Finance ministry still to finalise grant amount for 744 local bodies

Kathmandu, April 29

The budget formulation process for next fiscal 2017-18 has yet to gather momentum, though only a month remains for the government to submit the budget to the Parliament as per the provision of the Constitution.

As the Election Commission (EC) has granted permission to the government to bring budget on time without any populist programme to influence the local polls, the government has to present the budget within a month if there is no amendment in the Constitution to defer the budget presentation date.

Budget formulation process has stalled as the line ministries have been delaying in sending local level programmes to the Ministry of Finance (MoF). As per the programmes submitted by the line ministries in various sectors like education, health, irrigation, roads and drinking water, among others, the MoF will allocate the grant to the 744 local bodies that came into operation very recently.

The MoF will provide grant directly to the local bodies based on their programmes, according to Finance Secretary Shanta Raj Subedi. “Once the ministries submit the programmes with required resources for next fiscal, then we will be able to give final shape to next fiscal’s budget.”

The local bodies are responsible to execute the programmes on their own as they will receive grant amount directly from MoF. The grant amount will be decided as per the development need of the local bodies — metropolitan, sub-metropolitan cities, municipalities and rural municipalities — according to MoF officials.

The MoF has said that the budget will not allocate grant for provinces this year because the provincial structure is yet to be set up. As the government has to conclude provincial and central level election by January 21, 2018, the provincial structures are also expected to be set up after the local polls, but the MoF will not allocate resources for the provinces in next fiscal, according to Subedi.

“As the Constitution has envisioned an independent commission for the distribution of revenue and utilisation of natural resources, the MoF is going to fix the grant amount for 744 local bodies based on their requirement to execute the projects submitted by them through the ministries.”

The Natural Resources and Financial Commission would be responsible to distribute resources to the local bodies, provinces and centre. However, the bill for the Natural Resources and Financial Commission is yet to be tabled at the Parliament.