Kathmandu: The budget brought recently by the federal government for the fiscal year 2082/83 has been commented as an insubstantial document in terms of enforcing fiscal federalism. The speakers and experts at a programme on ‘Budget from federal lens’ organized by the Federalism and Localization Centre in the federal capital on Monday argued the budget was still slow off the mark to allocate power and resources to the sub-national governments.
According to National News Agency Nepal, Upendra Yadav, Chairman of Janata Samajbadi Party, argued that the budget reflected a unitary system, thereby denting fiscal federalism. He complained that the provincial and local governments were deprived of resources, and that access and influence to power were determining factors behind the allocation of budget. Former Finance Minister Barshaman Pun added that if the concept of a project bank was not enforced effectively, it would adversely impact the entire project plan and management process. While the projects could be selected based on government strategies and perspective plans, he warned that leaders’ and ministers’ priorities could derail them.
Chairman of the Finance Committee of the House of Representatives, Santosh Chalise, noted that the Committee repeatedly discussed the points for the budget, which were later incorporated. However, he observed that most provinces and local levels are dependent on the central government for funds, a situation he deemed unsustainable in the long run. National Assembly lawmaker Kamala Pant remarked that, although the budget was positive on average, it is challenging to secure resources for impactful enforcement. She argued that the budget failed to reflect financial discipline irrespective of suggestions from the auditing agency, making it almost impossible to achieve sustainable development goals in four years.
Former lawmaker Dil Kumari Thapa Rawal criticized the budget for failing to address pressing concerns like the implementation of the constitution and federalism. She stressed the need for robust fiscal federalism in addition to political federalism. Dr. Khim Lal Devkota, former member of the National Assembly and Chairman of the Federalism and Localization Centre, asserted that the budget was away from the spirit of the constitution and federal structure. Despite local and provincial governments having exclusive rights, implementation is weak, and fiscal devolution is much awaited.
Dr. Devkota, an expert on fiscal federalism, further claimed that the revenue system is still guided by a centralized system. He pointed out random cuts on equalization grants and excessive conditional loans, which hinder the autonomy of provincial and local governments to make their own decisions. HoR member and CPN UML leader Yogesh Bhattarai admitted that most political parties are still sticking to a centralized perspective despite the presence of federalism. Former Secretary Bidyadhar Mallik observed that the government ignored the poor class and citizens in the budget, emphasizing the need to reduce conditions on conditional grants. Deputy General Secretary of the Municipality Association of Nepal, Sunita Dangol, commented on the vertical imbalance in fiscal federalism in Nepal.