Kathmandu, May 9, 2018: The National Planning Committee (NPC) has estimated that the provincial governments are expected to get a grant of Rs.19 billion on average in the new fiscal year. This estimation comes as the provincial governments have been demanding higher share of the national treasury to support their development activities.
The total budget of Rs.135 billion will be received by the provinces under four types of grants including fiscal equalization, conditional, matching and special types, says the commission.
However, the finance ministers from the provincial governments have shown concern about the budget being low in comparison to the gravity of the activities they are going to have to shoulder. They expressed their concern at a meeting of the inter-governmental fiscal commission on Monday.
Hari Basyal, joint-secretary at the Finance ministry says, “We had given the ceiling of Rs13-15 billion for each province under two headings-fiscal equalization and revenue sharing. The provincial finance ministers complained that the bar was low for them.”
The provincial officials said it would limit their capacity to generate their own resources for development projects on their own as most of the taxes under the provincial jurisdiction will be shared among federal, provincial and the local levels.
The NPC states that 15 percent of the federal budget is expected to go to the local level as conditional grant on top of special grants and contemporary budget. An estimated 18 percent of national revenue will be transferred to the local units and 11 percent would reach the provincial and the local units in the form of fiscal grant, according to the NPC.