The Ministry of Finance (MoF) enforced a guideline to implement the budget for FY 2025/26 on Thursday. The 95-point directives talk about bringing into force the measures related to the fiscal discipline while utilizing the state’s fund in the new FY that commences from Thursday.  

KATHMANDU, July 18: The government has once again endorsed another guideline expressing its commitment to prudently use the annual budget approved for the current fiscal year (FY) amid its own shortfall to comply with similar standards enforced in the previous years.  

The Ministry of Finance (MoF) enforced a guideline to implement the budget for FY 2025/26 on Thursday. The 95-point directives talk about bringing into force the measures related to the fiscal discipline while utilizing the state’s fund in the new FY that commences from Thursday.  

If any government bodies seem unable to utilise the allocated funds under the prescribed headings, they will have to mandatorily surrender the budget by March end of the current FY. Likewise, the concerned offices will strictly have to remove the duplication of the budget allocation under different headings that aim for a single objective.

Despite enforcing strict rules, the government itself faces criticism almost every year for allegedly beaching its own budget guidelines. The issue of fiscal discipline surfaces mainly with the budget transfers as the fiscal year arrives to an end.

The annual report of the Office of the Auditor General (OAG) also shows that there are massive budget transfers conducted by the government offices almost every year. Likewise, the MoF itself accounts for the maximum of arrears revealing the largest amount of the non-transparent expenses. In 2023/24, out of the identified arrears of Rs 733 billion, the MoF accounted for the largest of Rs 33.71 billion.  

Under the new guideline implemented from Thursday, government offices are not permitted to make additional procurement even from the surplus amount remaining after utilizing funds allocated for specific tasks. The sub-national governments are also mandated to utilize the grants they received from the central government only under specified headings.   

The MoF has fixed a threshold for the budget transfer amount at maximum of 25 percent of the disbursed amount. To carry out the budget transfer, the concerned government agencies will have to revise their pre-determined programs by mid-January.   

The contractors will have to receive the government permission if they have to sub-lease their construction works. Likewise, the sub-lease can be done at more than one stage only for the very essential construction works. The quality testing of the contracts worth more than Rs 100 million must be verified by National Vigilance Center.  

The contractors will be liable for maintenance of the completed projects worth over Rs 50 million for the next five years. The funds for the multi-year contract projects must be managed from within the allocated budget.