Following the federal and provincial budgets, most of the local bodies presented their budgets in the municipal assemblies today. A few urban and rural municipalities have presented their budget ahead of the final deadline that is today.
According to the provision of the Intergovernmental Fiscal Management Act, local governments must announce their budgets in their respective assemblies by Asadh 10 of the Nepali calendar, some 20 days before the beginning of the new fiscal year. Based on the law, most of the metropolises, sub-metropolises, urban and rural municipalities have presented their budgets in the municipal assemblies today.
The Ministry of Federal Affairs and General Administration (MoFAGA) – in coordination with the Finance Ministry – had forwarded a circular to all the local bodies to present their budget by Asadh 10. But some 100 municipalities failed to present their budget by today’ deadline, according to the law. In the current fiscal year some 25 municipalities have failed to bring the budget, some 40 local governments had announced their budget without presenting ‘Programmes and Policies’.
Those municipalities, which were unable to present their budget today’s deadline will face problems in receiving the grant provided by the Finance Ministry, according to the joint secretary at the Federal Ministry Jaya Narayan Acharya.
Among six metropolis, Kathmandu Metropolitan City has presented a budget of Rs 15.50 billion – which is the largest among all the 753 local governments – for the next fiscal year. Likewise, Pokhara metropolis has presented a budget of Rs 7.54 billion, Lalitpur Rs 5.17 billion, Biratnagar Rs 5.12 billion, Birgunj Rs 4.48 billion and Bharatpur has presented a budget of Rs 3.37 billion for the next fiscal year. Likewise, Hetauda sub-metropolitan presented a budget of Rs 1.81 billion for the fiscal year 2019-20.
The local governments will finance their budgets through their own revenue, grant transferred from the federal and provincial governments, revenue shared from the federal government and provincial governments and through internal debt, according to the Constitution.
The total of 753 local governments will be able to mobilise revenue – shared from the divisible fund and calculated according to the formula prepared by the National Natural Resources and Fiscal Commission – worth Rs 65.45 billion for next fiscal 2019-20. They will directly get 15 per cent of the total value added tax (VAT) and internal excise, apart from 25 per cent royalty collected from mountaineering, electricity, forest, mines and minerals, water resources and other natural resources, according to the Constitution.
Likewise, the federal government will transfer a total of Rs 89.93 billion as equalisation grant and Rs 123.87 billion as conditional grant to the local governments. The provincial governments will also transfer grants to the local governments, under fiscal transfer.
Grants from the federal government are transferred in four tranches – every quarter – from the beginning of the fiscal year in mid-July. The federal government has increased grant amount to local bodies by Rs 18.77 billion to Rs 213.82 billion for fiscal year 2019-20.
The federal government transfers 40 per cent of the conditional grant in the beginning of the fiscal year and the remaining amount is transferred based on the performance of the expenses.
According to the National Natural Resources and Fiscal Commission, equalisation grant has been allocated based on the need of development in local governments including multidimensional poverty, socioeconomic discrimination and status of infrastructure development in local units.
The National Natural Resources and Fiscal Commission is the constitutional body that recommends required fiscal transfer to sub-national governments and manages the utilisation of natural resources in an undisputed manner but this year, according to the commission sources, the Finance Ministry has overruled the commission’s authority in budgetary process.
According to the provision of the Intergovernmental Fiscal Management Act, local governments must announce their budgets in their respective assemblies by Asadh 10 of the Nepali calendar, some 20 days before the beginning of the new fiscal year. Based on the law, most of the metropolises, sub-metropolises, urban and rural municipalities have presented their budgets in the municipal assemblies today.
The Ministry of Federal Affairs and General Administration (MoFAGA) – in coordination with the Finance Ministry – had forwarded a circular to all the local bodies to present their budget by Asadh 10. But some 100 municipalities failed to present their budget by today’ deadline, according to the law. In the current fiscal year some 25 municipalities have failed to bring the budget, some 40 local governments had announced their budget without presenting ‘Programmes and Policies’.
Those municipalities, which were unable to present their budget today’s deadline will face problems in receiving the grant provided by the Finance Ministry, according to the joint secretary at the Federal Ministry Jaya Narayan Acharya.
Among six metropolis, Kathmandu Metropolitan City has presented a budget of Rs 15.50 billion – which is the largest among all the 753 local governments – for the next fiscal year. Likewise, Pokhara metropolis has presented a budget of Rs 7.54 billion, Lalitpur Rs 5.17 billion, Biratnagar Rs 5.12 billion, Birgunj Rs 4.48 billion and Bharatpur has presented a budget of Rs 3.37 billion for the next fiscal year. Likewise, Hetauda sub-metropolitan presented a budget of Rs 1.81 billion for the fiscal year 2019-20.
The local governments will finance their budgets through their own revenue, grant transferred from the federal and provincial governments, revenue shared from the federal government and provincial governments and through internal debt, according to the Constitution.
The total of 753 local governments will be able to mobilise revenue – shared from the divisible fund and calculated according to the formula prepared by the National Natural Resources and Fiscal Commission – worth Rs 65.45 billion for next fiscal 2019-20. They will directly get 15 per cent of the total value added tax (VAT) and internal excise, apart from 25 per cent royalty collected from mountaineering, electricity, forest, mines and minerals, water resources and other natural resources, according to the Constitution.
Likewise, the federal government will transfer a total of Rs 89.93 billion as equalisation grant and Rs 123.87 billion as conditional grant to the local governments. The provincial governments will also transfer grants to the local governments, under fiscal transfer.
Grants from the federal government are transferred in four tranches – every quarter – from the beginning of the fiscal year in mid-July. The federal government has increased grant amount to local bodies by Rs 18.77 billion to Rs 213.82 billion for fiscal year 2019-20.
The federal government transfers 40 per cent of the conditional grant in the beginning of the fiscal year and the remaining amount is transferred based on the performance of the expenses.
According to the National Natural Resources and Fiscal Commission, equalisation grant has been allocated based on the need of development in local governments including multidimensional poverty, socioeconomic discrimination and status of infrastructure development in local units.
The National Natural Resources and Fiscal Commission is the constitutional body that recommends required fiscal transfer to sub-national governments and manages the utilisation of natural resources in an undisputed manner but this year, according to the commission sources, the Finance Ministry has overruled the commission’s authority in budgetary process.
