5.5 Budget in Nepal

Meaning: the annual financial plan of the government — an estimate of revenues and expenditures for the coming fiscal year, with the authority to spend resting on parliamentary approval. Constitutionally, the federal government must present the annual budget to the federal parliament; by settled practice Nepal's budget day is Jestha 15 (late May) — budgets since 2019 onward, a fixed calendar rare enough to be examinable. (Provinces and local governments pass their own budgets within the federal fiscal framework.)Types of budget (know all three axes):1. By balance: balanced, surplus, deficit (Nepal's norm — financed by borrowing);2. By technique/form:line-item (input-wise — the classic control format), performance/programme budget (activities and outputs), zero-based budgeting (every rupee justified anew, not incremental);3. By structure of expenditure:recurrent vs capital vs financing — the Nepali budget's three-line anatomy.The process of budget formulation (a six-step answer):1. Preparation and ceilings — Ministry of Finance (with NPC alignment) issues the Budget CallCircular to ministries (early in the fiscal year), setting forms, ceilings and the medium-term framework;2. Ministry proposals — line ministries estimate revenues and draft programmes/projects (new and continuing);3. Consultation and estimation — pre-budget consultations (stakeholders, provinces, private sector, parliament's committees); the resource estimate reconciles revenue projections (with NRB and revenue authorities), grants and borrowing headroom;4. Negotiation and prioritisation — MoF–ministry budget hearings trim and rank demands against ceilings (capital…