The unit, established under Baikuntha Aryal, chief of the Economic Policy Analysis Division at the finance ministry, comprises high-ranking officials of the National Planning Commission, Nepal Rastra Bank, Financial Comptroller General Office, Inland Revenue Division, Central Bureau of Statistics and the revenue division of the finance ministry.[break]
“The main responsibility of the unit is to conduct periodic data analysis of the government´s revenue collection and expenditure and extend recommendations for policy intervention,” a high-ranking official of the finance ministry said. “It will also identify revenue-expenditure gaps and suggest to the government on ways to bridge those gaps.”
The move to establish the unit comes at a time when the government has been failing to increase capital spending despite allocation of budget. At the same time the International Monetary Fund recently identified scope for further tax and customs administration reforms, although it commended the enhanced revenue mobilization efforts.
The IMF, over the medium-term, has suggested that the government increase its ability to implement the budget (particularly capital expenditure), effectively utilize donor resources and eliminate quasi-fiscal liabilities in state-owned enterprises and financial sectors.
“We are currently gathering all available information and data related to revenue and expenditure to conduct a thorough study on matters that could improve quality of public spending and enhance fiscal discipline,” the official said, indicating that the government is gradually moving away from the practice of making decisions without conducting ample researches.
The finance ministry has lately been laying emphasis on research-oriented works and data mining to understand trends properly and discover patterns so as to aid policy formation and decision-making processes.
Earlier this fiscal year, it also created the Economic Policy Analysis Division by splitting the Economic Operations and Policy Analysis Division so as to focus more on research-oriented works and data generation and analysis. These activities, the ministry believes, would help in making projections on the economy and the financial sector and flag warnings in advance.
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