Rs 60 billion equalization grant recommended for provinces, Rs 88 billion for local units

KATHMANDU: The National Natural Resources and Fiscal Commission has recommended to the government the disbursement of Rs 60 billion to provinces and Rs 88 billion as an equalization grant for the fiscal year 2024/25.

According to constitutional provisions, the government needs to distribute fiscal equalization grants from the federal consolidated fund to the provinces and local units based on their expenditure needs and revenue capacity. The responsibility for determining and recommending such grants lies with the National Natural Resources and Fiscal Commission.

The commission has divided equalization grants into three categories: minimum grant, formula-based grants, and performance-based grants.

Out of the Rs 60 billion recommended for provinces in 2024/25, Rs 15 billion is allocated for the minimum grant, Rs 42.6 billion for formula-based grants, and Rs 2.4 billion for performance-based grants, as per the commission’s recommendation.

Likewise, out of the recommended Rs 88 billion for local units, Rs 26.68 billion is designated for the minimum grant, Rs 57.79 billion for formula-based grants, and Rs 3.52 billion for performance-based grants.

Equalization grants recommended for provinces: