KATHMANDU, Sept 15: Two months into the fiscal year 2024/25, 103 out of 753 local bodies have yet to present their budgets to their respective councils. According to the Intergovernmental Fiscal Arrangement Act 2017, the federal government must present its budget by May 28, provincial governments by June 15, and local bodies by June 25. Despite the deadline for local levels passing over two months ago, many are still non-compliant. Last year, 42 local bodies missed the deadline.

The Ministry of Federal Affairs and General Administration reports that none of the local municipalities across the seven provinces have fully presented their budgets. In Madhesh Province, 47 out of 136 municipalities have yet to present their budgets. Similarly, 123 out of 137 local bodies in Koshi Province, 103 out of 119 in Bagmati Province, 82 out of 85 in Gandaki Province, 95 out of 109 in Lumbini Province, 74 out of 79 in Karnali Province, and 84 out of 88 in Sudurpashchim Province have announced their budgets.

Gandaki Province leads with the highest percentage of budget presentations at 96.5%, while Madhesh Province lags behind at 65.4%, indicating weaker financial governance and fiscal responsibility in Madhesh.

Despite the legal requirement to present budgets by June 25, many municipalities have failed to comply. As of September 5, 103 municipalities remain without budgets. Some that have presented their budgets may not have submitted the necessary details to the Central Statistics Office, leading to potential gaps in data. Past trends show that some municipalities fail to present budgets even by the end of the fiscal year.

The National Natural Resources and Fiscal Commission mandates that if a municipality cannot pass or approve its budget, it must submit a provisional budget in accordance with constitutional and legal obligations. In such cases, municipalities are required to pass a provisional bill to manage the interim period until the final budget is approved. However, most municipalities have neither presented a provisional budget nor a complete one by the deadline.

According to a source in the commission, the lack of an annual budget has caused the suspension of annual programs and halted daily administrative activities in many municipalities.

“Local bodies that fail to present a budget for any reason must grant financial authority to the municipal head within seven days of the assembly’s conclusion,” the source said. “Without this authority, accounts cannot be operated.” Godawari Municipality could not present its budget due to a legal case against the mayor, which has since been resolved.

Managing daily operations and administrative expenses has become increasingly difficult in municipalities that have not announced their budgets.

 
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