Local and Provincial Governments Demand Greater Fiscal Autonomy from Federal Center

Kathmandu. The federal government is facing mounting pressure on Finance Minister Swarnim Wagle to refrain from intervening in projects valued under 50 million rupees and to grant local and provincial governments greater authority over budget allocation and implementation.

Most representatives from local and provincial governments voiced this strong demand during the Inter-Governmental Finance Council and thematic committee meeting held at Singha Durbar on Thursday.

Sudurpashchim Province State Minister Prakash Bam emphasized during the meeting that the budget allocated to local and provincial levels must strictly follow the established ceilings. He also highlighted the need for the federal government to prioritize conditional grants.

Addressing the Finance Minister directly, Bam asked, 'Will the federal government declare that it will not implement projects with a budget of less than 50 million rupees?' His remarks reflect growing grievances that the federal government is overstepping its bounds by unnecessarily intervening in small-scale projects within the jurisdiction of local authorities.

Furthermore, Bam drew attention to the damage caused by vandalism and arson to physical infrastructure under local and provincial government control during the Gen-Z movement.

He argued that local and provincial governments lack the capacity to absorb such losses or fund reconstruction, demanding that the federal government introduce a special relief plan. This highlights the urgent need for federal support in managing damages caused by natural disasters or civil unrest.

The meeting underscored the necessity for greater clarity and the decentralization of authority in budget allocation and implementation, in line with the spirit of federalism.