Budgetary framework and its relationship with development plan - - PowerPoint PPT Presentation

Budgetary framework and its relationship with development plan

Karna Prasad Timilsina Chief Customs Officer Nepal

Prosperous Nepal happy Nepali ---- Vision of 15th plan Present Status , Revenue 24.6% of GDP Average annual growth of revenue 20.4 % in last 10 years Foreign aid 3.3% of total GDP Per capita income 1012 USD

Policy priorities

• government have set a five-year target of doubling

per capita income, high and equitable national income

• agriculture production, achieving double digit

growth,

• completing a few mega projects,
• creating sufficient employment opportunities
• Good governance and well being standard of living
• Prosperity and Happiness is main target

National fiscal governance, or domestic fiscal frameworks, can be defined as those rules, regulations and procedures that influence how budgetary policy is planned, approved, carried out, monitored and evaluated. This includes particularly:

Fiscal government objectives

• attaining sound budgetary positions in

particular by containing the deficit bias, i.e. tackling the tendency to conduct unsustainable fiscal policies giving rise to high deficits and increasing debt ratios,

• reducing the cyclicality of fiscal policy making

and

• improving the efficiency of public spending.

Major guidelines for budget

Finance Minister shall present the estimate of the revenue and expenditure for every fiscal year before the joint meeting of the houses(parliament) (Article 119): fixed date jestha 15 for budget presentation .

• Estimates of Revenue
• Expenditure (Non –votable amounts): above

consolidated fund

• Expenditures from consolidated fund
• Progress of the past year
• National Natural resource and fiscal commission act

2017

• Inter governmental fiscal management act 2017

Budget formulation process top down

• Budget and Resource Committee at NPC set the

following:

• Macroeconomic Framework
• Medium Term Expenditure Framework
• Size of the budget
• Major responsibility Ministry of Finance set the budget

ceiling

• Budget ceiling is circulated to the ministries, ministries

to departments and departments to spending units and province and local government

• Budget Formulation Guidelines 2072 has set the

formulation calendar(Start from November)

Bottom up

Principle of budget distribution to province and local government

• Revenue sharing
• Fiscal equalization grants
• Conditional grants
• Internal loan
• Regular meeting of inter governmental fiscal

management committee Central government allocation the budget basic of above principle with the recommendation of National natural resource and fiscal commission

Priorities of budget 2018

Strategic Project-Centric Investment to Kick Start High Economic Growth Modernization and Commercialization of Agriculture, Industry, Tourism and Service Sector Catalytic Business Environment: Encouraged Investment Rapid Economic Development through Coordinated Mobilization of Government, Private and Cooperative Sectors Quality Improvement in Education, Health and Drinking Water Services Social Protection: State Responsibility Development for all , balanced development & scientific use of land Budgetary system reforms and resource management .

Basic of Plan formulation

• Directive Principles and Policies of the Constitution
• Political party manifesto
• Other sectorial perspective plans
• SDGs and other government commitments, and
• Domestic issues (like inflation, low growth,

unemployment etc)

• Contemporary Challenges of the development (like

climate change and global economic, fuel and food crisis)

Effectiveness of budget for Plan

• Multi-year forecasts (MTEF, 3 Years forecast

practices)

• National Natural resources and fiscal commission
• Budget Formulation Guidelines (2015) and

implementation Guidelines

• Budget Calendar
• Spending based on the approved program
• Online submission of budget by ministries to the

MOF

• Web- based Budget release system : the TSA

system

• Annual Statutory audit

Strength of Budget system

• Perspective budgeting( Medium-Term Budgetary

Framework)

• Focus on: productivity and 'programs'
• Gear up capital budget (size and implementation)
• Enhance 'implementation capability', 'internal control

system' and 'M&E'

• Performance audit
• Strengthen parliamentary control
• Natural resource & fiscal commission - for

recommendation to MoF

MTEF

MTEF is a three‐year framework of public expenditure

• It is a tool for determining the available

resources and allocating these resources in line with government priorities

• It is a transparent planning and budget

formulation process

• It helps to match top‐down resource envelope

with bottom‐ up medium‐term costs of existing policy in the context of the annual budget process

Role of MTEF

• Three year rolling budget, link the periodic plan
• bjectives to annual budget’s programs and activities
• Clearly defines priority of proposed programs and

projects of the five year plan that contribute the poverty reduction most.

• Help to formulate development budget, predict

government future expenditure

• Help development budget formulation more realistic

Helps to prioritize the development activities into priority 1(P1), priority 2 (P2) and priority 3(P3) listed in the annual budget during budget formulation. .

Summary

• identifying factors affecting alignment between

strategic plans and annual budgets;

• Policy priorities
• 15th 5 years plan and budget forecasting
• Policies and institution are established for fiscal

government

• MTEF has key role to main fiscal governmance

and plan formulation Constitutional provision of Auditing system of Budget and Program

Any questions ? Thank you !