Laxmi Capital News
Government restores practice of 3-year expenditure plans

After a gap of 12 years, the governmenthas prepared a separate document of three year projection of spending andproject planning. The government will soon table the document Medium-TermExpenditure Framework (MTEF) in the parliament to discuss along with the budgettabled on Tuesday. 

The National Planning Commission, theapex body that frames governments’ plans and policies, has prepared the MTEFand this is similar to the detailed red book but it has explained details abouteach projects and its rationale, charted out all the projects according toofficials of Ministry of Finance and National Planning Commission. 

Finance Minister Yuba Raj Khatiwada islikely to table the document which has already been prepared, officials ofMinistry of Finance informed. The document has already been sent for printingon Friday. The MTEF is an instrument which sets the three-year expenditurepriorities and budget for each sector plans are widely used in globally forproper budget planning in line with periodic development plans and policies.

Unlike in the past years, it ismandatory for the government to table the MTEF document in the parliament asper Inter- Governmental Fiscal Arrangement Act 2017 endorsed last year.According to the act, the MTEF has to justify rationale behind the projectselection, its objectives, and targeted milestones and amounts to be allocatedfor the projects in the next two fiscal years, and also progressindicators. 

“Application of MTEF enables thedevelopments projects more predictable because their budgets for next two yearsare also spelled out in it,” said TirthaDhakal, joint secretary of NPC addingthat it makes the budget cycle more dynamic. 

Dhakal also said the budget amountwritten in the MTEF for priority one (P1) projects for the following years is akind of assurance and project managements can plan their worksaccordingly. 
The sources of financing as well as its outcomes in figures for each projectare stated in the MTEF, which is believed to make a disciplined budget making andproper development planning. 

The government of Nepal had startedpreparing MTEF in 2003 in the tenth plan but was dropped without any clearreason after 2006. The budgetary plans and programs were updated accordinglyfollowing year, and some positive effects were visible thereafter, governmentofficials recount. Planners and development experts say this helps to makethe budget planning more predictable and practicable than allocating resourceswithout considering the goals set by development plans and also the past budgetallocation.

Shankar Sharma, who had introduced MTEFduring his stint as vice-chairman as National Planning Commission, said thatthe budget planning for the three years could not sustain along with changingPrime Ministers and ministers as well as even secretaries after 2006. “Every changing governments wanted to make separate budgets on their ownwithout considering the past works,” revealed Sharma. With the restoration ofthis MTEF, the budget and planning  becomes more sustainable and alsoaligned with long term plans and goals, Sharma added. 

All three tiers of the governmentsincluding provinces and local levels also have to prepare their own MTEF in thebudget making process. The provinces and locals will soon start budget making process.

Source: MyRepublica, 2nd June2018

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