KATHMANDU, Nov 1: A total of 43 local governments have failed to endorse their financial plans even after the first quarter-end of the current fiscal year (FY).
The state’s law has mandated the local governments to announce their budget by June 24 (Asar 10 of Nepali month) every year. But around 5.7 percent of the total local bodies are found breaching the state rule on various pretexts, mainly due to lacking political consensus.
69 local govts fail to unveil budget within June 24 deadline
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. As of now, only 710 local bodies have submitted their financial plans to the Line Ministry Budget Information System of the federal government, according to the Ministry of Federal Affairs and General Administration (MoFAGA).
A notable number of the local bodies breaching the government rule are from Madhesh Province. Out of 136 local bodies in Madhes Province, 34 have failed to announce their budget. Koshi Province has two, Lumbini has 5, Bagmati Province and Karnali Province each has one such case. All the local bodies of Gandaki and Sudurpashchim provinces have abided by the law.
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.
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. The delay in budget announcement may also give rise to soaring arrears as the local bodies may not exhaust their financial resources fulfilling the due processes.
