and laws. 

After the budget is approved, there is a provision in the law that the related agencies can spend even if they have not received authorization from the Ministry of Finance. However, if the approved budget is for more than one ministry or office, within seven days, the relevant agency should be given the authority to allocate the resources with the results and achievements to be achieved. 

If the amount allocated under one ministry or agency has to be spent through an office under another ministry or agency, the secretary of the agency to which the allocation is made must grant the authority to spend it to the secretary of the relevant agency ministry or agency. The head of the concerned office will be responsible for disbursing and spending the funds allocated or distributed in the name of the concerned office, keeping accounts, reporting, conducting audits, and making the necessary allowances. 

Every office should include an annual procurement plan, monthly cash flow statement, achievement measurement indicators and implementation schedule while implementing the budget. Similarly, for the implementation of the budget and program, the head of the department or the person in charge must sign a performance agreement with the secretary and the head of the office or the person in charge must sign a performance agreement with the head of the department. 

According to the daily budgetary financial of the Comptroller General's Office, the expenditure till the end of January is 35.89 percent. The total development expenditure is 16.16 percent. According to the general principles of economics, spending/increasing means an increase in income and employment along with an increase in economic activity. However, ministries are not ready to implement plans and programs on time. The state and local level should increase the equalization grant and say that there are no resources, even if the authority is cut, but no restrictions are imposed even if the ministries of the Singha Darbar are doing their best. 

The Ministry of Finance must publish the semi-annual evaluation report of the entire implementation aspect of the budget within the middle of January of every year and the annual evaluation report within four months of the end of the financial year. The Intergovernmental Finance Management Act stipulates that the government of Nepal should prepare integrated financial statements based on the financial statements of provinces and local levels and make them public by the end of January of each year. 

All government offices at union, state and local levels should prepare and implement internal control systems. In order to manage the internal control system, there is an internal control committee in every agency. The committee will efficiently and frugally perform the tasks performed by its agency and make it result-oriented, reduce financial risk, make the financial statement reliable and make the internal control system stronger and more effective by correcting the irregularities established by the audit. 

Based on the regularity, frugality, efficiency and effectiveness of the transactions of each office of the Government of Nepal, the internal audit is done by the Office of the Controller General of Accounts or the Office of the Controller of Funds and Accounts designated by that office. The state and local levels should also conduct internal audits. Every office must submit the prescribed accounting and financial statements of all types of income and expenditure and transactions and get the final audit from the Auditor General's office. 

Budget formulation and other relevant bodies should know about the topics mentioned in the article. The opposition parties should also raise their voices in the parliament on this issue. However, this issue has not been discussed much. In terms of constitutional amendment, there is a need to improve the date of submitting the budget to the parliament. First of all, it is necessary to have a system to submit the budget of the local level, then the state and finally the budget of the government of Nepal.