Finance Minister Rameshwor Khanal Cuts Government Expenditure to Optimize Budget
Finance Minister Rameshwor Khanal has implemented significant reductions in the current expenditure segment of the national budget to control government spending. While capital allocations for small-scale projects have been temporarily frozen, several corrective measures have been introduced in recurrent expenses. These steps aim to manage upcoming financial demands using the budget prepared by the previous administration.
The minister’s decision comes amid rising pressure for resources due to the approaching general elections, ongoing reconstruction, and relief programs. Most of the measures Khanal has taken align with recommendations he provided to the High-Level Economic Reform Advisory Commission established by the previous government. By targeting problem areas, the government expects to mobilize approximately Rs. 1.20 Kharba, reducing the need for additional funding for election and reconstruction efforts. The total budget for this fiscal year is Rs. 19.64 Kharba.
As part of expenditure rationalization, the government has discontinued meeting allowances for routine work and housing allowances for officials using government, private, or personal accommodations. Items damaged during recent protests, such as chairs, tables, and sofas, will be reused to reduce unnecessary purchases. Ministries are also instructed to assign homes only according to operational requirements and avoid high-cost locations.
To improve efficiency, external consultancy services will no longer be employed where existing staff can perform the work. The government has decided to ensure public infrastructure following widespread destruction during the protests, ensuring reconstruction costs are partially mitigated. Organizational restructuring will also take place, with temporary or contract staff limited and long-term obligations avoided in expert services. Advisors for ministers, except senior officials, will no longer be appointed.
Foreign travel and official representation have been restricted to essential purposes. Government events such as training, seminars, and workshops will be conducted online or in government facilities where possible. Only authorized representatives may attend international events, with a maximum of ten participants allowed in mandatory programs led by the head of state or government. Key departments, including the National Investigation and Revenue Investigation Departments, have been reassigned to relevant ministries to enhance accountability and efficiency.
The government has also decided to focus investments only on profitable projects, aid-supported initiatives, and those with citizen obligations. Institutions unable to generate returns will no longer receive additional investment. Vehicle allocation, luxury item procurement, and subsidies for non-essential benefits have been restricted, while large-scale capital projects will continue. Low-priority, fragmented, or incomplete projects under provincial and local administration have been frozen to ensure efficient use of public funds.
