Demand to release 50% of the equalization funds

Municipality Association of Nepal (MuAN) and the National Association of Rural Municipalities in Nepal (NARMIN) submitted a memorandum to Finance Minister Dr Prakasharan Mahat in relation to the deduction of the equalization grants going to the local level government.

President of the MuAN Bhim Prasad Dhungana and President of the NARMIN Lakshmidevi Pandey have submitted the memorandum to Finance Minister Dr Mahat at the Singha Durbar on wednesday.

In the memo, they have demanded that 50 per cent of the last installment of the fiscal equalization grant to be sent to the provincial and local levels for the financial year 2079/80 should be released soon. The first 50 percent of the amount has already been disbursed.

The budget of the local governments will be seriously affected by the reduction in the equalization grant, which is having a serious impact on the local governments with minimal internal revenue. Furthermore, the decision to deduct the equalization grant in this way is against the spirit of fiscal federalism and the Constitution.

Since the deadline for spending is July 8, the funds should be released immediately, adds the memo.