The government has imposed restrictions on new government building construction, vehicle purchases and foreign training funded by public money as part of its measures while preparing the revised budget for FY27.
The Finance Division issued a budget circular on November 9, directing ministries and divisions to reduce expenditure, limit development projects, and prioritize essential sectors.
According to the circular, the revised budget expenditure must not exceed the total ceiling set in the original budget for FY27. Funds from the development budget cannot be transferred to the operating budget.
The government has suspended new residential, non-residential and other government building construction, except facilities under the Ministries of Education, Health and Agriculture. However, projects with at least 70 percent physical progress may receive funds with Finance Division approval. Other urgent construction projects will also require separate approval.
Allocations for purchasing all types of vehicles have also been suspended. Exceptions include replacing TO&E-listed vehicles more than 10 years old and purchasing essential vehicles for newly established government institutions, subject to Finance Division approval.
Except for ambulances and security vehicles, all newly purchased or replacement cars and jeeps must be fully electric. The condition may be relaxed for development projects approved before July 8, 2026.
The circular also bars allocations for land acquisition under the operating budget and interest-free car purchase advances for government employees.
Government-funded foreign training, seminars, symposiums and workshops have been suspended. Limited allocations may be retained for essential foreign visits and training with approval from the competent authorities. Ministries have also been asked to ensure austerity in spending on hospitality, seminars and official events.
For preparing revised revenue and operating expenditure estimates, ministries must consider actual revenue and expenditure trends during the first six months of the previous two fiscal years and the first four months of the current fiscal year. Salary and allowance estimates should follow the National Pay Scale 2026.
Regarding the revised Annual Development Program (ADP), the circular directs ministries to limit the number of projects and prioritize the government's strategic objectives, electoral manifesto and essential development needs.
Priority will go to projects involving foreign loans and grants, human development, agriculture, power generation, agro-based industries, poverty reduction, climate change, disaster management and rehabilitation. Projects scheduled for completion in FY27 will also receive priority.
The circular recommends merging small projects with similar objectives into cluster projects and excluding projects without allocations from the main revised ADP.
It also directs ministries to reduce allocations for slow-moving projects and redirect funds to priority projects with faster implementation prospects, while ensuring adequate local currency allocations for completing ongoing projects on time.
All revised budget proposals must receive scrutiny and approval from the respective Budget Management Committees, with meeting minutes submitted alongside the proposals. Ministries must also update their revenue collection, expenditure and annual procurement plans after approval.
The Finance Division has set November 26 as the deadline for submitting revised operating budget and non-ADP scheme estimates. Revised ADP and project estimates must also reach the Finance Division and relevant divisions of the Planning Commission by the same date.