Nepal's new government is planning to cut military and Royal Palace expenditures in the forthcoming budget.
The new budget would not create liabilities in palace and the army expenditures, Finance Minister Ram Sharan Mahat said responding to a motion of public importance presented by CPN-UML leader and Lawmaker Bharatmohan Adhikary at the House of Representatives on Wednesday.
The Royal Palace budget was increased by five fold to $8.7 million per year during King Gyanendra's direct rule.
Mahat said that the state coffer was misused during the Royal regime and assured that the government would probe such acts and punish the guilty.
From now on the government would not increase the Royal Palace expenditure and the Defence budget, he said.
The new economic policy would be introduced with a collective consensus and would be made inclusive and pro-poor, he said adding the government is preparing the groundwork for announcing the new budget for the fiscal year 2006-2007 in mid-June.