Ministry of Finance halts financial grants to local govts not presenting budget on time

Kathmandu / July 8: The Ministry of Finance (MoF) has directed the Financial Comptroller General Office not to release payments to those local governments that have failed to present their annual budgets so far.

An intergovernmental finance management law has set June 24/25 (Asadh 10) as the deadline to announce the budget at the local level. The local governments need to endorse their budgets by mid-July every year.

According to the MoF, a total of 285 local governments have not presented their financial plans for the next fiscal year. Of them, 71 local governments of Province 2, make up the largest number in breaching the law. Similarly, 48 local governments each in Province 1 and Bagmati Province, 40 in Karnali Province, 33 in Sudur Paschim Province, 28 in Lumbini Province and 18 local governments in Gandaki Province have failed to announce their budgets for the next fiscal year within the prescribed deadline this year.

The federal government provides four types of grants to the local governments — fiscal equalisation, conditional, complementary and special grants. With the instruction of the MoF, these local governments will not be able to get these financial grants provided they do not come up with their budgets for 2021/22.