Bipana Thapa, My Republica, June 16, 2019
KATHMANDU: All seven provincial governments are unveiling their budgets for the upcoming fiscal year on Sunday. Although the federal government has reduced its grants for the provinces, the total budget amount of the seven provinces is expected to be around Rs 250 billion, or about 15 percent of the national budget for Fiscal Year 2019/20.
Of the seven provinces, Province 1 and Gandaki Province plan to allocate Rs 2 billion for the constituency development program. The money is to be spent under the supervision and decision of the provincial assembly members. Province 2 also plans a budget under this head but the amount could be less, said sources.
All the provinces are set to present their budgets on Sunday because of a mandatory provision of unveiling the budget at least one month prior to the next fiscal year.
Revenue collection, grants from the federal government, internal sources including royalties, and unspent budget funds from the current fiscal year are the major sources of the budgets for the provinces.
Province 1 plans a budget of Rs 40 billion for next fiscal year, said sources. Provincial Financial Affairs and Planning Minister Indra Bahadur Angbo said the budget for the upcoming fiscal year will be 15 to 20 percent higher than in the current fiscal year. The province unveiled a Rs 35 billion budget last year.
The Province 2 budget for next fiscal year is expected to be about Rs 35 billion, according to sources at the Financial Affairs and Planning Ministry. The province unveiled a Rs 29 billion budget for the current fiscal year. Financial Affairs and Planning Minister Bijay Yadav informed that he is focusing the budget on the development of agriculture and giving continuity to girls' education.
Province 3 is planning a new budget or around Rs 50 billion , about 15 billion more than the current budget. According to Financial Affairs and Planning Minister Kailash Dhungel, a major portion of the budget will be spent on infrastructure including roads and tunnels and on modernizing agriculture. The province plans to continue with the Bhimphedi-Kulekhani tunnel and a ring road in Kathmandu Valley.
Gandaki Province is planning a budget of Rs 30 to 32 billion. It has a budget of Rs 24 billion for the current fiscal year. Sources said the size of the budget will depend on whether or not internal loans are to be sought.
The Province 5 budget is expected to be Rs 35 billion, which is seven billion more than the current fiscal year budget. Spokesperson at the provincial government Baijanath Chaudhary said that projects for long term development will be the budgetary focus rather than small projects.
Karnali Province could be budgeting around Rs 33 billion for the new fiscal year, according to Financial Affairs and Planning Minister Prakash Jwala. The province has a Rs 28 billion budget for the current fiscal year. Jawala said that the new budget will prioritize mega projects and provincial pride projects .
Sudur Paschim Province plans a Rs 29 billion budget for next fiscal year, said Financial Affairs and Planning Minister of the province Jhapat Bohara. The province unveiled a Rs 25 billion budget last year . Bohara informed that agriculture, infrastructure development, industry, education, tourism, health and drinking water have been prioritized in new the budget.
For the first time the provincial assemblies are set to include revenue collection from natural resources in their budgets. The National Natural Resources and Fiscal Commission has devised a formula for revenue sharing between the federal, provincial and local governments.
“The commission has paved the way for the distribution of natural resources revenue between the three tiers of governments based on the Inter Governmental Fiscal Management Act,” said Balananda Paudel, chairperson of the NNRFC.
According to this law, the provincial and local governments will get 25 percent each of the royalties from natural resources. The remaining 50 percent goes to the federal government. Mountaineering, hydropower , forest products, and mines and minerals are major revenue sources .
The provincial governments have left unspent huge amounts of grants from the federal government provided for the current fiscal year. Such grants do not lapse and can be rolled over into the budget of the next fiscal year.
These will be the second provincial budgets since the formation of provincial governments in 2018 .