Bagmati Province Government Directs Local Levels to Implement Projects Instead of Discretionary Spending

Hetauda. The Bagmati Province Government has provided more budget to local levels with the condition that they must implement specific projects such as health, agriculture, education, and infrastructure, rather than discretionary spending, with Dhading receiving the largest and Rasuwa the least grant.

Under intergovernmental fiscal transfer, the Province Government has focused investment on concrete programs rather than basket budgets. The government has invested in projects (concrete projects) rather than 'cash' basket budgets in fiscal transfer to local levels.

The Bagmati government has promoted a 'top-down' approach in the province's development in the fiscal transfer announced for the upcoming fiscal year 2083/84. The share of 'conditional and complementary grants', which require the fulfillment of conditions and projects specified by the province, is significantly higher compared to 'fiscal equalization grants' that local levels can spend at their own discretion.

The Province Government has moved forward with the goal of implementing projects based on the recommendations of local levels to eliminate irregularities in development projects. The Province Government has provided a larger share of conditional and complementary grants based on policy and priorities in the plans of local levels. Since local levels also have to share costs, the Bagmati government has invested in complementary grants to prove local resource ownership.

Out of a total fiscal transfer of 6 billion 91 crore 57 lakh rupees, the share of equalization grants, where local levels can independently plan projects, is only 1 billion 49 crore 55 lakh (21.6 percent). The remaining 78 percent of the budget has been sent as conditional, complementary, and special grants.

The Province Government has provided a total fiscal transfer of 6 billion 91 crore 57 lakh 38 thousand rupees to local levels, with the largest share being conditional grants (2 billion 24 crore 25 lakh 68 thousand rupees for current and capital expenditure) and complementary grants (2 billion 38 crore 18 lakh 70 thousand rupees).

According to the strategy, local levels must implement only the budget provided by the Province Government for programs recommended by them. The 2.38 billion rupees allocated for complementary grants requires local levels to add an equal or specified proportion of funds.

The Bagmati government appears to have placed more emphasis on 'basic services' rather than traditional road construction in fiscal transfers. In fiscal transfers, a large budget has been allocated for the construction of health post buildings, strengthening of hospitals, and purchase of ambulances in most rural and urban municipalities, while grants have been arranged for 'cold storage', milk collection centers, and agricultural pocket areas.

'Digital learning' and school building construction have been prioritized in the municipalities of Kathmandu and Lalitpur. The Province Government has allocated budget through grants, especially for waste management, drainage, and urbanization management in the metropolitan and municipalities of Kathmandu.

The Province Government has also focused the conditional grant projects on production sectors. The government aims to invigorate the rural economy through budget allocation for milk production incentives, establishment of cold storage, and agricultural mechanization.

Dhading Receives Most Budget, Rasuwa Least

According to the fiscal transfer to local levels for the fiscal year 2083/84 by the Ministry of Economic Affairs and Planning, Dhading has received the largest project-based budget geographically and strategically. Through 4 types of grants including fiscal equalization, conditional, special, and complementary, budgets have been allocated to local levels in all 13 districts of the province, with local levels in Dhading receiving projects worth a total of 73 crore 88 lakh rupees.

Among the 13 districts of the province, Rasuwa, a Himalayan district, has received the least budget in fiscal transfer. Rasuwa has received grants of 21 crore 44 lakh 34 thousand rupees under 4 types of grants. Sindhupalchok has received 68 crore 51 lakh 42 thousand rupees, Kathmandu 68 crore 10 lakh 5 thousand rupees, Kavre 68 crore 5 lakh 65 thousand rupees, Makwanpur 61 crore 86 lakh 37 thousand rupees, and Nuwakot 53 crore 21 lakh rupees from the grants distributed by the province.

Chitwan has received 49 crore 60 lakh 36 thousand rupees, Dolakha 49 crore 19 lakh 15 thousand rupees, Sindhuli 48 crore 44 lakh 27 thousand rupees, Lalitpur 43 crore 76 lakh 92 thousand rupees, Ramechhap 43 crore 48 lakh 46 thousand rupees, and Bhaktapur 28 crore 13 lakh 73 thousand rupees.