KATHMANDU: For the upcoming fiscal year, the government drastically reduced the budget ceiling for projects involving physical infrastructure.
The Ministry of Finance (MoF) lowered the MoPIT’s budget ceiling by Rs 54 billion, according to the Ministry of Physical Infrastructure and Transport (MoPIT). The MoPIT has been given a budget of Rs 167 billion for the current fiscal year, but the threshold is only set at Rs 113 billion for FY 2023–2024.
Because of the implementation of austerity measures, according to Minister of Physical Infrastructure and Transport Prakash Jwala, the government has prioritized new projects and projects that are already under construction. He claims that rather than beginning new projects, the government has made it a priority to provide adequate funding for those that are already underway.
Budget reductions will have a negative impact on infrastructure development, according to MoPIT secretary Keshab Kumar Sharma. He claims that the ministry’s capital expenses will be reduced by about 40% under the new budget ceiling.
Due to the lack of funding with the government, Sharma claimed they have not yet received a sizable amount of reimbursement from the MoF. According to him, the MoPIT has not been able to pay the construction project contractors the approximately Rs 12 billion they are owed.
The National Planning Commission (NPC) has set the fiscal year 2023–24 budget ceiling at Rs 1.688 trillion, which is Rs 105.43 billion less than the budget announced for the current fiscal year.
Due to the inadequate revenue collection, the government has reduced the budget for the upcoming fiscal year and implemented austerity measures. The MoF develops the budget based on the NPC’s threshold.
The Kathmandu-Madhesh fast track project’s budget cap of Rs 20 billion has been maintained by the government in the meantime. To advance the national pride project’s construction, the Nepalese Army has asked for Rs 50 billion. Less than half of the requested budget will be allocated to the project, though.
The government has implemented austerity measures to reduce public spending as a result of a significant shortfall in revenue collection relative to the desired level. The revenue collection in the first nine months of the current fiscal year was almost Rs 350 billion less than the goal.
The government set a goal of collecting Rs 1.403 billion in taxes for the current fiscal year. However, as of the first nine months, the collection was only 49.29 percent of the total.