NPC to Finance Ministry, Discontinue with sick projects, considering resource constraint

Kathmandu: The National Planning Commission (NPC) has recommended that the Finance Ministry significantly slash sick and troubled projects, citing the potential of resource constraints for the fiscal year 2082-83 BS (2025/26).

It has hinted at the pressure on the sector of compulsory responsibility in the upcoming fiscal year, advising the Ministry to discontinue with failed and problematic projects. It has come with such advice in its report about the discussions based on policies and programmes relating to the formulation of the budget for the upcoming fiscal year.

There is less possibility of a significant reform in revenue mobilisation in the upcoming fiscal year. The arrival of foreign grants has been gradually decreasing for the past few year,s and the obtainment of foreign loan has been not in alignment with the commitments,’ the report states, adding that being based on all these possibilities, it is warranted to take measures for coping with the limited sources for budget management.

The Commission has already recommended that the government prepare the budget by remaining within the ceiling of Rs 1,965 billion. The portion of current and mandatory responsibilities has gradually increased in the budget.

The increasing size of public debt, payment of principal and interest, remunerations for employees and the social security allowances are major factors of expenditures in the budget, and the growing size of such expenses continues to put pressure on the budget-making procedures.

The situation has demanded the need to reduce allocations to the development projects. The reconstruction efforts after the Jajarkot earthquake and the September (2024) water-induced disasters, and the situation for mobilising additional sources for social security and health insurance, have put pressure on the selection of budget priorities.

As the Commission said, the priority on the payment of responsibilities created by relevant ministries and bodies has caused the situation to be limited source mobilisations in other sectors.

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