Federal Ministry Initiates Efforts to Resolve Budget Deadlock in Local Governments

The Ministry of Federal Affairs and General Administration has taken the initiative to resolve the ongoing budget impasse in several local governments that have failed to pass their annual financial plans for the current fiscal year.

In a move aimed at expediting budget approval and implementation, the ministry is deploying three facilitation teams to the field from August 6. The teams, led by a joint secretary and comprising division heads Kaliprasad Parajuli, Prakash Dahal, and Rudra Singh Tamang, will hold on-site discussions with local officials to identify and address bottlenecks.

The initiative comes under the direction of Minister Bhagawati Neupane and involves coordination with the National Association of Rural Municipalities in Nepal (NARMIN), the Municipal Association of Nepal (MuAN), and the respective District Coordination Committees.

According to a statement issued by the ministry, the teams aim to help local units pass their budgets and programs without further delay, ensuring effective governance and service delivery.

In Nepal’s federal system, fiscal autonomy and financial discipline are foundational to local governance. The Constitution guarantees local governments authority over economic matters under Article 59 and revenue sharing under Article 60. Article 230 further mandates that rural and municipal executives present estimated revenues and expenditures to their assemblies for approval each fiscal year.

The Intergovernmental Fiscal Arrangement Act, 2017, stipulates that local units may only spend from their consolidated funds after their budgets are approved. Likewise, the Local Government Operation Act, 2017, requires that local executives submit budgets to their assemblies by Asar 10 (last week of June) and ensure approval by the end of Asar (mid-July).

However, several sub-metropolitan cities, municipalities, and rural municipalities have yet to comply with these legal provisions for the current fiscal year.

As the coordinating body between federal, provincial, and local levels, the ministry has taken this issue seriously and is working to ensure that delayed local budgets are endorsed and brought into effect promptly. -- RSS