Preparations for the federal budget for the upcoming fiscal year 2082/83 have been thrown into disarray due to delays in amending critical laws. The National Planning Commission (NPC) has paused the process of seeking plans and programs from provincial and local governments under the federal supplementary and special grants framework. This decision follows the lack of progress in amending the Federal Supplementary and Special Grants Work Procedure.
Compounding the issue, the Ministry of Finance faces uncertainty over how to proceed with the budget formulation, as the Financial Procedure and Fiscal Responsibility (First Amendment) Bill, 2081, remains stalled in parliament. The delay has disrupted established timelines for the budget preparation process, creating confusion among stakeholders.
Under the current procedure, the NPC is required to issue a notice by mid-December, inviting provincial and local governments to submit proposals for projects under supplementary and special grants. These proposals are expected to be submitted by mid-January. However, the NPC halted the process following a directive from the National Development Problem Solving Committee during its 53rd meeting on November 15, chaired by the Prime Minister. The committee had instructed the NPC to draft amendments to the procedure and submit them to the Council of Ministers within three months.
NPC Vice-Chair Prof. Dr. Shivaraj Adhikari acknowledged the delay but expressed optimism about the revised procedure. He stated that while the process of seeking proposals has been delayed, the amendments aim to make the allocation of grants more equitable and inclusive. He assured that deadlines for proposal submissions would be extended once the amendments are finalized.
The proposed amendments are expected to address criticisms that previous allocations were neither balanced nor equitable. They aim to align grant distribution with the financial capacity of local and provincial governments while promoting socio-economic equality. Additionally, the changes seek to ensure that projects funded under special grants contribute to the development of marginalized communities and regions.
Meanwhile, the Financial Procedure and Fiscal Responsibility (First Amendment) Bill, 2081, introduced in parliament on August 16, remains unresolved. The bill is intended to streamline the budget calendar and establish clear timelines for fiscal planning. Its predecessor, the Financial Procedure and Fiscal Responsibility (First Amendment) Ordinance, 2080, temporarily addressed similar issues but lapsed earlier this year due to parliamentary inaction.
The ordinance had allowed the government to present the budget’s principles and priorities in parliament by mid-March and adjusted deadlines for setting budget ceilings. However, its repeal has left the government uncertain whether the upcoming budget should follow the schedule under the existing law, the provisions of the lapsed ordinance, or the pending bill in parliament.
The repeated delays have drawn criticism from legislators and experts, who argue that the lack of a fixed budget calendar undermines effective fiscal planning. As the government scrambles to resolve these procedural challenges, the timeline for budget formulation remains uncertain, casting a shadow over the upcoming fiscal year.
28th Dec 2024
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