KATHMANDU, JUNE 14

The provincial governments will present their provincial budget for fiscal year 2020- 21 in their respective provincial assemblies on Monday.

As per the provision of the Intergovernmental Fiscal Management Act, the provincial governments have to present their budget in the provincial assemblies by mid-June and local bodies have to present their budget at the local assemblies 20 days ahead of the next fiscal year calendar.

Bhesh Prasad Bhurtel, deputy financial comptroller general at Financial Comptroller General Office, said all the provincial governments have endorsed their respective provincial programmes and policies and completed their preparations for the upcoming fiscal year's budget.

“The provincial governments have already set their budget priority as the federal government has released the government's priority.

But, they will able to allocate budget for their respective projects and programmes,” he informed.

As the situation is going to be quite worrisome due to the coronavirus pandemic, the provincial governments have said that they will focus on health, infrastructure development and creating employment opportunities.

“Our main focus is to tackle this current situation by increasing the health budget and creating employment by accelerating development works,” said Kailash Prasad Dhungel, minister for economic affairs and planning of Bagmati Province.

Provincial governments rely on fiscal transfer from the federal government, revenue shared from the divisible fund and their own revenue sources (both tax and non-tax) to finance their budget. While the provincial governments can raise domestic debt to finance their budget, they have to obtain approval from the federal government to do so.

The provincial governments can also mobilise foreign grants as a source of budget financing following the approval of the federal government, as per the provision of Intergovernmental Fiscal Management Act.

Royalty from mountaineering, forests, mines and minerals, water and other natural resources are also shared with the provinces.

The provinces get 25 per cent of the total royalty and such royalty is available only for the affected areas of the provinces.

A version of this article appears in e-paper on June 15, 2020, of The Himalayan Times.