The local levels must make utmost use of their resources, as their performance will determine the amount of conditional grant it receives

Most of the 753 local levels, if not all, have presented their budget for 2019-20 in the respective assemblies by Tuesday, as required by the provision in the Intergovernmental Fiscal Management Act. They were required to do so by Asadh 10, or June 25 -- 20 days ahead of the end of the fiscal year. Under Nepal’s federal structure, there are six metropolises, 11 sub-metropolises, 276 municipalities and 460 rural municipalities. The local levels’ budgets come close on the heel of the federal and provincial budgets. Among the local levels, the six metropolises, namely Kathmandu, Pokhara, Lalitpur, Biratnagar, Birgunj and Bharatpur have presented a budget of Rs 34 billion. Kathmandu’s budget alone accounts for Rs 15.50 billion. It is apparent that the local levels, which are just starting to come to grips with the new federal structure, will not be able to generate the required revenue to meet their expenses. Thus apart from their own revenue, the local levels will finance their expenditures through grants transferred from the federal and provincial governments, shared revenue of the federal and provincial governments, and through internal borrowings.

The needs of the local levels vary from region to region and from place to place. But most of the local levels, from the metropolises to the rural municipalities, in their programmes and policies have given utmost priority to building infrastructure, such as roads and communications. Other priorities include the social sector, such as drinking water, education and healthcare, and environmental conservation. Some of the local level programmes are innovative. The Kathmandu Metropolis, in its budget for the next fiscal, has dedicated the year to the promotion and preservation of heritage and on building tourism infrastructure in view of the 2020 Visit Nepal Year. The local levels are greatly empowered under the new constitution, and they must prove that they are capable of carrying out their programmes efficiently.

There is a lot of money in the form of grants coming to the local levels from the central government as well as the provincial government. The federal government will be transferring a total of Rs 89.93 billion in equalisation grants to the local levels and another Rs 127.87 billion in conditional grants, a total of Rs 213.8 billion. It is upto the local levels to make the most of the resources as they become available, as their performance will largely determine how much of the conditional grant it receives. The federal government will transfer only 40 per cent of the conditional grant at the beginning of the next fiscal year, which begins in mid-July, while the remaining 60 per cent will depend on how the expenditures have been made. As for the equalisation grant, it is allocated largely based on the needs of development in the local levels, multi-dimensional poverty, status of infrastructure and socio-economic discrimination, as recommended by the National Natural Resources and Fiscal Commission. Apart from utilising the resources judiciously, the local levels must strive to raise more revenue locally in the years to come so as to be less and less dependent on the central or the provincial governments for grants.

Health insurance

Remittance plays a vital role in keeping the national economy afloat. However, the migrant workers who send money from abroad to their families back home get little support from the state. Their jobs abroad are insecure, and the host countries also do not ensure the rights that they are entitled to as per the standard set by the International Labour Organisation (ILO). The government recently signed labour pacts with a number of countries where a large number of Nepali workers are currently employed.

In view of these facts, the government has made it mandatory to get their health insured before they depart for overseas jobs. So a person leaving for foreign employment has to submit a copy of the health insurance ID card along with his/her work permit to the Department of Foreign Employment. The premium of Rs 2,500 will also cover insurance for five members of a family for a period of one year. Each of the family members will be entitled to health facilities worth up to Rs 200,000 in a year. The Insurance Board will pay the medical bill of the insured to the service provider. This provision will greatly help the families back home while the workers are away.