Govt initiates preparations for FY 2024/25 budget, seeks proposals from provincial and local govts

Published On: December 25, 2023 08:22 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 25: The government has started preparations for the annual budget of the fiscal year (FY) 2024/25. The National Planning Commission (NPC) issued a circular to the provincial and local governments and requested proposals for projects and programs to be conducted under federal supplementary and special grants for the coming year.

Provinces and local governments have been asked to submit proposals for plans and programs to be implemented under this grant heading by mid-February.

According to the assistant spokesperson for the NPC, Dibakar Luitel, the federal government provides supplementary and special grants as a tool for financial transfer based on the demands of the provincial and local governments. He said that only the plans and programs that have fulfilled the necessary procedures and criteria will be eligible to get such grants.

"Supplementary and special are grants given based on demand. After the local level and the province submit proposals within the specified criteria and time limit, they go into the process of selecting the plans and programs that have been requested", said Luitel. According to the NPC, proposals for supplementary and special grants can only be submitted online. The selection committee chaired by the members of the NPC will analyze the proposals received online and recommend the budget for suitable plans and programs.

According to the provisions of the Intergovernmental Fiscal Arrangement Act, 2074 BS, the Central Government can give supplementary grants to the provinces and local levels to implement plans related to infrastructure development. Similarly, special subsidies are provided in the areas of basic services such as education, health, and drinking water. These kinds of grants are also provided to achieve balanced development between the inter-province or inter-local levels, targeting economically socially backward class communities. Thus, for supplementary grants, grants can be requested for projects related to infrastructure construction and special grants for projects related to areas such as education, health, drinking water, inclusion and mainstreaming, level balance, food security and nutrition, and waste management.

Provinces and local levels must fulfill certain criteria and procedures to receive supplementary and special grants from the federal government. The NPC said that the need and justification should be confirmed when recommending projects and programs to get such grants. According to the NPC, projects and programs will be selected to increase production and productivity, projects aimed at job creation and addressing the damage caused by natural disasters such as earthquakes.

Criteria for getting supplementary and special grants have been set through the Act and procedures. In the case of the province, the office of the Chief Minister and Council of Ministers, and in the case of the local level, the executive meeting will have to decide and propose the project/program. There is a criteria to submit only projects/programs that have completed preliminaries. Similarly, special priority should be given to projects that have received federal supplementary and special grants and have been implemented but are yet to be completed.

To get such a grant, the detailed study report (DPR), Environmental Impact Assessment (EIA), and financial cost estimation of the proposed project should be completed. For supplementary grants, the total cost estimate of projects to be implemented by rural municipalities and municipalities has been set at Rs 10 million to Rs 100 million.

Similarly, there is a provision in the procedure that the sub-metropolitan city and the metropolitan city can propose projects ranging from Rs 50 million to Rs 250 million. Proposals for projects costing between Rs 200 million to Rs 1 billion can be submitted for the projects under the supplementary subsidy to be implemented by the provincial government.

For special grants, there is a provision that the local level can propose projects costing at least Rs 5 million to Rs 100 million. Provinces can request special grants for projects and programs costing at least Rs 100 million.

There is a provision that 50 percent of the financial burden of the projects and programs implemented under the supplementary grant should be borne by the respective municipalities or provinces. There is a provision in the procedure that at least 50 percent of the annual estimated expenses of the plans and programs to be implemented under this grant title should be allocated by the respective local level or provincial government as a grant. Similarly, there is a provision that the projects under the supplementary grant should be completed within three years.

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