Rs 820bln required to run the federal system: MoF preliminary estimate

KATHMANDU: A preliminary estimate by the Ministry of Finance states that at least Rs 820 billion would be required to run the federal administration for the next three years, including the establishment of provincial infrastructure in the first phase, including the administrative units for the second tier of government.

A significant amount will be spent on buildings, vehicles, employees' training and the like in the first phase. Meeting the initial cost of Rs 800 billion will be challenging, Finance Secretary Shanker Prasad Adhikari said.

Around 40 billion alone will be required for civil servants expected to take voluntary retirement instead of adjustment in the new federal structure.

Legislature, Executive and Judiciary infrastructure are being set up in all the seven provinces while staff and offices will also be required. According to preliminary estimates, financial burden of Rs 10 billion will have to be faced for the establishment of the provincial structures.

The existing cost at the centre is expected to be less compared to the present with a limited number of ministries as per the new constitution.

Finance Secretary Adhikari, however, believes that the formation of a new government with a five-year mandate will attract investment in the country with the promotion of a favourable atmosphere, and thereby also help meet the expenses.