The National Planning Commission (NPC) has estimated the budget ceiling for the upcoming fiscal year 2082/83 (2025/26) to be approximately NPR 1.9 trillion. The commission submitted its report titled “National Resource Estimation and Expenditure Limit Report 2081“ to the Ministry of Finance, outlining projected revenue sources and spending limits.
Current Fiscal Year’s Budget Performance
For the current fiscal year (2081/82), the initial budget was set at NPR 1.86 trillion. However, a mid-term review by the Ministry of Finance revealed that only NPR 1.692 trillion is likely to be spent by the end of the year. This indicates a spending shortfall compared to the original allocation.
Key Highlights of the Projection
- The National Planning Commission (NPC) estimate for FY 2082/83 reflects a 12% increase in resource allocation compared to the current year’s revised budget.
- The government recently amended the Economic Activities and Fiscal Responsibility Act through an ordinance. This mandates the submission of the resource estimation and expenditure limit report to the Ministry of Finance by the first week of Falgun (mid-February). The NPC complied with this requirement by submitting its report on time.
Recent Policy Changes
The amendment emphasizes stricter fiscal discipline, requiring timely planning and reporting to ensure efficient budget execution.
Suggestions from a Professional Economist
- Prioritize Realistic Revenue Targets: Base revenue projections on historical data and current economic conditions. Overestimating revenue can lead to unsustainable borrowing or spending cuts later.
- Control Recurrent Expenditure: Limit non-productive expenses (e.g., administrative costs) and focus on capital investments (e.g., infrastructure, education) to boost long-term growth.
- Strengthen Monitoring Mechanisms: Address the current year’s spending shortfall by improving project implementation efficiency. Regular audits and digital tracking systems can reduce delays.
- Enhance Transparency: Publish detailed budget execution reports to build public trust and ensure accountability in resource allocation.
- Focus on High-Impact Sectors: Allocate funds to agriculture, energy, and tourism to generate employment and stimulate economic recovery.
- Adopt Fiscal Prudence: Avoid populist programs that strain resources. Instead, align spending with the government’s long-term development goals.
- Engage Stakeholders Early: Collaborate with provincial and local governments during the planning phase to ensure cohesive and inclusive budgeting.
By balancing ambition with fiscal responsibility, Nepal can achieve sustainable economic growth and resilience.