NNRFC fixes minimum threshold
Kathmandu, May 1
The National Natural Resources and Fiscal Commission (NNRFC) has fixed a minimum threshold of revenue-sharing and equalisation grant with the 753 local units.
“To ensure minimum resources to local units like Narphu rural municipality of Upper Manang, among others, we have fixed minimum ceiling of revenue-sharing and equalisation grant for next fiscal 2018-19,” said Baikuntha Aryal, secretary of NNRFC.
According to NNRFC, around Rs 53.82 billion each will be shared with the local levels from next fiscal as the Intergovernmental Fiscal Management Act has envisioned sharing 30 per cent of value added tax (VAT) and excise tax with the local and provincial levels (50 per cent each).
“The volume of revenue that is shared with local units is expected to hover at Rs 53.82 billion in the next fiscal and a similar amount with the provinces as well,” said Aryal. “While sharing the revenue that goes to the local level, each local body will get no less than Rs 60 million from the revenue shared with local level.”
The NNRFC has developed a formula for revenue-sharing based on the size of the population, human development index, demand of development and projects transferred from the central level for execution, among others. But the revenue-sharing formula might not be sufficient for some local units that are uniquely diverse, as per Aryal.
The NNRFC has also fixed the lower ceiling of equalisation grant. As per the lower ceiling fixed by NNRFC, every local unit will get a grant of no less than Rs 30 million in the next fiscal.
However, NNRFC has not fixed lower ceiling on revenue-sharing and equalisation grant for provinces. NNRFC has developed a formula for equalisation grant with the sub-national governments based on various parameters, namely, human development index, status of balanced development, requirement of resources and status of socio-economic discrimination, among others.
The provincial governments have to present their budget to the provincial assembly (Parliament) by mid-June or a month before the new fiscal year begins. As per the provision of the Constitution, federal government has to present its budget two weeks ahead of the provincial budget and provinces have to give a final shape to their budget by making necessary adjustments as per the federal budget. The local governments have to submit their budget to the budget assembly 20 days ahead of the fiscal year calendar.
