Out of 753 local governments, 33, comprising 11 municipalities and 22 rural municipalities, have failed to submit their budget for the fiscal year 2023/24 on time, as mandated by the Local Government Operation Act, 2017. On a positive note, Sudurpaschim province achieved a 100 percent record this year, with all 88 local units passing their budgets on time. However, Madhes province continues to struggle, with 24 out of 136 governments failing to meet the deadline.

The primary reason for the budget delays is disagreement between municipal heads and their deputies. This has been a recurring issue, with mayors and chairpersons blaming their deputies and vice-versa. Additionally, political pressure and lack of a majority in some executive committees and councils also contributed to the delays.

To address this problem, experts and officials suggest penalties such as redirecting reduced subsidies to neighboring municipalities or introducing alternative forms of punishment. However, some economists oppose this approach, arguing that the public should not suffer the consequences of corrupt actions by representatives.

Currently, the only repercussion for delayed budget submissions is receiving reduced subsidies from the National Natural Resources and Fiscal Commission. The allocation of subsidies is based on performance, with timely budget presentation and approval carrying significant weightage.

It is crucial to find effective solutions to this issue, as untimely budget allocation negatively impacts local employment, income, and overall economic growth of the country. Efforts are underway to guide and train local representatives in adhering to a fixed set of protocols, with a ‘learning by doing’ approach showing some improvement in timely budget submissions over the years.

Full story here.