The Ministry of Finance has issued budget formulation guidelines for the upcoming Fiscal Year 2025/26, emphasizing the need for efficient resource management. Citing financial constraints, the ministry has instructed all thematic ministries to propose only well-prepared, high-priority projects that ensure good returns for public spending.
The guidelines call for economic spending, elimination of duplication, and inclusion of only feasible plans. New projects must undergo adequate preparation and cost-benefit analysis, while sufficient funding must be ensured for ongoing projects. The Finance Ministry has made it clear that it will give priority to national pride and other high-priority projects, discouraging the allocation of resources to small, scattered initiatives.
To make budget formulation realistic and result-oriented, ministries must enter their projects into the Line Ministry Budget Information System (LMBIS) by March 28. The National Resource Estimates Committee under the National Planning Commission has set a ceiling of Rs 1,965 billion for the upcoming budget, and all proposals must adhere to this limit. The guidelines also emphasize minimizing post-budget amendments by proposing realistic allocations from the outset.
The Ministry of Finance has specified that budget allocations should align strictly with project objectives, avoiding activities that create long-term liabilities. Ministries have been urged to propose only essential budgets for current expenditures while ensuring adequate allocations to prevent additional disbursement requests later.
Projects of a similar nature, currently spread across different sub-headings, must be integrated for better management. The guidelines state that the budget for new projects should be proposed only after securing adequate funds for the projects. Additionally, the Ministry of Finance stated that only projects listed in the National Planning Commission’s project bank will be considered for funding, and new projects lacking feasibility studies will not receive budget allocations.
The guidelines stress avoiding duplication across ministries and prioritizing post-disaster reconstruction work.
Even projects under conditional grants must be reevaluated to ensure they align with national priorities and continuity given to only those deemed necessary. Ministries should not propose new projects that lack full preparation or a clear investment plan. Additionally, they must allocate sufficient funds to cover liabilities and salary provisions for programs under conditional grants, state the guidelines.
New projects will be considered only after meeting financial obligations related to supplementary and special grants. Ministries have also been urged to reduce current expenses and ensure cost-effectiveness in software procurement, consulting services, and system development. Budget allocations for furniture, fixtures, and decorations will only be approved in urgent cases. -- RSS
