Kathmandu, January 20
The Ministry of Finance has stated that the government is exercising constitutional authority to transfer funds from various public service-oriented government accounts to the federal consolidated fund.
Speaking to journalists on Sunday, Finance Minister Bishnu Prasad Paudel explained that except for Guthi funds, the constitution requires all other funds received by the government to be deposited into the consolidated fund. Based on this provision, an ordinance has been introduced to transfer money from other government funds.
Minister Paudel assured that while the funds are being transferred, the government remains committed to the purposes for which these funds were originally established.
An earlier report by Onlinekhabar had highlighted concerns that transferring funds meant for public services to the consolidated fund could lead to their use for regular government expenses. Minister Paudel responded, affirming the government’s commitment to ensure the funds serve their intended purposes.
“There are 175 different government funds in Nepal. Some were created legally, while others lack a legal foundation. While some funds remain useful, others raise questions about their utility. This ordinance establishes a new framework for managing these funds,” Paudel said, adding, “However, the original objectives of these funds will not be neglected.”
Shrikrishna Nepal, the head of the Ministry’s Budget Division, clarified that the transfer of funds is not for revenue collection but to maintain the balance of the federal consolidated fund.
“This money is not being brought in as revenue or a budgetary source. It is intended only to balance the federal consolidated fund. The funds will not be used for any purpose other than maintaining this balance,” he said.
Nepal also mentioned that some funds lack clear legal foundations, and the ordinance allows for the dissolution of such funds if necessary.
“Section 4A of the Financial Responsibility Act, amended by the ordinance, recognises the existence of these funds but allows their balances to be used to stabilise the federal consolidated fund. If the fund faces significant deficits requiring overdrafts, these balances can be considered as a buffer,” he explained.
Government accounting standards define what qualifies as a government fund, Nepal added. “This provision ensures that while one government account remains empty and unable to process payments, another account doesn’t sit idle with unused money,” he noted.
However, funds held by institutions such as Nepal Rastra Bank will not be transferred to the federal consolidated fund, he clarified.
Finance Ministry spokesperson Mahesh Bhattarai stated that the ordinance was necessary because the federal consolidated fund has been running at a deficit for a decade, forcing the government to borrow at interest to manage resources.
