Kathmandu, May 21: Prime Minister Pushpa Kamal Dahal ‘Prachanda’ has said that the equalization grant to the province and local governments would not be reduced.
He said this at a joint meeting with the representatives of the Municipality Association of Nepal (MUAN) and National Association of Rural Municipalities of Nepal (NARMIN) at the Office of the Prime Minister and Council of Ministers today.
On the occasion, PM Dahal clarified that the federal government has not had any plans to cut off equalization grant as it is the constitutional right. “The equalization grant is the constitutional right of the province and local governments. Pressure on the economy has not been completely removed. But, the equalization grant would not be deducted despite any sort of pressure. The federal government is clear on this issue”, the Prime Minister shared.
During the discussion, Finance Minister Barshaman Pun urged the local people’s representatives not to get confused on the issue as there is no thought to decrease the grant. “The federal government is under economic pressure. The reserve fund has gone negative. Whatever circumstances arise we would not cut the equalization grant”, the Finance Minister pledged. He however asked the province and local governments to spend trillions of rupees deposited in their accounts and increase their capital spending.
On the occasion, the representatives of both the federations drew attention towards not reducing the equalization grant.
