KATHMANDU: As soon as the government starts preparing the budget for the coming fiscal year, the National Natural Resources and Fiscal Commission (NNRFC) has set the limit of fiscal equalization grant to the state and local level on the basis of various indicators.
The commission has fixed the limit of equalization grant on the basis of facts and sources. For the recommendation of the grant, five categories have been evaluated on the basis of human development index, socio-economic inequality, condition of infrastructure, condition of revenue and need for expenditure and ability to raise revenue.
Based on the assessment, the seven states will get a total of Rs. 43.77 billion and the local level will get Rs. 70.89 billion.
Accordingly, federal government will provide a budget of Rs. 113.86 billion towards equalization grant.
The commission has set a burden of 10 percent on human development index, 5 percent on socio-economic inequality and 10 percent on infrastructure development.
Infrastructure includes road density, electricity facilities, access to information technology, drinking water and sanitation.
In terms of revenue, the indicator is loaded at five percent and the need for expenditure and the ability to raise revenue is weighed at 70 percent.
According to the commission, while recommending fiscal equalization grant, equal weight has been given to the population and area in the case of the states.
In the case of local level, population is the main basis for recommendation. By recommending a minimum grant to each local level, the local level with a population of less than 10,000 will receive a grant of at least Rs. 27.5 million.
According to the commission, there are 47 local levels with a population of less than 10,000.
There are 190 local levels with a population of 10,000 to 20,000. These local levels receive a fiscal equalization grant of at least Rs. 30 million.
There are 206 local levels with a population of 20,000 to 30,000. These local levels receive a minimum fiscal equalization grant of Rs. 32.5 million.
According to the commission, there are 120 local levels with a population of 30,000 to 40,000. They also receive a minimum fiscal equalization grant of Rs. 35 million.
The commission has recommended the government to fix the minimum financial grant to be received by all 753 local levels. They will receive the budget on the same basis.
