The commission has recommended that the government provide Rs 61.5 billion 3.2 billion to the provincial government and Rs 90.2 billion 4.6 billion to the municipalities as fiscal equalization grants for the fiscal year 2083/84.
We use Google Cloud Translation Services. Google requires we provide the following disclaimer relating to use of this service:
This service may contain translations powered by Google. Google disclaims all warranties related to the translations, expressed or implied, including any warranties of accuracy, reliability, and any implied warranties of merchantability, fitness for a particular purpose, and noninfringement.
The National Natural Resources and Finance Commission has recommended that the federal government provide Rs 151.70 billion 78 crore towards fiscal equalization grants to the provinces and municipalities in the fiscal year 2083/84. The commission has recommended that the government provide Rs 61.50 billion 32 million to the provincial government and Rs 90.20 billion 46 million to the municipalities as fiscal equalization grants for the fiscal year 2083/84.
In the current fiscal year, Rs 60.66 billion was allocated to the provinces and Rs 88.96 billion to the municipalities on the recommendation of the commission. The commission will provide financial equalization grants on the basis of minimum grants and formula-based grants and performance. The commission has recommended the highest amount of Rs 10.63 billion 23 million to Karnali Province and the lowest amount of Rs 7.84 billion 82 million to Gandaki Province for fiscal equalization grants.
Rs 9.11 billion has been recommended for Koshi, Rs 7.84 billion for Madhesh, Rs 8.42 billion for Bagmati, Rs 7.84 billion for Gandaki, Rs 8.56 billion for Lumbini, Rs 10.63 billion for Karnali and Rs 9.66 billion for Sudurpaschim.
The total financial equalization grant has been determined by calculating the minimum grant as per Sub-section 3 of Section 16 of the National Natural Resources and Finance Commission Act, 2074, the formula-based grant to be received as per the basis specified in Sub-section 1 of Section 16 of the same Act and the grant to be received on the basis of performance evaluation as per the provision in Sub-section 2 of Section 3 of the said Act.
The Commission has also stated that while calculating the grant amount, it has been seen that 40 municipalities will receive less than Rs 70 million from the minimum grant and formula-based grant. However, the Commission has determined that this amount is not sufficient to fulfill the constitutionally mandated responsibilities of the local government at the minimum level and has recommended that each local government receive at least Rs 70 million from the minimum grant and formula-based grant. The commission also stated that the financial equalization grant was determined by deducting about 10.80 percent from the amount for the formula of the metropolitan city and adding that amount to the grants of 40 municipalities.
A minimum equalization grant of Rs 15.37 billion 58 million has been recommended for transfer to the province in the coming fiscal year. Which is 25 percent of the total financial equalization grant that the provincial government will receive. The minimum grant share that the province will receive has been determined by giving a 50/50 percent weight to population and area.
The commission stated that the increase in the share of conditional grant in the total grant allocated for transfer to the province and the decrease in the share of financial equalization cannot be taken positively. In the current fiscal year, equalization grant of Rs 60.66 billion was allocated for transfer to the province, which is 62.18 percent of the total grant.
Since then, conditional grant of Rs 30.35 billion was allocated, which was 31.10 percent of the total grant. In the fiscal year 2081/82, the share of equalization grant in total grants was 62.21 percent and the share of conditional grant was 26.80 percent. In the fiscal year 2080/81, the share of equalization grant in total grants was 55.84 percent and the share of conditional grant was 33.99 percent.
The Commission stated that data including population, area, human development index, economic and social inequality index in provincial and local governments, infrastructure development, road density, electricity facilities, information technology, drinking water, sanitation and urbanization status, expenditure requirements and revenue collection capacity and performance evaluation indicators were used in recommending financial equalization grants.
