Kathmandu, Sept. 24
The government has announced a series of
budget control measures aimed at improving fiscal responsibility and ensuring
the efficient mobilisation of public funds.
The directives issued by the Ministry of
Finance (MoF) on Tuesday, as per the Cabinet decision on Sunday, focus on
curbing unnecessary spending and prioritising strategic projects.
According to the new guidelines, budgetary
support will be assured to the projects that have already received source
approval. However, no new,
small-scale, or redundant projects will receive funding unless they align with the
national priority objectives.
As per Section 21 of
the Economic Procedures and Financial Accountability Act 2018, all new or
unprepared projects within the capital expenditure framework will be locked to
prevent unnecessary duplication or misallocation of funds. Similarly, any
budget that remains unused due to a lack of identified projects, particularly
under general categories such as ‘miscellaneous’ or ‘other’, will also be
locked.
The government has
also taken steps to ensure that small, fragmented projects that could be better
handled by provincial and local governments will not be funded from federal
resources. Likewise, any liabilities incurred in the previous fiscal year but
left unpaid will be given priority, with budget locks lifted to settle
outstanding payments, if needed.
In a move to safeguard
national priority projects, the MoF has stated that funds can be transferred
from locked budget sub-headings to support projects with approved sources of
funding, particularly those that have created or are expected to create
liabilities within the current fiscal year.
This flexibility also
covers the national priority projects, even if their allocation is currently
insufficient.
Likewise, when
rebuilding government structures, a new emphasis will be placed on creating
service-user-friendly, open, and well-planned spaces that accommodate the
nature of work and staff requirements.
Consumer committees
scrapped
In a significant move,
the MoF has prohibited consumer committees from implementing projects exceeding
Rs. 1 million.
Similarly, various
austerity measures were introduced to control unnecessary expenditure and improve
fiscal discipline across all levels of government. They include allowances,
consultancy services, and organisational structures.
One of the most
significant changes involves a crackdown on allowances. From now on, regular
meeting allowances will not be provided to officials and employees of public
bodies for their routine duties. However, allowances can still be given for
meetings held outside of office hours for legally established committees.
Furthermore, officials
who reside in private residences, either owned by themselves or their families,
will no longer be eligible to receive accommodation allowances.
Control on
consulting services
The government has
also imposed stricter controls on the use of consulting services. Funds
allocated for work that can be performed by existing staff will not be used to
hire external consultants. Similarly, consulting services can be procured for capital
research and consulting services, not for drafting bills, rules, regulations,
guidelines, and similar tasks.
The new measures
mandate that all government offices should manage service expenses – particularly
for water, electricity, and communication fees – more economically. Employees are
instructed to ensure that electricity-consuming devices such as lights, air
conditioners, and fans are turned off when not in use.
Install offices in
modest areas
Government offices are
restricted to renting houses with more facilities than necessary and refrain
from renting in commercial areas or along main roads. This policy applies to
both domestic offices and diplomatic missions abroad, where lease renewals
should prioritise modest housing options.
The government has
also prioritised the use of old government vehicles, furniture, and electronic
equipment. Federal, provincial, and local governments are required to use
existing resources, such as old vehicles, mobile phones, computers, and
motorcycles.
Similarly, government
offices affected by the Gen Z movement are to receive necessary office
equipment and furniture through transfers from nearby offices. The government
has also initiated plans to insuring physical government structures to ensure
their long-term sustainability.
No new hiring
In an effort to
streamline government operations, the government said that no new positions
will be created, except in essential technical roles. To avoid long-term
liabilities, expert services and consultancies should replace the creation of
permanent positions. Ministries such as Finance, Home Affairs, and Foreign
Affairs, which have recently undergone organisational surveys, will also
undergo brief reviews to eliminate unnecessary structures and positions.
Likewise, the
government also plans to abolish redundant commissions, such as the Land
Problem Settlement Commission, and make structural changes to enhance national
security and improve revenue collection.
The restructuring
includes integrating certain departments, such as the National Investigation
Department and the Revenue Investigation Department, under the Ministry of Home
Affairs and the MoF, respectively.
Further austerity
measures have been implemented to reduce current expenditure with a provision
to restrict the non-essential training, workshops, and seminars, and conduct
trainings online or at the government facilities. International travel will be
limited to essential government representatives, with delegations to
international conferences set at 10 members for heads of state and three
members for other delegations.
The government has
also said that public sector investments will now be restricted to profitable
or foreign-aid-funded projects. No new investments will be made in financially
weak public corporations, and government-invested corporations will be
prohibited from issuing rights shares or further public offerings during this
period.
As per the new
guidelines, no new vehicles will be purchased for official use unless existing
vehicles are insufficient for critical tasks, such as conducting elections or
ensuring security.
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Provinces must follow
austerity rules: FM Khanal
Biratnagar, Sept. 24
Finance Minister Rameshore
Prasad Khanal has said that the austerity directives issued by the Ministry of
Finance (MoF) on Tuesday must also be implemented by provincial and local
governments.
Amidst growing
dissatisfaction among provincial ministers who have raised concerns that, as
autonomous and independent bodies, provincial governments are not obligated to
implement decisions made by the federal Cabinet without passing their own laws,
Minister Khanal stressed that the decisions of the Cabinet must be followed by
all.
While visiting the
Internal Revenue Office in Biratnagar, which was destroyed in a fire, Minister
Khanal briefly responded to questions from the media, reiterating the need for
everyone to cooperate in adhering to austerity measures.
The federal government’s
decisions have raised uncertainty about the facilities for those appointed by
provincial assemblies through provincial laws.
In response to the
federal government's decision, Rewati Raman Bhandari, Minister for Internal
Affairs and Law of Koshi province, said that from a constitutional and legal
standpoint, provincial governments are not bound to follow the federal
government’s decision. He argued that the provinces have the autonomy to make
their own decisions, and if changes are needed in provincial laws, they must be
amended accordingly.
However, FM Khanal
clarified that this decision was made for austerity purposes and must be
implemented across all levels of government, irrespective of provincial laws.
"This decision has been taken for austerity, and being a federal Cabinet
decision, it applies to all bodies. No expenditure should be made from the
federal government’s grants on these matters," he said.
Minister Khanal further
elaborated that even if appointments are made according to provincial laws, any
expenses for these positions, which are funded by federal grants, should not be
used for unnecessary appointments.
Minister Khanal indicated
that while the federal government’s decision does not nullify provincial laws,
it could impose restrictions on how federal grants are used.
Published in The Rising Nepal daily on 25 September 2025.
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