The Finance Ministry on Tuesday decided to cut the budget for the federal government by 20 percent following the financial pressure the country is facing.

The 20 percent of the budget approved for all ministries and agencies under different headings like fuel, repair works, printing and information publication, information system and software operating costs, travelling and other allowances and programme expenses will be cut.

Similarly, the ministry has cut budget for employee training, meetings and seminars and workshops and miscellaneous expenses, machineries, furniture and fixtures, structural buildings and among others with immediate effect, according to the ministry.

“The adverse effect in the global supply chain post Covid-19 pandemic, Russia-Ukraine war and an import ban to preserve the depleting foreign exchange reserves resulted in the contraction of economic activities,” reads the statement.

“All these resulted in the below target revenue collection in the first half of the current fiscal year.”

“The pressure on the recurrent expenditure has increased along with increased liabilities for salary, pension and social security, subsidy on chemical fertiliser and disaster management," according to the statement.

As the amount allocated for paying the interest of foreign loans has become insufficient with the increment in the interest of the domestic loans amid weakening of the Nepali currency against the US dollar, there has been pressure on the resources of the Nepal government.

Currently, the treasury in the current fiscal year remains at a deficit of Rs90 billion, according to the ministry.

Under these circumstances, the ministry, however, said it necessary to reprioritise the expenses to manage the funds for national pride projects and those projects and programmes which will create more job opportunities.