Province 2 will not see much development activities in the next few months as it will not be able to utilise a big chunk of the budget provided by the central government due to postponement of local level elections and upcoming festive season.

The Financial Comptroller General Office has already instructed district treasury offices throughout the country to deposit funds extended by the central government in bank accounts of respective local bodies.

The central government is transferring Rs225 billion, or 17.6 percent of the total annual budget, to local bodies in the current fiscal year. The funds allocated for local bodies will be deposited in their bank accounts every four months in mid-July, mid-November and mid-March.

As per this plan, local bodies in Province 2 have also received their share of budget for the first four months. But like local bodies located in other provinces, those in Province 2 will not be able to use a big chunk of this fund, as budget extended to local bodies can be used only after getting approval from village or municipal councils, which must comprise elected local representatives.

For instance, district treasury office in Sarlahi has already released Rs1.8 billion for 17 local bodies, including 10 municipalities and seven village councils, in the district. The fund has been deposited in consolidated funds of respective local bodies, according to Hira Neupane, an official of Sarlahi district treasury office.

But these local bodies can tap the budget extended to them just to cover administrative expenses and not execute development works because local level elections have not been held in Province 2.

Local level elections were held in provinces 1, 3, 4, 5, 6 and 7 on May 14 and June 28. Local elections in Province 2 are scheduled for September 18.

The Guideline on Local Level Planning and Budget Formulation, issued by the Ministry of Federal Affairs and Local Development, says local units where elections have not taken place can only spend available budget to cover salary and office expenses, and implement multi-year projects inherited from the central government. Overhead expenses make up a small portion of the budget provided by the central government, as big chunk of the funds should be used for development activities.

The inability to spend a big portion of available budget is likely to hinder development in the province where the human development index is below national average. According to the Nepal Human Development Report 2014, indicators in the eight districts of Province 2—Saptari, Siraha, Dhanusha, Mahottari, Sarlahi, Rautahat, Bara and Parsa—are below the average national score of 0.490.

But even if elections are held on the proposed date of September 18, development works in Province 2 will not gather pace immediately because Dashain and Tihar, two biggest festivals of Hindus, are scheduled to begin in the fourth week of September. After these festivals are over, Chath, the biggest festival of Tarai residents, will begin. By the time these events are over, first four months of the current fiscal year would have elapsed.

“This delay of four months will have domino effect and slow down other works such as those related to procurement,” said Tikaram Dhakal, chief executive of Hariban Municipality, adding, “Yet we cannot do anything about it, as allocated budget cannot be utilised for development works unless elections are held. So, we must hope for elections to be held on time.”