Nepal | December 14, 2019

Local units struggle to spend allocated budget

Sabin Mishra

Kathmandu, December 11

The lack of spending capacity of the local units has resulted in Rs 150 billion, allocated to them as grant by the central government, remaining mostly unused.

Representatives of local units said they have been having a hard time to spend the allocated budget and grant from the central government due to some technical and practical difficulties that occurred while implementing their plans and programmes.

Local units had received grants in two tranches, worth Rs 75 billion each, from the government on July 17 and November 15, as per the provision of the annual budget of fiscal year 2017-18.

Man Bahadur GC, mayor of Pokhara metropolitan city, said delays in finalising the plans and programmes, unavailability of technical resources and other preparatory works have affected the budget spending schedule till date.

“Most of the local units faced the same problem — inability to finalise the plans and budget estimation on time,” GC stated. “Also, the government was unable to mobilise the technical human resources for estimation of the programmes.”

Similarly, Shiva Subedi, mayor of Butwal sub-metropolitan city, informed that preparatory works, festivals and provincial and parliamentary elections affected the budget implementation. “However, our expenditure should pick up pace in the
near future.”

“Members of the local consumer committees and contractors were also engaged in the election campaign, which directly affected the development activities and budget spending,” Subedi informed. “But our expenditure and development activities will quicken and we will be able to show some concrete results within the next three months.”

Representatives from both local units said delay in endorsement of Local Level Operation Act from the Legislature-Parliament also affected their working procedures. The Legislature-Parliament had endorsed the act, which defines the roles of local levels and their elected representatives, on September 20. “It took a long time for the act to come to force after the completion of local level elections, which halted our works and progress seemed slower,” Subedi stated.

He also dismissed the notion that the grant amount received by the local units will be frozen and said that local units would utilise the amount later on by saving it in their own coffers.

According to the Financial Comptroller General Office (FCGO), local levels have spent very nominal amount of grant provided by the central government till now. “The local levels are suffering from the same difficulty that has plagued the country for many years — lack of spending capacity,” JagannathDevkota, deputy financial comptroller general at FCGO, stated.

According to Devkota, most of the local units have spent lower portion of grant received from the central government in the nearly five months of the current fiscal year. “We don’t have the net figure yet, but we believe that a few units have spent up to 50 per cent of the total grant, but most local units are lagging in terms of spending their budget,” he said.

The government has allocated Rs 225 billion as the equalisation and conditional grants for local units. The government has to release third instalment of Rs 75 billion in mid-March.

As per the provision of the annual budget, 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.


A version of this article appears in print on December 12, 2017 of The Himalayan Times.


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