KATHMANDU, June 29: The government has overturned its own decision not to transfer the budget in the last month of the fiscal year, which it announced in the annual budget for the FY 2023/24.
While unveiling the annual budget for the current fiscal year, the government had mentioned not to permit budget transfers and not to amend the predetermined programs during mid-June and mid-July. However, political parties and other influential high level bureaucrats compel the Ministry of Finance (MoF) to conduct budget transfers at the last hour of almost every FY.
Citing to maintain fiscal discipline, the government last year declared not to allow budget transfers for the stipulated period. “If contracts are not awarded for development projects by mid-November, the allocated budget will not be disbursed for such projects. In addition, the trend of transferring budget allocated for the projects targeted in remote areas in alternative sectors will be discouraged,” reads the clause in the budget for FY 2023/24.
However, the Cabinet meeting last Monday, annulled the previous decision and allowed the government offices for budget transfers. Finance Minister Barshaman Pun proposed the government for permitting budget transfers in administrative costs and running development projects.
According to the MoF officials, the government has fallen under pressure to provide necessary funds to development projects that face dearth of necessary funds. In addition, the government has been facing pressure to manage financial resources to provide regular salaries to the government employees due to low revenue collection than the projected amount.
The annual report of the Office of the Auditor General (OAG) shows that there are massive budget transfers conducted by the government offices almost every year. The government carried out a cash transfer of Rs 41.39 billion from unused funds meant for capital expenditure in other headings in the FY 2022/23. During one month of mid-April and mid-May this year, the government disbursed additional funds worth around Rs 3 billion to a number of authorities through budget transfers.
The Financial Comptroller General Office (FCGO) has also barred all three tier governments from making unnecessary expenses in the last week of the fiscal year. This year, the government is likely to breach even the guidelines set by the body meant for maintaining financial discipline in the country.