Kathmandu: Following the recommendations of the National Natural Resources and Fiscal Commission, the government has announced a substantial fiscal transfer to sub-national levels for the upcoming fiscal year.
Finance Minister Dr Swarnim Wagle, while addressing a joint session of the Federal Parliament, stated that Rs 61.50 billion has been earmarked for provinces and Rs 90.20 billion for local levels as financial equalization grants.
To support infrastructure development across the country, the government has allocated complementary grants amounting to Rs 4 billion for provincial governments and Rs 8.93 billion for local bodies. In addition to infrastructure support, special grants have been designated to address specific regional needs, with Rs 3.82 billion set aside for provinces and Rs 9.40 billion for local levels.
A significant portion of the budget has also been dedicated to the implementation of federal projects at the local level through conditional grants. The Finance Minister announced that Rs 39.72 billion will be funnelled to the provinces, while a substantial Rs 206.08 billion is designated for local governments to ensure the effective execution of these projects.
Beyond direct grants, the government anticipates a robust transfer of funds through the national revenue-sharing mechanism. It is estimated that approximately Rs 175 billion will be distributed among the provincial and local governments from the federal revenue pool. Altogether, through a combination of various grants and revenue sharing, the Finance Minister expects more than Rs 600 billion to be mobilized and utilized at the provincial and local levels in the next fiscal year, marking a significant step toward strengthening fiscal federalism.
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