Central budget-preparation process replicated at the local level

KATHMANDU, June 13: The Ministry of Federal Affairs and Local Development (MoFALD) has clearly started that local units will have to follow the budget-making process adopted by the central government.

Each local unit will have to get their annual income and expenditure plan endorsed by the respective municipal or rural municipal council by July 15 - or the last day of the fiscal year.

According to a 7-step budget preparation guideline prepared by the MoFALD, the new leadership of the local unit will have to table income and expenditure plan in their respective council meeting on July 9 like the finance minister does in the parliament.
This is the first time that the government has implemented fiscal transfer to local units by holding election after a hiatus of two decades.

“Before tabling the budget in the council meeting, executive office of metropolis, sub-metropolis, municipalities and rural municipalities must endorse the budget,” Mahesh Bhattarai, an undersecretary of MoFALD, told Republica. 

The budget tabled by the then finance minister Krishna Bahadur Mahara in the parliament on May 29 has allocated Rs 225 billion for all local units for Fiscal Year 2017/18.
As per the guideline, local units should start budget preparation on June 15 based on resources allocated by the federal and province governments as well as local resources. Similarly, central government has to send budget preparation guidelines to local units immediately after tabling the budget in the parliament.

By June 19, the local units can set the budget ceiling based on the grants received from the central government and estimated local resources and other resources in their reserve. A resource committee to be headed by the chief of the unit will have to assess the estimated resources and set the budget ceiling for the next fiscal year. 

Each settlement will have to select project by June 24. They will have to finalized the plans and recommend them to the local unit by June 29. A committee that devises plans and programs will integrate all the plans and programs of each ward and make recommendation to the executive council of each local unit by July 4.

As part of financial equalization, each rural municipality has got a minimum of Rs 100 million and a maximum of Rs 390 million. Similarly, municipalities and sub-metropolitan cities have received between Rs 150 million to Rs 460 million and Rs 400 million to Rs 630 million, respectively. 

The local units have also received separate budget allocations as conditional grants, totaling Rs 76 billion. 

 
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• july