1. Budgeting
Trilochan Poudyal

2. Budget Concept
Introduced in England in 1773 from a French word ‘bougette’ that means a leather bag, while opening it by the Chancellor of Exchequer in the Parliament to present government’s financial plan for approval.
A financial plan and a major policy instrument to establish macro economic stability, allocative efficiency and fair distribution of income/resources.

3. Budget Concept
A policy making tool used to translate strategic objectives into programs and services to meet the socio-economic needs of the people.
Contains overview of the economy; annual revenue and expenditure plan; information on assets and liabilities; and appropriations.

4. Objectives Enhance economic growth;
Establish a sustainable fiscal framework;
Allocate resources to programs on the basis of governmental priorities and program effectiveness;
Operate and deliver public services efficiently;
Ensure that the budget reflects citizens’ preferences;

5. Objectives
Ensure that spending units are well equipped and are accountable for their actions;
Maintain balance between socio-economic and spatial (geographic) development; and
Make socio-economic transformation of the country.

6. Types of Budget Line item budget or incremental; Zero-base budget;
Program budget;
Performance budget;
Voted and non-voted;
Capital and operating/recurrent;

7. Development and ordinary;
Core and external;
Participatory and non-participatory;
Central, provincial and local budget;

8. Principles of Budgeting
Annuality
Universality
Accuracy and timeliness
Comprehensiveness
Legitimacy
Flexibility and Predictability

9. Fiscal discipline
Transparency and accountability
Allocative efficiency
Contestability

10. Budgeting Framework
Policy framework: Meeting the goals and targets such as of the SDGs, SAARCDGs, LDC Graduation strategies, Plan Objectives, Medium Term Expenditure Framework; Meeting Sectoral Policies and Targets; Reducing poverty; Better Public Service Delivery etc.
Legal framework: The Constitution; Public Finance and Expenditure Management Law; Public Procurement Law; Int’l Monetary Fund’s guidelines.
Other documents of legal importance such as multilateral and bilateral agreements, commitments.

11. Budget Cycle Formulation Approval Budget Execution
Evaluation: Control and External Audit

12. Budgetary Process in Nepal
Resource Estimation by the Resource Committee at NPC;
Budget Ceiling and Guidelines by NPC (by Sector and the District);
Budget Formulation: Top-down, Bottom-up, Lateral ;
Budget Discussion at the Ministry/NPC/MOF;
Program-budget approval by NPC & the Cabinet to submit to the Parliament

13. Budgetary Process in Nepal
Budget Approval followed by Spending authorization with guidelines by MOF;
Budget disbursement and execution by spending Units;
Treasury Single Account (TSA) and Internal audit;
External/Final audit and reporting to Head of the State;
Discussion on the Parliament- Public Accounts Committee and action to be taken up thereafter.

14. Recent Trends Gender Responsive Budgeting Pro-poor Budgeting
Climate Change Budgeting
Post-disaster Rehabilitation and Reconstruction
Projects of National Pride: 21 (irrigation 4, roads 7, power 3, airports 3, culture 2, drinking water 1, forestry 1=21)
Priority-wise allocation: Budget for prioritized project
LDC graduation consistent budgeting: a thrust for graduating Nepal from the LDC category to DC status by 2022.
Also, Vision 2030 in progress.

15. Challenges and Way Forward
Maintaining macro-economic stability (maintaining fiscal discipline; ensuring efficiency of public resources; maintaining monetary stability; strengthening financial system; and enhancing private sector in economic activities) and allocative efficiency; (scattered resources, issues of common virement)
Balancing allocation between capital and recurrent expenditure
Balancing spatial distribution(ecological zones, development regions; rural/urban): physical connectivity and Electrification;

16. Streamlining resources to post-MDGs/SDGs, SAARCDGs, 14th Plan/LDC graduation strategies/ programs, ad hoc/political project demands;
Balancing allocation across targeted areas (targeted districts, social groups);
Ensuring budget for the projects of national pride;
Dependency on external sources ( around 25%);
Low level of spending (surplus budget);

17. Imbalance of payment in foreign trade;
Remittance oriented economy often unsustainable;
Ignoring industrial sector development (overlooking the issues of sick industries);
Unsustainable social security allocation (pension, security benefit age);
New generation economic reforms in doldrums (stagnation);
Addressing the consumerist behavior of the ever ambitious public sentiments; and
Post Earthquake Rehabilitation & Reconstruction (Rs b).

18. Distribution oriented (social security, growth in salary and facilities, constituency development programs, relief package for conflict affected people, redressing the concerns of the people affected by natural disasters; and to the farmers in terms of loan and subsidies)

19. Financial Summary of Budget 2017/18 vs. 2018/19

20. Heading Amount(Billion) Revenue 730.05 Repayment of debt principal
15.00
Foreign Grant
72.17
Foreign Loan
214.04
Cash reserve of fiscal year
102.73
Internal Loan
145.00
Total
1,278.99

21. Thank You