KATHMANDU, July 20: The government has issued guidelines to all three tiers of government to enforce financial discipline in implementing the budget for Fiscal Year (FY) 2026/27.
The guidelines issued by the Ministry of Finance (MoF) on Monday seek to make the budget implementation for the next FY more systematic, economical and transparent. The guidelines, issued for all central bodies, provinces and local levels, are expected to maintain financial discipline in accordance with the Appropriation Act, 2026 and the Financial Procedures and Financial Responsibility Regulations, 2020.
According to the MoF’s guidelines, if the budget for the annual approved programs is not spent by mid-March or if it is found that it cannot be spent during the remaining period, such amount must be surrendered to the MoF by March-end this FY.
Finance ministry enforces 95 fiscal discipline guidelines
The MoF has also adopted a policy to maintain maximum economy in administrative expenses such as water, electricity, communication charges, house rent, fuel, maintenance expenses, foreign trips and allowances. It has been made mandatory for the government offices to take prior consent of the MoF for the purchase of new four-wheelers and foreign trips.
Similarly, government entities cannot use private houses or business centers on rent as long as government buildings are vacant, and if they have to be rented, the structure must have only the minimum facilities. The ministry has sought to make the government offices to issue a 7-day advance notice for payments exceeding Rs 1 billion to ensure effective use of government funds and manage cash flow for large payments.
The government has decided to withhold foreign aid resources and supplementary budget funds until the foreign loan or grant agreement takes effect.
The MoF has cautioned that if reimbursement is not requested regularly as per the guidelines, the budget release for the next quarter will be stopped and action will be taken against the responsible officer as per the Financial Procedure Act.
The guidelines have provisions to assess the financial risks that may arise in the course of implementing projects and programs and adopt measures to minimize them. The move is expected to reduce financial risks and improve capital expenditure. The ministry has set a goal of significantly improving capital expenditure by ensuring the effective implementation of large infrastructure projects.
