Government Sets Fiscal Equalization and Grant Funds for Provinces and Local Levels in FY 2081/82
The Government has set limits for the transfer of funds to provinces and local levels as financial equalization, supplementary, and special grants for the upcoming fiscal year 2081/82. During the meeting of the Federalism Strengthening and National Resource Committee, Secretary Krishna Hari Pushkar briefed the committee on financial transfers, revenue sharing, utilization of natural resources, and the status of divisional responsibilities between the federal, provincial, and local levels.
According to him, the decision to allocate funds for financial equalization grants totals Rs. 1.48 Kharba. Of this, Rs. 60 Arba is earmarked for provinces and Rs. 88 Arba for local levels. Additionally, Rs. 12.9 Arba is allocated as special grants for provinces, and Rs. 13.2 Arba as supplementary grants, bringing the total to Rs. 26.1 Arba.
As per the Ministry of Finance, a total of Rs. 4.4 Arba has been earmarked for special grants, along with Rs. 6.20 Arba allocated for supplementary grants. Additionally, Rs. 8.5 Arba will be allocated for special subsidies, while Rs. 7 Arba is designated for supplementary subsidies at the local level.
Regarding the operation of programs under supplementary and special grants, Secretary Pushkar informed the committee that the selection process has been initiated based on recommendations received from the National Natural Resources and Fiscal Commission (NNRFC). Although the amount has been decided through decisions taken by the Radio Frequency, any disbursement is contingent upon approval from the Financial Commission.
Secretary Pushkar emphasized, "Policies have been formulated to gradually increase financial equalization grants and decrease conditional grants, except under special circumstances, based on the experience of financial federalism over the past five years, and amendments to the Intergovernmental Fiscal Arrangement Act, 2074, aimed at establishing transparency in public financial management across the three tiers of government."
