Here are some key highlights about the budgetary planning for ‘Nepal Federal Budget 2019-20‘:

Budget 2019-20: Government Allocates NPR 1 Bn for Youth Development

In the latest update on the upcoming fiscal budget, the Nepal Government is all preparing to initiate a special youth program worth NPR 1 Bn.

Through this program, Nepali youth can file applications for the required budget for businesses of their interest.

The government has set a budget ceiling of around 1.5 trillion for the upcoming fiscal budget, which will be announced on May 29, 2019. It has allocated a budget of NPR 25. 24 billion for the Ministry of Agriculture and Livestock Development.

NPR 25 Bn for Agriculture

The Ministry of Agriculture, Livestock Development also submitted its budget proposal for the Federal Budget 2019-20. It has submitted NPR 25.24 billion as its planned budget for the FY 2019-20 (2076-77) at the Ministry of Finance.

With this proposal, the Agriculture sector accounts for 1.68 percent of the total national budget for FY 2019-20 if the government closes the budget within NPR 1.5 trillion.

According to Minister Chandrapani Khanal, this budget is only for the agriculture budget at the federal level.

The government has allocated the annual budget of NPR 40.14 billion for the Ministry of Agriculture, Land Management and Cooperatives, for the current fiscal 2018-19.

Infrastructure Eyes NPR 137 billion

With the government preparing for the Federal Budget FY 2019-20, here comes an interesting update about the infrastructure spending in the coming fiscal.

As part of the budgetary planning, the Ministry of Physical Infrastructure and Transport is expecting NPR 135 billion as its budget for the coming fiscal.

With the new projection, Nepal’s infrastructure budget for 2019-20 stands 35 percent more than the allocation made for Budget FY 2018-19.

As the reports say, the Ministry is also thinking of tweaking its budgetary expectations in line with the National Planning Commission’s budgetary ceiling for individual ministries.

The Ministry is also planning to allocate more than NPR 90 billion to the projects drawn from the previous year.

The Ministry’s majority investment is likely to be on road projects in line with the government’s plan for national pride projects.

Allocations for the Postal Highway and the Pushpa Lal Mid-Hill Highway projects are likely to be doubled this year.

Railway projects are also among those set to receive sizable budgets.

Total Planned Budget at NPR 1.5 Tn

As Nepal draws closer to the end of FY 2018-19, the Nepal Ministry of Finance (MoF) has started work for the formulation of upcoming FY 2019-20 federal budget in full swing.

According to MoF Joint Secretary Uttar Kumar Khatri, the Ministry has intensified works for the budget formulation process.

“We are formulating the budget for the upcoming fiscal year within the ceiling and guidance provided by the NPC,” said Khatri, also Finance Ministry Spokesperson.

According to a National Planning Commission (NPC) official, the commission has provided a budget ceiling of around NPR 1.5 trillion for the upcoming fiscal budget.

Now that all the ministries have been informed of the upper ceiling limit, they are working on finalizing their programs and related budgets to be included as part of the new budget.

They will then submit their reports to MoF through the Line Ministry Budget Information System (LMBIS).

Khatri stated that the various committees including MoF’s budget drafting committee and revenue advisory committee are also holding consultations and discussions for the budget.

“The budget drafting will be completed on time and tabled in the parliament as per the constitutional requirement,” Khatri added.

The constitution mandates that the Nepal Government table the bill for the upcoming fiscal year by Jeshta 15, 2076 (May 29, 2019).

Budgetary Execution Remains Challenge

Though MoF has been planning the budget, the management of the Federal Budget for FY 2018-19, especially the spending, has remained weak similar to the previous years.

As per the Financial Comptroller General Office’s data, the capital expenditure progress is only 34.87 percent in the current fiscal. Out of NPR 313.998 billion allocated for capital expenditure, the government spent only NPR 109.49 billion as of April 14, 2019.

Considering the slow spending figure of the first two quarters, MoF lowered the spending projection to 91.2 percent of the total budget introduced in mid-July 2018.

It is noteworthy that the country landed some major developments in the current fiscal despite the underspending in FY 2018-19. This is evident in the formulation and implementation of some important laws and some remarkable achievements for the Himalayan nation.

NPC member Min Bahadur Shahi said that the Government will make time-bound plans for the completion of those development projects moving at snail’s pace.

“We will have result based projects in the budget of the upcoming fiscal year. Based on that system, those ministries who do not have capacity to spend certain percent of the budget will not be allowed to make additional budget demand from the next fiscal year,” added Shahi.

Govt’s Plans for FY 2019-20

Nepal Federal Budget FY 2019-20 will be the second budget of the Nepal Communist Party Government.

While the government has been dealing with underspending, it plans to increase the handouts for elderly citizens from the upcoming fiscal year. This decision was announced by PM Oli on April 14, 2019.

