Equitable distribution of resources for local units unlikely

Published On: May 18, 2017 01:20 AM NPT By: Rudra Pangeni  | @rudrapang

Ministries lack data of local units
KATHMANDU, May 18: Different ministries are preparing budget for all 744 local units for the coming fiscal year. 

But resources distribution from the center to the local units will more or less be in the same ratio as the districts in the past, government officials say.

As per the new constitution, different factors like local revenue, human development index, poverty status, literacy rate, employment situation and price index, among others, have to be considered for equitable distribution of resources. But the ministries have data of population and geography only. Though Human Development Index (HDI) data is available, it is of the districts not the local units.“

"Population, geographical area and district-level HDI are the factors that we have considered for distribution of resources to the local unit," Mahesh Bhattarai, an undersecretary of the Ministry of Federal Affairs and Local Development (MoFALD), told Republica.

The government agencies do not have any data of local revenue sources, literacy rate, child and maternal mortality rate, nutrition, and length of roads, among others, of all 744 units, Bhattarai added.

MoFALD is distributing Rs 100 billion to the local units in the coming fiscal year which is double of what it has allocated for local bodies in the current fiscal year.

An official at MoFALD said that budget distribution on the basis of population and geography will work only on social security allowance and scholarship for school children. It will be of no use for infrastructure building, job creation and income generation, among others, the official added.

The Ministry of Agricultural Development (MoAD) is also computing data in all 744 units.  Though the local units will get separate budget from each line ministries from the center, they can put the entire budget in a single basket and prepare budget programs on their own within two months, according to a law being drafted by the government that governs spending by the local units.“

"We are computing the budget amount for each local unit calculating the allocations made to undergoing projects and programs of that area in the current fiscal year," Yogendra Karki, the spokesperson for MoAD, said. "This is also a big change as local units can decide on the projects and programs on the basis of local needs," added Karki. 

MoAD is preparing to send 40 percent of its total budget of Rs 29 billion to local units. It is setting aside 30 percent of the budget for provincial governments and remaining 30 percent for central government and agencies.

Central Bureau of Statistics (CBS) recently prepared statistics of each unit based on census of 2011 and submitted it to National Planning Commission (NPC) for review. But it has not been finalized yet.

"We have provided some data to NPC. But we are yet to collect essential data of each local unit," said Suman Aryal, the director general of CBS.

Officials at the Ministry of Physical Infrastructure and Transport (MoPIT) say that they do not have any idea of about 5,000 undergoing small road project. "We need to allocate funds to these projects, but don't know in which local unit they belong," a MoPIT official added.

MoPIT's budget ceiling for the next fiscal year is Rs 95 billion.

Balananda Paudel, the chairperson of Local Bodies Restructuring Commission, said allocation of budget allocation under federal setup without considering essential data would be meaningless. 

The commission had submitted a report on restructuring local units to the government earlier this year. The government created 744 local units on the recommendation of the commission.

Paudel suggested to the government to mobilize newly elected representatives in local units to collect essential data like literacy rate, population composition and infrastructure, among others, for making the next budget distribution meaningful. 

Delay in formation of National Natural Resources and Fiscal Commission as provisioned by the constitution is affecting the resources distribution process.

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