JANAKPURDHAM, Feb 14 : The Ministry of Finance of Madhesh Province government is preparing to freeze budgets due to lower-than-expected revenue collection in the current Fiscal Year (FY) 2024/25. On Thursday, the ministry issued a notice to all relevant agencies, warning of budget restrictions after revenue collection fell short of projections.
As per the notice, only 28.53 percent of the estimated internal revenue had been collected by the end of Magh (mid-January to mid-February) while only 13.24 percent of the third installment of the federal government’s fiscal equalization grant is expected to be received. Overall, with just 30.35 percent of the projected total income secured, the province’s consolidated fund is running low, raising concerns about payment constraints. A ministerial-level decision on February 13 addressed this issue.
In response, the finance ministry has instructed all agencies to exercise financial prudence and surrender unspent funds. It has also directed ministries to submit details of projects without signed agreements and programs with allocations of Rs 5 million or less within two days. Failure to meet this deadline, coupled with no improvement in revenue collection, may result in freezing incomplete projects and programs.
Diversifying Government Revenue
The ministry has specifically requested details of all approved but non-contracted projects and programs excluding those already under implementation, within 48 hours. If the required information is not submitted on time, the finance ministry reserves the right to halt any project or program until revenue collection improves.
The directive has been sent to the Office of the Chief Minister and Council of Ministers, along with 11 ministries and other subordinate bodies.
