KATHMANDU: The government appears resolute in surpassing the budget ceiling of Rs 1.8 trillion, which was set by the National Planning Commission (NPC) for the upcoming fiscal year. The National Resource Estimates Committee (NREC) operating under the NPC has initiated efforts to revise the budget ceiling to exceed Rs 1.9 trillion. Initially, the committee, led by Vice-Chairman Min Bahadur Shrestha, had established the upper limit of the budget for the fiscal year 2024/25 at Rs 1.8 trillion on February 13.
An NPC official revealed that the NREC is in the process of revising the limit following Prime Minister Pushpa Kamal Dahal's directive to raise the budget ceiling to Rs 1.9 trillion. This decision came amidst reports that various line ministries had requested funds totaling over Rs 2 trillion, potentially prompting pressure on PM Dahal. As per regulations, the NREC is mandated to determine the budget ceiling for the following fiscal year by mid-February annually, with the government obliged to adhere to the limit prescribed by the NPC.
Previously, the budget ceiling of Rs 1.8 trillion projected revenue collection of Rs 1.27 trillion, with an anticipated Rs 260 billion from foreign aid and grants, and Rs 270 billion from internal borrowings. In light of recent developments, the NREC has elevated the limit for internal loans that the government can assume, increasing it from 4.5 percent to 5.5 percent of the country's GDP. This adjustment enables the government to access internal loans amounting to up to Rs 310 billion.
While Finance Minister Barshaman Pun has consistently emphasized his commitment to announcing the budget within the ceiling provided by the NPC, PM Dahal has applied pressure on the authority to exceed the limit. The government plans to unveil the budget for the fiscal year 2024/25 on May 28 this year, facing the challenge of minimizing unproductive expenditure due to financial constraints stemming from insufficient revenue collection.
Despite aiming to enhance revenue collection by 29 percent to Rs 1.29 trillion in the next fiscal year, the federal government is projected to collect less than Rs 1 trillion in revenue during the current fiscal year. This discrepancy underscores the necessity for prudent financial management and the balancing of fiscal resources to address pressing economic demands.
