Govt downsizes budget ceiling of physical infrastructure by Rs 54 billion for FY 2023/24

Published On: April 25, 2023 09:27 PM NPT By: Republica  | @RepublicaNepal

Inadequate budget allocation is likely to take into slow pace the development projects

KATHMANDU, April 25: The government has reduced the budget ceiling heavily for the projects related to physical infrastructure for the upcoming fiscal year.

According to the Ministry of Physical Infrastructure and Transport (MoPIT), the Ministry of Finance (MoF) has reduced the budget ceiling for the MoPIT by Rs 54 billion. While the budget of Rs 167 billion has been allocated for the MoPIT for the current fiscal year, the threshold has been given at only Rs 113 billion for FY 2023/24.

Minister for Physical Infrastructure and Transport Prakash Jwala said the government has given priority to under construction projects and the new projects mainly due to implementation of austerity measures. According to him, the government has targeted to ensure adequate funds to the ongoing projects rather than starting the new ones.

Keshab Kumar Sharma, secretary at the MoPIT, said curtailing budget size will adversely affect the construction of infrastructures. According to him, in the reduced budget ceiling, the ministry’s capital expenses will be downsized by around 40 percent.

Sharma said they are yet to receive a huge amount of reimbursement from the MoF due to the shortfall of funds with the government. He said the MoPIT has not been able to settle around Rs 12 billion dues to the contractors of the construction projects.

The National Planning Commission (NPC) has fixed the ceiling for the budget of the fiscal year 2023/24 at Rs 1.688 trillion, which is less than the budget announced for the current fiscal year by Rs 105.43 billion.

The government has downsized the budget for the next fiscal year, adopting austerity measures due to the inadequate collection of revenue. Based on the NPC’s threshold, the MoF prepares the budget.

Meanwhile, the government has maintained the budget ceiling of Rs 20 billion for the Kathmandu-Madhesh fast track project. The Nepalese Army has sought Rs 50 billion to take forward the construction of the national pride project. However, the project will get less than half of the demanded budget.

The government has adopted austerity measures to curtail the public expenditure as it faces a heavy shortfall in revenue collection against the targeted amount. In the first nine months of the current fiscal year, the revenue collection has been almost Rs 350 billion less than the target.

For the current fiscal year, the government had set the revenue collection target of Rs 1.403 billion. However, the collection stood at only 49.29 percent of the amount as of the first nine months.


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