Municipalities and municipalities can propose projects worth a maximum of 10 million to 70 million, sub-metropolitan cities/metropolitan cities from 30 million to 150 million and provinces from 100 million to 300 million.
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Now the federal government is going to provide supplementary and special subsidies to the provinces and local levels based on the level of revenue capacity, prosperity and physical infrastructure. Shivraj Adhikari, Vice Chairman of the National Planning Commission, said that new arrangements have been made regarding supplementary and special grants to make equality and fiscal federalism more effective.
In a press conference organized by the Commission on Thursday to provide information on contemporary issues, the official informed about the new provision in the 'Procedures for Supplementary Grants 2081'.
In the new procedure brought by abolishing the old procedure, the government has reduced the maximum limit of supplementary subsidy, while the provincial and local levels have arranged to receive subsidy from the Union based on their previous revenue capacity. According to this, previously the total cost of projects/programs to be implemented by rural municipalities and municipalities for supplementary grants was from 10 million to 10 million rupees. Now this limit has been fixed from 1 crore to 7 crore.
'The total cost of the project program to be implemented by the sub-metropolitan city and metropolis has been reduced from 50 million to 250 million and it has been established that projects of 30 million to 150 million can be proposed.' Among those that can be done, now only supplementary grants can be offered for projects between 100 million to 300 million rupees.' When proposing the total cost of a
project or program, it is also mentioned in the procedure that such project or program should be completed within a maximum of three years. It has also been arranged that the Planning Commission should publish a notification by the end of November each year and request proposals for projects or programs to be implemented with supplementary grants from the state or local level in the next financial year.
As the previous arrangements regarding supplementary grants were discriminatory, the vice-president officer said that by changing the arrangement, the weaker local levels will get more and the stronger ones will get less. According to the National Planning Commission, a system based on equality has been implemented in the distribution of resources through supplementary grants and special grants. The vice chairman of the National Planning Commission said that the equity system has been implemented in the distribution of resources through supplementary grants and special grants to make equality and financial federalism more effective.
According to the new system, municipalities and provinces are ranked based on their level of revenue capacity, prosperity and physical infrastructure. This ranking is considered as the basis while distributing resources,'' he said, 'because of which relatively poor municipalities receive more supplementary subsidies from the central government. From the point of view of financial federalism, the level of independence of local governments based on resource mobilization is presented through this index.
The official claims that this system will give priority to human development, job creation and productivity growth. Not only in physical development, this system will help strengthen financial federalism across the country by ensuring equitable access to resources, the vice president said. The commission has arranged that only a maximum of 10 projects or programs can be proposed in the case of the province, and a maximum of three in the case of the municipality.
When constructing the index of 753 municipalities, it seems that it ranges from close to zero to 29. According to the commission, seven changed points were discovered by statistical method after sorting. Based on those changing points, the local levels are divided into seven parts from 'A to Six'.
According to this, the federal government will give a maximum of 80 local levels in 'A' category, 70 for 'B' category, 60 for 'C' category, 50 for 'D' category, 40 for 'E' category, 30 for 'F' category and 30 for 'C' category. There is a 20 percent cost sharing arrangement for the local level. In the division, there are 155 in 'A' category, 150 in 'B', 125 in 'C', 147 in 'D', 118 in 'E', 39 in 'F' and 19 in 'C' category.
The National Planning Commission is going to manage and update the project bank, said Shivraj Adhikari, vice-chairman of the commission. "The number of projects in the project bank is very high, the resources are scattered. It is creating difficulty in maintaining the efficient use of resources," he said, "The projects are not clearly defined, most of the activities are listed in the project bank, but many of these projects are included without preparation."
