Local units, provinces may miss matching and special grants again

Published On: April 10, 2018 07:52 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 10: Local units and provinces may not get the matching and special grants from the federal government for the next fiscal year, too, government officials say. The provinces and local units are required to table a detailed study of any project they want to implement, justifying that they have no resources to implement the project alone. Only then can they seek matching grants from the federal government. 

The provinces and local units also have to submit a feasibility study report explaining the project’s importance and rationale and a project implementation plan to receive such grants. “There is very limited time for the local units and provinces to prepare to become eligible for the matching grants before the national budget is tabled,” said a senior official at the Ministry of Finance who is not allowed to talk to the media. 

The local and provincial governments also have to make investment commitment for project implementation. In order to mange grants, the Ministry of Finance has just started making a guideline defining eligible projects for the grants, setting minimum criteria including investment amount, a threshold for investment amounts for such projects and also ratio of investment by federal and provinces or local levels to qualify for the matching grants. 

The government fixed a ceiling on equalization grants to be provided to the local units and provinces on Sunday. 

Sources said the federal government which has seen an empty treasury may not be in a position to allocate budget for the special grants though it may include programs like the Prime Minister Agriculture Program ‘for boosting agricultural output’ in the budget. And again, the implementing agencies of such programs will be the local units and provinces. 

Finance Minister Yuba Raj Khatiwada has already revealed that the government vault is empty. Earlier,  in a half-yearly review of the budget, Khatiwada indicated that they will be allocating budget for the provinces and local units only based on the spending progress in the new fiscal year. 

Spokesperson for the National Natural Resources and Fiscal Commission, Ram Prasad Ghimire said, “We independently can say that the government has seen a resource crunch to plan special programs in the upcoming budget.” The commission is a constitutional body which advises the government to allocate resources and grants for the local units and provinces based on formulas of different seven development indicators. Last year, as the first step of the implementation of federalism, the government had allocated a total of Rs 225 billion for the local units and Rs 7 billion for the seven provinces under two categories of grants - matching and conditional. But last year, both these grants were left unused.  

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