NPC urges prudent budget formulation for FY 2025-26
KATHMANDU: The National Planning Commission (NPC) has advised the government to formulate the budget for Fiscal Year 2025-26 within a predefined ceiling, ensuring resources are secured for mandatory obligations while prioritizing projects based on available funds.
In a report submitted to Deputy Prime Minister and Finance Minister Bishnu Paudel on Sunday, NPC Vice-Chairperson Shivraj Adhikari emphasized the need to address the issue of limited resources by significantly cutting budgets for underperforming programs with low capital expenditure.
The report, prepared under the Economic Procedures and Fiscal Accountability Act, 2076 BS, recommends evaluating stalled or incomplete projects and prioritizing, suspending, or canceling them based on national interest to allocate funds for essential programs. With overall resource constraints projected for the upcoming fiscal year, the NPC stresses efficient resource management to mitigate fiscal challenges.
To ensure equitable development, the report calls for budget proposals that maintain provincial balance and foster coordination across federal, provincial, and local levels. It advocates for clear criteria in distributing development projects and allocating conditional grants to provinces and local bodies to avoid duplication. The NPC also advises against creating new institutional structures, urging the government to maximize the use of existing ones.
Adhikari highlighted that the NPC held extensive discussions with the Finance Ministry, line ministries, and other stakeholders to prepare the report. “We didn’t just consult the Finance Ministry and relevant ministries; we facilitated inter-ministerial coordination to strengthen collaboration,” he said. “This approach ensures programs are proposed with minimal conflicts and enhanced coordination during implementation.”
The NPC’s discussions focused on policies to expand expenditure capacity and fiscal discipline. “Given the limited growth in revenue, we prioritized clearing past liabilities and completing ongoing or incomplete projects,” Adhikari noted. The commission also explored alternative revenue sources in consultations with ministries.
The report prioritizes projects and programs that boost production, productivity, and job creation, urging the government to allocate budgets only for initiatives that can be realistically implemented in the upcoming fiscal year. It emphasizes funding for multi-year projects nearing completion and those with existing liabilities to ensure timely execution.
As Nepal grapples with fiscal constraints, the NPC’s recommendations aim to streamline budget allocation, enhance inter-governmental coordination, and focus on high-impact projects to drive sustainable development.
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