Gandaki Province to cut budget for next fiscal year amid lower grants and revenue

GANDAKI: The budget for upcoming fiscal year 2025/26 in Gandaki Province is set to decrease due to a reduction in equalisation grants and revenue collection.

The Provincial Resource Estimates Committee has recommended that the provincial government, which introduced a budget of Rs 32.97 billion for the current fiscal year, bring forward a budget of Rs 29.5 billion for the next fiscal year.

According to Dilliram Rizyal, Head of the Budget and Programme Division at the Ministry of Economic Affairs, the budget ceiling has decreased across ministries, with the overall budget expected to decline by nearly Rs 3 billion. Cuts in equalisation and supplementary grants have put pressure on budget formulation, while internal provincial resources have failed to increase.

With two months remaining in the fiscal year, only 52% of the target revenue has been collected, Rizyal said, adding that approximately 70% of the total target revenue is expected to be collected by the fiscal year's end.

However, the Provincial Policy and Planning Commission has stated that the provincial budget may increase depending on the budget introduced by the federal government. The commission has set a ceiling of Rs 9.48 billion for the Ministry of Physical Infrastructure and Transport Management, compared to Rs 12.7 billion in the current fiscal year.

Similarly, budget formulation is underway with ceilings set at Rs 2.67 billion for the Ministry of Health, Rs 1.35 billion for the Ministry of Social Development, Youth and Sports, Rs 900 million for the Ministry of Forests and Environment, and Rs 650 million for the Ministry of Industry and Tourism. A ceiling of Rs 1.15 billion has been set for the Office of the Chief Minister and the Council of Ministers, and Rs 133.6 million for the Ministry of Economic Affairs.

Meanwhile, the provincial government is proceeding with preparations for the upcoming budget, prioritising agriculture, tourism, and health.

Budget priorities will be determined based on the province's second five-year plan, according to the Ministry of Economic Affairs, which has begun discussions with line ministries on budget formulation.

A constitutional provision requires provincial governments to make their financial year budget estimates public by Asadh 1 in the lunar calendar.

By RSS