Bagmati Province to downsize budget

By Rammani Dahal,Hetauda, May 9: The budget size of Bagmati Province for the upcoming fiscal year 2024/25 will shrink. 

As revenue collection from internal sources of the provincial government dwindled, the budget size for the forthcoming year is sure to be smaller than the current year’s.  Subsidies from the federal government have also been cut. 

As per the statistics provided by the Ministry of Economic Affairs and Planning of the province, the revenue collected from internal sources and that received from the federal and local governments in the current fiscal year have not met the targeted collection up to mid-April.

Likewise, the grant assistance received from the federal government till mid-April for the current fiscal year has fallen short of expectations. 

The budget size for the upcoming fiscal year is set to decrease, as evidenced by the reduction in the budget ceiling sent by the ministry to other ministries of the province for the upcoming fiscal year. 

Dr. Arjun Acharya, the Information Officer of the Ministry, informed that the ceiling allocated to provincial ministries for the budget of the next fiscal year has decreased by nearly 11 per cent in comparison to the current fiscal year.

He noted that upon evaluating the current state of revenue collected from the internal sources of the provincial government and revenue generated from other sources, it is anticipated that collections would be lower in the upcoming year.

Additionally, he emphasised that given the insufficient increase in revenue collection, the size of next year’s budget is projected to decrease in comparison to the current year.

There are 12 ministries including the Office of the Chief Minister in the province.

The budget size is expected to decrease by 11 per cent from the total budget for the current year. Furthermore, there was also a reduction in the budget size for the current fiscal year compared to the previous year.

According to the ministry’s statistics, 66.27 per cent of the allocated budget of Rs.70.939 billion for the year 2022/23 was spent, amounting to Rs. 47.01 billion. 

The province’s budget for the current fiscal year consists of Rs. 26.42 billion for current expenditures, Rs. 35. 78 billion for capital expenditures, and 62.7 billion for financial management.

Only 34.42 per cent of the total budget or only Rs. 21. 58 billion has been spent till mid-April. 

Likewise, the revenue, grants, and other income sources for the 

provincial government fall short of half the targeted amount for the current year.

In the current fiscal year, the provincial government, anticipated to generate Rs. 62.7 billion from revenue, grants, and other sources. But the provincial government has collected only 41.43 percent, equivalent to Rs.25.98 billion as of mid-April. 

Dr. Aryal said that the subsidy received from the federal government was below the estimated amount, and certain revenue collections were also diminished, resulting in the fall of income.

It was estimated that Rs.17.8 billion would be received from the federal government but with only three months left to end the current fiscal year, only 46.09 per cent of that has been disbursed.

Similarly, as of mid-April of the current year, 71.23 per cent of the anticipated revenue collection from the provincial government’s own resources, amounting to Rs. 3.75 billion has been collected.