Madhesh Province forgoes fiscal equalisation and special grants

• NPC receives over 3,600 proposals, none from Madhesh

KATHMANDU: National Planning Commission (NPC) has received over 3,600 proposals for fiscal equalisation and special grants for the forthcoming fiscal year from all over the country, with the exception of Madhesh Province. 

According to sources within the NPC, Madhesh Province has not submitted any proposals seeking fiscal equalisation and special grants.

Given that Madhesh Province has not requested a budget, projects that were initiated earlier but remain incomplete will not receive a budget under equalisation and special grants for the next fiscal year. This past November, the NPC issued a circular to all provinces and local levels, requesting them to recommend equalisation and special grants projects by mid-January 2024. They were asked to propose projects and programmes via the online system to receive grants from the federal government.

According to Shiva Ranjan Poudyal, Programme Director of the NPC, "There were ongoing projects in Madhesh Province as well. However, they did not log into the system. There were no proposals seeking a budget for both new and ongoing projects. The NPC was asking the provincial authorities to submit proposals through the system until the deadline. However, Madhesh Province did not send any proposal."

The related working procedure has stipulated that proposals must also be sought for ongoing projects. The total cost, contract points, progress report, and other details should be presented in the proposals. Provisions have been made regarding federal equalisation grants and federal special grants in the Fiscal Equalisation Grant (Third Amendment) Working Procedure, 2077 and the Special Grant (Third Amendment) Procedure, 2077 BS.

The federal government allocates a budget to the province and local levels every year under the headings of equalisation and special grants. As per the provisions of the working procedure, the office of the Chief Minister and Council of Ministers, in the case of the province and the local level, has to submit proposals to the NPC with a demand for grants for the projects recommended by the executive meeting.

Nathu Prasad Chaudhary, Vice-Chair of the Province Policy and Planning Commission of the Madhesh Province government, said that although the list of projects has been prioritised for receiving federal equalisation and special grants, the Office of the Chief Minister and Council of Ministers has not advanced the process. "The Province Planning Commission had already sent the priority of the projects and programmes. It is the responsibility of the Office of the Chief Minister and Council of Ministers to approve these programmes and projects and send proposals with demands for grants," he said.