Karnali Province Government Increases Local Level Grants by 20%

Surkhet. The Karnali provincial government has significantly increased the grants provided to local levels within the province. The provincial government has increased the grant by 20 percent for the upcoming fiscal year (2083/084) compared to the current fiscal year.

The province's Minister for Economic Affairs and Planning, Rajeev Bikram Shah, stated that 5 billion 547.2 million rupees have been allocated for financial transfer to the 79 local levels of the province for the upcoming year, which is 957.2 million rupees more than the current fiscal year's 4 billion 590 million rupees transferred to local levels. This represents a 20.85 percent increase.

'The objective of this is also to develop the practice and culture of coordination and cooperation between the province and local levels,' said Finance Minister Shah, 'and to embrace the spirit of federalism.'

The provincial government has always complained about financial transfers from the federal government. Most leaders complain that the center does not provide the budget that should be given to Karnali considering its geography and situation.

The grant from the federal government to the province has increased for the upcoming fiscal year. The provincial government has also increased financial transfers to local governments accordingly.

Complementary grants have been increased by 420.4 million rupees. Finance Minister Shah stated that 1 billion 185 million rupees will be provided next year, compared to 764.6 million rupees given in the current fiscal year.

Like the federal government, the province also provides grants to local governments through four categories of grants and the Chief Minister Employment Program.

This year, financial equalization grants have been increased by 50 million rupees, said Finance Minister Shah. This grant, which was 950 million rupees in the current fiscal year, has now been increased to 1 billion rupees. This grant has been provided at a rate of 800 million rupees from the establishment of the provincial government until last year. The equalization grant started increasing from the current fiscal year.

Complementary grants have been increased by 420.4 million rupees. Finance Minister Shah stated that 1 billion 185 million rupees will be provided next year, compared to 764.6 million rupees given in the current fiscal year.

This is specifically for projects to be implemented with cost-sharing between the province and local levels. 'The grant amount has been increased to balance the social, economic, and infrastructure development among local levels by effectively implementing projects and programs between the two levels,' said Minister Shah, 'This is to make local levels feel that the provincial government is with them.'

He said that this amount has been increased to cover as many local levels as possible.

The provincial government has increased the special grant amount by 107 million rupees. Currently, there is a back-and-forth between the province and local levels, with local levels not recognizing the province and the province neglecting local levels. Ministry officials say that to address this, grants have been increased and coordination and cooperation have been promoted.

Finance Minister Shah said that the Chief Minister Karnali Employment Program, implemented through local levels, has also had its budget increased by half a crore rupees this time.

Special grants and inclusive and balanced programs are provided to reduce inequality among local levels, and to uplift and develop disadvantaged classes and communities in the province.

Minister Shah said that to systematize the special grant, the amount under this category has been increased from 360 million rupees to 475 million rupees based on the demand of local levels.

The provincial government has heavily cut down the grants provided with conditions to local levels this time. The conditional grants, which were 2.51 billion rupees in the current year, have been reduced to 1.7361 billion rupees for the upcoming year.

The government stated that the reduction in conditional grants and the increase in financial equalization grants encourage local levels to have financial autonomy to select and spend projects according to their needs.

Finance Minister Shah said that the Chief Minister Karnali Employment Program, implemented through local levels, has also had its budget increased by half a crore rupees this time. Initially, this program was introduced as the 'Chief Minister Employment' program. After Yamlal Kandel became Chief Minister, it was renamed the 'Chief Minister Karnali Employment' program.

The objective of this program is to create employment opportunities at the local level by conducting income-generating activities. Finance Minister Shah said that arrangements have been made to transfer 1.154 billion rupees to local levels with the objective of contributing to poverty alleviation through this program.

• Intergovernmental Fiscal Transfer Comparison: