Budget release ongoing for suspended projects: FM Khanal

KATHMANDU: Finance Minister Rameshwar Khanal has said that the government has begun releasing budgets for suspended projects based on their necessity and priority.

Responding to a query from National Assembly member Bhuwan Bahadur Sunar during Wednesday’s session, Minister Khanal informed lawmakers that funds for several projects have already been unfrozen and implementation has commenced.

He explained that when the current government assumed office, it faced significant financial pressure to mobilize large resources for the reconstruction and repair of structures damaged during protests, as well as to resume essential public services. In that context, the Cabinet decided to suspend unproductive projects to manage limited resources effectively.

Khanal also noted that substantial funding was required to conduct the National Assembly and House of Representatives elections.

Limited allocations to ongoing and priority projects had created financial liabilities in some cases, making it difficult to clear payments, which further necessitated the temporary suspension of certain plans.

Clarifying the criteria, the Finance Minister stated that only projects lacking adequate preparation — including those without completed designs and cost estimates, those yet to enter procurement processes, and small, fragmented schemes unlikely to yield immediate macroeconomic benefits — were put on hold.

However, projects with completed designs and estimates, those that had entered the tender process, ongoing multi-year projects, and schemes with signed agreements with user committees are being gradually released through the respective ministries.

According to Khanal, under this framework, funding for many projects has already been cleared and implementation is either underway or set to begin shortly.

He added that the decision to cut unproductive spending and ensure fiscal discipline while reallocating resources to essential sectors was taken by the Cabinet on Sept 21, in line with efforts to maintain financial prudence and effective budget management.