Kathmandu, November 16

The Ministry of Finance (MoF) is transferring the second instalment of government grant worth Rs 75 billion to all 753 local units tomorrow.

As per the provision of the Appropriation Act, the government has to release the first instalment to local units in the beginning of the fiscal year — mid-July, second in mid-November and third in mid-March. It has released only the first instalment of the total grant worth Rs 225 billion for this fiscal to the local units.

Earlier, MoF had sought the Cabinet’s approval to defer the schedule of releasing the second instalment of the grant to local bodies due to lack of resources. However, the government has not taken any decision to postpone the schedule.

For the current fiscal year, the government has allocated equalisation and conditional grants to local units.

“As per the condition of Appropriation Act, the MoF must transfer the second instalment in mid-November and entire local units will receive it tomorrow,” Kewal Prasad Bhandari, chief of Budget and Programme Division of MoF, stated. “Even though we all know that the local units have not been able to spend the first instalment, the MoF is compelled to transfer the second instalment as per the provision of Appropriation Act.”

The government has been unable to track the real-time expenditure of local units. After a long debate on a system to track the real-time expenditure of local units, MoF and the Ministry of Federal Affairs and Local Development have begun the process to expand Local Level Financial Management Information System (LLFMIS) to 753 local units.

“Once the system becomes fully operational, the Financial Comptroller General Office will be able to keep tabs of real-time expenditure of local units, but it will take a few months,” Bhandari informed.

Even as treasury surplus in mid-October stood at a whopping Rs 246 billion, the government can utilise only Rs 78 billion because rest of the budget has been allocated for reconstruction fund and other fixed types of liabilities.

According to MoF, rural municipalities will get between Rs 100 million and Rs 390 million; municipalities will get Rs 150 million to Rs 430 million, sub-metropolitans will get Rs 400 million to Rs 630 million and metropolitan cities will get Rs 560 million to Rs 1.24 billion.

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