Five local governments have failed to unveil their annual budget even in five months after the start of the current fiscal year.
According to the Ministry of Federal Affairs and General Administration, four local governments of Madhesh Province, including three municipalities, have not announced their budget so far. Nagaraine Municipality and Kamala Municipality of Dhanusha district and Baudhimai Municipality of Rautahat district have not unveiled their financial plans for fiscal year 2022/23.
Bishnu Rural Municipality of Sarlahi district from Madhesh Province is also in the list for breaching the state law. Similarly, Duduwa Rural Municipality of Bake district is yet to unveil its annual budget.
The delay in budget announcement has been a perennial problem ever since Nepal adopted the federal system. Last year, 71 out of 753 local governments could not present their annual budgets within the prescribed time. The delay in budget announcement at the local levels has mainly been attributed to the political differences among the local leaders.
According to the Intergovernmental Fiscal Management Act 2017, the sub-national governments are required to introduce their annual budgets by June 24 (Asadh 10) every year. These local governments will not be getting the grants from the federal government until they announce the budget for this fiscal year.
As per the federal constitution, provincial and local governments receive four types of federal transfers or grants — federal equalization grants, conditional grants, complementary (matching) grants and special grants after the sub-national governments present their annual budget. With the failure of the local governments to unveil their annual budget, the development works in areas under the jurisdiction of these sub-national governments have come to a halt, while the funds allocated for them are accumulated at the Ministry of Finance.
