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The government has allocated Rs 15.56 billion for the forest and environment sector. Presenting the budget for the fiscal year 2023/24 in a joint session of the federal Parliament on Monday, Finance Minister Prakash Saran Mahat said that environmental balance would be maintained through the management of forest, biological diversity and watershed management. Minister Mahat announced to ensure sustainable utilization of forest resources and enterprise development to ensure its contribution to the national economy. Likewise, conservation areas and community forest would be developed as eco-tourism destinations, the finance minister said. Furthermore, the Chure Conservation Master Plan would be implemented with the participation of federal, province and local levels through the President Chure Conservation Program.  

The government has announced to scrap all the perks and incentives of civil servants from the fiscal year 2023/24. Finance Minister Prakash Saran Mahat said so while presenting the budget in a joint session of the federal Parliament. Likewise, Minister Mahat announced the dissolution of 20 different boards and development committees as per the recommendation of the Public Expenditure Review Commission 2075 BS. Likewise, state-owned institutions having similar areas of scope would be merged and adjusted at the province level, Dr Mahat added. The finance minister said that the public procurement system will be simplified, e-tender will be prioritized and integrated monitoring systems will be made effective.    

Finance Minister Ram Saran Mahat is presenting the budget for the fiscal year 2080/081 BS (2023/24) in a joint session of the federal Parliament on Monday. Prior to that, a meeting of the Council of Ministers endorsed the budget details, granting permission for its presentation in the House. Soon after the commencement of the House session, Speaker Devraj Ghimire invited the finance minister to present the budget for the upcoming fiscal year. The Constitution states that the finance minister shall lay before the Federal Parliament an estimate of revenues and expenditures under clause (1) on the 15th day of Jeth (mid- May) each year. In Nepal's history, the first budget speech was held on February 4, 1952 following the restoration of democracy. It was announced by the then Finance Minister Subarna Shumser Rana and its size was equivalent to Rs 52.5 million.

All eyes are on Finance Minister Prakash Saran Mahat as he prepares to present the federal budget for the next fiscal year on Monday. The constitution of Nepal mandates the government to present the annual budget to the parliament on Jestha 15 (May 29) every year. For the government in previous years, presenting the budget used to be a somewhat easy affair; the budget speech used to be full of populist programs with the government trying to please everyone. The situation is very different this year as a severe resource crunch has forced Finance Minister Mahat to walk a tightrope where he has to manage the expectations of many while also bringing a prudent budget at the same time. Probably never before has any finance minister been forced to prepare a budget with an acute scarcity of financial resources as Mahat. In Nepal, it has been common for every finance minister to bring a budget with a size higher than the previous one, but the implementation of the budget has always been poor. The tendency of bringing a bloated budget but not being able to spend it fully has been repeating for years in Nepal. While the spending capacity of the government has not increased in the last decade, the trend is to bring abnormally large budgets. In the last 10 years, the government has been able to spend an average of only 81.31 percent of the total allocated budget annually. The highest budget spending was in FY 2012/13 when the total expenditure reached 88.7 percent. The data of the last 10 years shows the government has increased the budget size by an average of 44 percent over the actual expenditure of the previous year. While the actual spending stood at Rs 1,309bn in FY 2021/22, the government came up with an annual budget of Rs 1,793bn for FY 2022/23. The size of the current fiscal year budget was increased by 36.97 percent of the actual amount spent in FY 2021/22. In FY 2016/17, the government brought a Rs 1,048bn budget, which was 74.37 percent higher than the actual spending of FY 2015/16. Official statistics show budget utilization has remained sluggish in the last 10 years. The government has been able to utilize on average only 81.31 percent of the total allocated budget in the past decade. The highest spending was recorded in FY 2012/13 when 88.7 percent of the total budget was spent, while the expenditure was most sluggish in FY 2019/20 when only 71.18 percent of the total budget allocation was spent. Economists say the trend of bringing a bloated budget but spending the allocated amount sluggishly has diminished the public’s trust in the budget. “By not being able to spend the budget, the government has failed to fulfill its responsibilities,” said economist Chandra Mani Adhikari. “While presenting the budget, the government promises many facilities to its citizens. When the government fails to implement the budget, the citizens of the country are deprived of the facilities announced by the budget.” The state of capital expenditure spending (development budget) is much weaker. Even as the federal budget is presented six weeks before the start of the new fiscal year, the government has failed to install measures to expedite the development budget. Every year, the government has struggled to spend the allocated capital expenditure, only to promise that it will resolve the problems next year. According to the Financial Comptroller General Office (FCGO), capital expenditure amounted to Rs 135.44bn till May 14. It means only 35.61 percent of the capital expenditure has been spent in the 10 and half months of the current fiscal year. Official statistics show that the government has managed to spend only 72 percent of the capital budget on average every year. The majority of capital expenditure takes place in the last month of the fiscal year i.e., Asar (mid-June to mid-July). The report of the Office of the Auditor General (OAG) also shows that 40 percent of the total capital expenditure takes place in Asar. This creates room for fiscal indiscipline and also affects the quality of the development works. Economists say capital spending is one of the major factors that determine the country’s economic growth rate. The government's capital expenditure includes spending made in infrastructure development, construction, and other sectors that help generate capital formation in the country. Economists and former government officials cite multiple reasons for the poor state of capital expenditure. According to them, starting construction work without preparing a detailed project report (DPR), no clarity in the project implementation modality, land acquisition, and compensation disputes, and lack of inter-agency coordination in the transfer of utility services have plagued the country's development expenditure. Government officials admit the rushed spending that happens usually in the last month (Ashar) of the fiscal year has raised the quality of such spending. According to them, government agencies generally prepare procurements in the first quadrimester of the fiscal year. The spending picks up in the second half of the fiscal year after the government exerts pressure on agencies to speed up development works. “The late submission of bills, settlement of flaws in documentation, and political pressure to spend in certain areas are the reasons for a large amount of budget being spent in the last month of the fiscal year,” said the former secretary. Economist Adhikari points out the structural weaknesses in project preparation and implementation, bureaucratic delays in approving and re-approving projects, and contractor capacity. Total budget spending