In terms of five-year planning, NPC has projected a planned investment of NPR 9,246 billion for the country’s 15^th Five-year development plan.

The country will spend this amount over the next five years period to achieve a targeted average growth rate of
9.6 percent per annum.

Last year, the Finance Ministry had presented a budget of NPR 1.31 trillion in the Federal Parliament.

Stay Tuned for more fresh updates on ‘Nepal Federal Budget 2019-20’

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The meeting is being held to evaluate his own government’s performance and will continue until November 23, 2018, as revealed by officials familiar with this process.

It will give Oli the time needed to weigh his ministers works who will be under the scanner for alleged financial irregularities, accusations of being responsible for the administration’s growing unpopularity and poor performance.

Oli’s Row of Questions
When the meeting started on November 21, 2018, Oli said that his ministers work culture has not improved at the top level and that he will not listen to any ‘ifs’ and ‘buts’ from the cabinet ministers, a secretary present at the meeting shared.

“Why does it take months to shift one file from one government entity to another? I urge you all to work for visible change and results,” Oli further questioned.

As part of the Wednesday meeting, Oli evaluated Agriculture, Energy, Industry and Urban Development Ministries and the National Reconstruction Authority based on the progress reports they presented.

PM Oli has been going through each ministry’s report card and rating them based on their performance.

He continued to review budget expenditure, large infrastructure projects progress and if these ministers met policy and budget targets.

Ministers pointed at lack of inter-ministerial coordination and internal hiccups for failure of meeting budget expenditures in the previous four months.

Clearly displeased, Oli urged ministers to ensure the fulfillment of outstanding policy, program and budget targets along with increasing speed of work, Finance Minister Yuba Raj Khatiwada informed.

“I do not see any budgetary problems in carrying out and implementing projects,” Oli angrily questioned according to one of the secretaries.

He further asked the concerned ministers to inform him if the cabinet, ministers, secretaries or any laws and regulations were causing any delays.

“Why has there been no progress? Whatever the reasons are, we need results. I urge you not to be satisfied with the work you have done so far,” he asked.

The Prime Minister’s Office developed an app that monitors and evaluates various ministries projects.

As per the app, Ministries with above 80 percent progress rating get a green signal, 80-50 percent get a yellow signal and below 50 percent- red signal indicating their failure to achieve progress.

“I do not expect any red signals,” Prime Minister Oli said.

Poor Capital Expenditure
The government expressed displeasure with Nepal’s capital expenditure status in the first four months of FY 2018-19 after it was criticized for poor performance.

According to Finance Minister Yubaraj Khatiwada, about 19 percent of the capital budget was spent in the given period, which was close to 39 percent in the same period, last year.

“Although capital expenditure has increased, we are still not satisfied,” he said after a meeting with ministers and secretaries of development-related ministries today at the Office of Prime Minister and Council of Ministers.

“Since the capital expenditure in the first four months of the last fiscal was poor due to elections, the 39 per cent increase in expenditure this year was not satisfactory,” Khatiwada added.

To address this, Khatiwada said that the government is planning to address all obstacles capital expenditure by mid-December and achieve the targeted expenditure by the end of FY 2018-19.

Khatiwada added that his ministry would not entertain funds demands from various sectors. “We shall only address rational demands,” Khatiwada said.

Nepal lawmakers and political leaders were depending on funds from the finance ministry to implement their pet projects in their respective constituencies.

Khatiwada shared, ministries also seek additional budget despite being unable to spend the allocated budget. “This should be discouraged, we should not allocate funds to programs that have not been included in the annual budget announcement. It will not be fair to taxpayers and donors,” he said.

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Even two days after Dashain, government offices continue to see a low attendance from civil servants and government officials.

Singha Durbar

Civil servants have not returned to duty in Singha Durbar, Nepal’s main administrative building and its departments.

Several ministries secretaries, joint-secretaries and lower-level staff were absent on October 22, 2018. Moreover, chambers of ministers and high-ranking officials remained closed.

“I could not serve tea and water to my guests as my staff have not returned from holidays,” said a senior official at Singha Durbar.

Luckily, senior officials who did not participate in Dashain festivities and who live close to Kathmandu were able to attend office on October 21 and 22, 2018.

Ministry of Federal Affairs and General Administration Secretary Dinesh Thapaliya said Junior officials and staffers were yet to return from festive celebrations. “Civil servants are gradually joining office; the festive mood is not over yet,” Thapaliya added.

Department of Passport

Noted as one of the busiest premises in Nepal, the Department of Passport (DoP) processes over 1,000 passports and receives almost the same number of applications in a day.

Unfortunately, on the first day after Dashain the office received 330 applications which further increased to some more until October 22, 2018. The office at the time had few staff.

Department of Transport Management

The Department of Transport Management’s license section received a few service requests. However, there were even fewer government officials to cater to these requests.

Overall, officials said that the service delivery was not badly affected as the demand after festive season was low.

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