The Government of Nepal has introduced a new set of budget implementation guidelines for the fiscal year 2025/26, reinforcing its commitment to maintain fiscal discipline and improve budget utilization efficiency. The Ministry of Finance (MoF) issued a comprehensive 95-point directive on Thursday, aiming to bring better control over public spending as the new fiscal year begins.
According to the guideline, government offices must surrender unused funds by the end of March if they are unable to utilize them under the allocated headings. Additionally, duplicate budget allocations for the same objective under different headings must be eliminated. These measures are designed to prevent misuse and ensure accountability.
Despite these rules, the government has faced repeated criticism for violating its own guidelines, especially during the end of the fiscal year when massive budget transfers typically occur. The Office of the Auditor General (OAG) revealed that in FY 2023/24, Nepal had total arrears of Rs 733 billion, with the MoF itself accounting for the highest share—Rs 33.71 billion—highlighting concerns over non-transparent spending.
Key provisions in the new directive include:
- No additional procurement allowed even from surplus amounts left over from completed tasks.
- Sub-national governments must use central government grants strictly under designated headings.
- Budget transfers must be limited to a maximum of 25% of the disbursed amount, with program revisions to be completed by mid-January.
- Contractors must get government approval to sub-lease construction works; multi-stage sub-leasing is allowed only in essential cases.
- Projects exceeding Rs 100 million in value must undergo quality testing through the National Vigilance Center.
- Contractors are required to maintain completed projects worth over Rs 50 million for five years.
- Funding for multi-year contracts must be managed from within the approved annual budget.
The guideline reflects the government’s intent to strengthen transparency, efficiency, and accountability in public spending. However, whether these rules will be effectively enforced remains to be seen, given the past record of violations and financial irregularities.
