The government has begun the process of formulating the Revised Budget (RB) for the current fiscal year, placing utmost priority on reducing the overall budget size and enforcing expenditure contraction. A strict directive has been issued stating that no ministry or agency will be allowed to claim additional allocations in the revised budget.

Directive for Expenditure Contraction

The directive concerning the formulation of the revised budget states that due to global economic pressures and shortfalls in domestic revenue collection, the pace of expenditure must be slowed down this year. Ministries have been advised to review their ongoing development projects and operational costs, keeping allocations limited to essential sectors. Instructions have been given to reduce allocations for non-essential expenditure areas.

Ban on Additional Allocation Claims

A core principle for budget formulation has been established: no additional allocation claims will be entertained in the revised budget. Ministries and departments have been instructed to manage their expenditures within their existing allocated funds. While provisions exist for reallocating funds from reduced expenses to other sectors, there is no scope for requesting new funds.

Economic Context

The revised budget is expected to be passed at a smaller size compared to the budget announced at the beginning of the current fiscal year. Due to shortfalls in revenue collection and a slowdown in foreign aid disbursement, the government has had to adopt an expenditure contraction strategy. Emphasis is being placed on cutting administrative costs, foreign travel, procurement of new vehicles, and spending on non-priority development projects.

Next Steps

Ministries have been directed to submit their expenditure proposals within a stipulated timeframe for the formulation of the revised budget. The Finance Division will scrutinize these proposals before presenting the final revised budget to parliament. Analysts suggest that the primary challenge for the government this year will be to ensure expenditure quality while reducing the overall budget size.