KATHMANDU, Aug 7: The state’s law has mandated the local governments to announce their budget by June 24 (Asar 10 of Nepali month) every year but a large number of local bodies are found breaching the state rule on various pretexts.
The Intergovernmental Fiscal Arrangement Act 2017 has asked the village executive and municipal executive to submit the estimates of revenues and expenditures of the following fiscal year in the stipulated time whereas they need to endorse the budget by mid-July.
However, 108 local bodies have not introduced their budgets even one and half months after the deadline, according to the Ministry of Federal Affairs and General Administration (MoFAGA). There are 753 local governments in Nepal comprising six metropolitan cities, 11 sub-metropolises, 276 municipalities and 460 rural municipalities.
Health Ministry confirms 108 new cases of coronavirus across th...
Out of 753 local governments, 645 have announced their financial plans. This shows that 14.34 percent have missed the deadline this year. Out of these, 49 have not even conducted their assembly meetings, while 59 have failed to submit to the Line Ministry Budget Information System of the federal government.
A notable number of the local bodies breaching the government rule are from Madhesh Province. Out of 136 local bodies in Madhes Province, only 85 have had their budgets endorsed, while 53 have not been able to do so. Koshi Province has 16, Lumbini and Bagmati each has 12, Karnali Province has nine and Gandaki and Sudurpashchim provinces each have four such cases, according to the MoFAGA.
This incident has been a perennial problem in almost every FY. In the FY 2024/25, 10 municipalities and 22 rural municipalities failed to bring their budgets throughout the year. Out of these 25 local bodies were from Madhesh Province.
An official of the MoFAGA said the budgets of local bodies have been delayed mainly due to political conflict. If the local bodies fail to receive approval for their budget on time, they can't collect revenue, pay salaries and execute their development plans and programs. In addition, they cannot get the grants from the federal government, while it may give rise to soaring arrears as the local bodies may not exhaust their financial resources fulfilling the due processes.
According to the Auditor General's Report for the fiscal year 2023/24, local bodies had arrears of 25.32 billion out of the total arrears of Rs 733.19 billion in the year. Of the 5,759 institutions concerned for the amount of arrears, 761 were related to local bodies.
Meanwhile, the government has formed three teams led by joint-secretaries of the MoFAGA to facilitate the concerned local bodies to endorse their annual financial plans. These taskforces are set to make onsite visits and to discuss with the local bodies to identify the problems behind the delay in budget announcement.