KATHMANDU, Oct 9: The government has decided to prioritize a realistic and credible budgeting approach over populist measures by aligning project management and annual budget preparation with national-level policies.
Through the endorsement of the third five-year strategy on public financial management reform, the Ministry of Finance (MoF) has introduced a set of measures aimed at restoring public trust in the government’s budgeting process. The new strategy will be implemented through 2030, according to the ministry.
The strategy focuses on strengthening budget credibility, improving implementation and monitoring, reforming revenue management, enhancing intergovernmental fiscal coordination, managing public debt and financial risks, improving asset management, and ensuring greater accountability. It also seeks to guide reforms in fiscal policy, revenue mobilization, budget formulation, and debt servicing.
Govt promises a realistic budget amid concerns of its distribut...
At a time when the government has often been criticized for introducing populist budgets, the administration led by Prime Minister Sushila Karki has expressed its commitment to making the budget more realistic and evidence-based. In recent years, the government has frequently missed its revenue collection targets while cutting down expenditure for various programs during mid-term reviews.
According to the MoF, the main objective of the reality-based budgeting system is to create a practical and actionable financial plan that reflects the country’s economic reality and ensures better implementation. The ministry has prepared several guidelines to support annual and medium-term reforms in budgeting practices.
Finance Secretary Ghanashyam Upadhyay said the government aims to set achievable revenue targets while maintaining prudence in spending. “For this purpose, the government will frame economic impact assessments to evaluate how expenses under different headings contribute to overall growth,” he said.
The new strategy also emphasizes expediting budget implementation and ensuring the optimum use of state resources. Strengthening accounting systems, improving the quality of financial reporting, and ensuring compliance with standard procedures are among the measures identified to enhance budget credibility.
The MoF has also prioritized transparent procurement processes, strengthening internal audits, and reforming revenue management. Effective coordination among intergovernmental agencies and the adoption of an improved revenue collection system are expected to help meet revenue targets.
In addition, the strategy envisions the development of an integrated financial transfer system linking the budgetary and financial reporting frameworks of all three tiers of government. The MoF said this will make intergovernmental fiscal transfers more predictable and transparent, thereby improving fiscal discipline and strengthening public financial management.
