The preparation of the federal budget for the upcoming fiscal year (FY 2025/2026) has hit a stumbling block due to the delay in amending legislation, which undoubtedly demonstrated sloppiness on the part of the authorities in charge of streamlining budget preparation and presentation on time. As a result of the inability to change crucial and necessary legislation on time, concerns about budget preparation have gripped both the National Planning Commission (NPC) and the Ministry of Finance, causing anxiety over much-talked about fiscal discipline and development goals. The NPC, which has been tasked with providing significant inputs for the preparation of the federal budget, reportedly postponed the task of soliciting plans and programs under various headings from provincial and local governments due to a lack of amendments to the Federal Supplementary and Special Grants Work Procedures. Parliament's inability to enact the Financial Procedure and Fiscal Responsibility (First Amendment) Bill, 2081 BS, resulted in the Ministry of Finance lacking a clear legislative basis for budget preparation. The NPC is required by law to submit a request for proposals from municipal and provincial governments by mid-January, with a notice issued by mid-December each year. However, the prime minister, who presided over the 53rd National Development Problem Solving Committee meeting on November 15, ordered adjustments to these processes. Because of the directive, the NPC is now in charge of developing and presenting amended procedures to the Council of Ministers within three months. Because of the delay, the NPC is likely to hurry to assemble plans and programs to meet the deadline, which may lead to some inconsistencies in the federal budget, which, according to previous regulation, has to be presented on Jestha 15 – roughly 45 days before the new fiscal year begins in mid-July – of the Nepali calendar.
We may do well to remember that the government's failure to adopt the 2080 BS Financial Procedure and Fiscal Responsibility Ordinance last year further exacerbated the budget preparation and presentation scenario. Although the law allowed for the timely reporting of budget principles and goals, its subsequent removal left a legislative gap. In the meantime, the country’s unstable fiscal schedule is well highlighted by the present discussion over whether to utilize the repealed ordinance, the existing Act, or the upcoming law. Hence it becomes imperative on the part of our government to prioritize the amendment and passage of the Financial Procedure and Fiscal Responsibility (First Amendment) Bill, 2081 BS. Strong, clear rules for budget preparation are required for restoring trust and ensuring timely resource allocations. For achieving this goal, the NPC must expedite the amendment to the Federal Supplementary and Special Grants Work Procedures to ensure justice and inclusion.
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To minimize future delays and confusion on budget preparations, the government needs a legally-binding, well-defined budget calendar with deadlines for each procedure and step. This will increase accountability, allowing for more consultation and scrutiny. The parliament should proactively discuss and enact essential financial legislation while understanding their impact on national development priorities. The current delays highlight the need to strengthen the federal budget’s preparation and timely presentation because federal funding must be provided on schedule so that provincial and local governments can carry out their development plans and objectives. Delays in grant procedures have a detrimental influence on both local and provincial development objectives and collaborations. Nepal's fiscal system can be made more efficient, vibrant and successful if our authorities improve communications and cooperation at the federal, provincial, and municipal levels.
