Government reviews and evaluates current fiscal year’s budget

KATHMANDU: The government has presented a review and evaluation of the budget for the current fiscal year. Assessing the implementation of the budget and revenue collection status up to the last month, the government has projected expenditures and revenues for the upcoming months.

The current government, which succeeded the previous Maoist-led administration that introduced this budget, has analyzed that the size and scale of the budget are disconnected from ground realities. The government has prepared a review report with comparative data showing improvements in most indicators compared to the previous year. However, it estimates that the allocated budget will not be fully spent and that revenue collection will also fall short of expectations.

The government estimates that Rs. 1.692 trillion will be spent this year, approximately 91% of the allocated budget . Similarly, revenue collection is projected to be lower than the target, at Rs. 1.286 trillion , compared to the initial estimate of Rs. 1.419 trillion for the year.

Although there has been marginal improvement in the economic situation, overall, achieving the expenditure and revenue targets of the budget has remained a significant challenge over the past few years. Specifically, for the last seven years, the problem of under-spending and insufficient revenue generation has persisted. Each year, reviews are conducted during the final five months, adjustments are made, and issues related to underspending are highlighted, but they remain unaddressed, creating a repetitive cycle. This issue has become more of a procedural formality rather than a solution-driven process.

Despite political changes and stronger governments, this problem has remained unresolved. However, Finance Minister Vishnu Poudel claims that this year will be different. He states that when the current government was formed, reviving the economy was identified as the primary responsibility, and efforts have been ongoing toward that goal. According to him, the results of the government’s efforts are beginning to show, with improved revenue growth rates visible.

In the last five months of the current fiscal year, revenue has increased by 10% compared to the same period last year. With revenue growth and some improvements in public spending, the finance minister is confident that the economy can be kept moving forward.

The government itself has acknowledged the ineffective implementation of the budget. However, the trend has been to acknowledge the issue every year during the last five months without making meaningful reforms.

“But now, things will be different,” says Finance Minister Poudel. “Everyone agrees that ineffective public spending is our main problem. Now, we are actively identifying the root causes and exploring ways to increase spending. The government has even formed a commission to conduct in-depth studies on the matter. We aim to resolve these issues and move forward.”

The current political equation in the country is being seen as the ‘last resort’ to address growing public frustration. Even mathematically, the strong coalition government is expected to drive effective budget implementation and usher the country into a new phase of economic reform. Vice Chairman of the National Planning Commission, Prof. Dr. Shivraj Adhikari, emphasizes that the government is working on comprehensive reforms to achieve this goal.

Having consistently failed to meet expenditure and revenue targets, the government has announced measures to ensure effective spending and judicious resource management starting from the preparation of next year’s budget.