The federal government is set to get tough on the local governments that have failed to present and endorse their annual budgets on time.

As per the Intergovernmental Fiscal Arrangement Act-2017, local governments were required to present their fiscal budgets for the fiscal year 2021-22 by Asar 10 (June 24) at their village or municipal assemblies.

But, over 100 local governments, majority of them from Province 2, have yet to present their budgets for the current fiscal year, according to the Ministry of Federal Affairs and General Administration.

“We have prepared a proposal asking the Finance Ministry to stop any spending by such local governments until they present their new budgets,” said Dilaram Panthi, undersecretary at the ministry.

“After our efforts last year to include timely presentation and approval of budget as part of scores for allocating budget for the next fiscal year failed to encourage the local governments to present budgets on time, we are preparing to get tougher on them.”

The National Natural Resources and Fiscal Commission has incorporated the provision of scores as an indicator to evaluate the performance of the local governments. On a 100 point scale, timely budget presentation and approval alone will ensure a local government 10 points. The budget should be passed by Asar 30.

Based on the score received by a local government, the commission recommends the amount of fiscal transfer to be made to the local government by the federal government.

According to Panthi, the Finance Ministry can stop local governments that have defaulted on budget presentation and passage deadlines from accessing federal funds. But some local governments have still been defaulting on the budget presentation deadlines.

This year, Naraha Rural Municipality, Siraha is one of the local governments which failed to present its budget on time for the second year in a row.

It had presented the budget for the last fiscal year 2020-21 only in January.

Ram Sharan Yadav, chairperson of the rural municipality, told the Post that this year’s budget was delayed because they had yet to settle last year’s accounts. “We could not make payments for completed works due to the delay in cheque issuance by the District Treasury Office, hence the delay,” he said.

Yadav said that he was planning to summon the Village Assembly soon for presenting the budget for the new fiscal year. “We have only presented policies and programs for this fiscal year,” said Yadav.

According to the Ministry of Federal Affairs and General Administration, which is the line ministry for the local governments, over 100 local governments have yet to present their budgets for the current fiscal year. There are a total of 753 local governments.

Some local governments including Tirahut Rural Municipality and Dakneshwari Municipality of Saptari district have, however, presented their budgets after the deadline set by the law lapsed. “We presented the budget for the current fiscal year on July 13,” said Hemanta Kumar Bahatkher, chairperson of Tirahut Rural Municipality, Saptari.

It is learnt that disputes among political parties among other things have caused such delays.

“Recent political developments in the country (split in the Nepal Communist Party (NCP) and political realignment at the center and provinces have a direct bearing on the local-level politics too,” said Panthi, who is also the chief of the local level coordination section at the Federal Affairs Ministry.