'Fiscal discipline is a must in budget'

Kathmandu, June 15: Nepali Congress lawmaker and former Finance Minister Dr Prakash Sharan Mahat has stressed that fiscal discipline be guaranteed in the budget.     

Taking part in the general discussions on the Annual Estimates of Revenue and Expenditures (budget) for the upcoming fiscal year 2025-26 in the House of Representatives (HoR) on Sunday, the leader said the new budget is relatively balanced and meets the discipline criteria.     

‘"The present time demands fiscal discipline and the budget for the upcoming fiscal year is relatively balanced. The budget allocation on the basis of priorities is the essentiality of hour," the former Minister said, arguing that the lack of fiscal discipline and orderliness that would be reflected in the past budget has been best tried to be addressed by the fresh budget.     

The leader and Spokesperson for the Nepali Congress highlighted that the budget has implemented a provision to avoid proposing projects costing less than Rs 30 million at the federal level, emphasising the need to adhere to this practice more effectively.     

However, projects below Rs 30 million have still been included in the budget, and this will be phased out gradually. He argued that the budget has the potential to drive economic growth through government investment. He stressed the need to focus more on projects that are capable of delivering tangible results.     

"The country is rich in tourism potential," he said, echoing the need to identify significant tourist sites and to connect them by all-season roads, along with the proper and planned development of infrastructure, including hospitality services.     

Former Finance Minister Mahat opined that it will be difficult to achieve the target of ensuring the sources proposed in the budget.     

"Internal borrowing is being proposed more from the financial and banking system. The payment of interest on the loan must be managed with financial resources equivalent to the capital expenditure. In the future, it is important to be more serious about the problems seen in allocation and resource mobilisation. A practice of spending only based on solid, meaningful, and prioritised criteria must be developed," he said.     

MP Mahat emphasised that it is essential to maintain budget discipline in the province, stating that small projects should be funded through budget allocation to avoid misuse of funds, and that projects should only be implemented through mandatory contracts. He insisted that only projects above 10 million should be implemented in the province.     

He stated that the Rastriya Swatantra Party (RSP) has raised baseless issues and protested, thus missing an important opportunity for discussion on the budget, in the context of all parties, including the main opposition party, participating in discussions on the budget.     

Stating that the aim of every budget is to promote economic prosperity in the country, create economic opportunities, and generate employment to accelerate the country's economic development, he expressed the confidence that this budget would be implemented with a focus on priorities such as how to mobilize state resources and foreign aid, revenue mobilization, in which areas to invest, and how to manage capital expenditure.     

Former Finance Minister Dr Mahat stated that the revenue estimation of the proposed budget of Rs 1964 billion is not as expected, and it will be difficult to receive foreign aid as suggested, and also, there is no situation to receive foreign loans as proposed. He mentioned that the government needs to put in more effort to meet the revenue mobilisation targets. (RSS)