Local levels give ultimatum of seven days to MoF to rectify reduction in fiscal equalization grant

KATHMANDU, June 2: The representatives of the local levels across the country have issued a seven days ultimatum to the Ministry of Finance (MoF) to rectify its decision to cut grants to the sub-national governments.

They demanded the ministry to amend the decision to reduce the fiscal equalization grant by 25 percent. The local units are expecting to receive the grant in the last installments of the current fiscal year 2023/24.

The MoF has argued that it decided to cut the fiscal equalization grants due to low revenue collection this year. 

The National Association of Rural Municipalities and the Municipal Association of Nepal have warned to close all 753 local units and stage a protest at Singha Durbar if their demands are not addressed within seven days.  

On Sunday, representatives of both the associations staged a sit-in in front of the MoF.