Nuwakot. Although the basis for revenue sharing among the federal, provincial and local levels is clear constitutionally, the local level is legally and practically less than what it is supposed to get.

At an interaction organized by Shivapuri Rural Municipality of Nuwakot in collaboration with the National Natural Resources and Fiscal Commission at the rural municipality office in Serabagar on Tuesday, discussions were held on the distribution of the country’s revenue, the status of existing grants, budget inadequacy and development works. During the discussions, the Commission’s members and people’s representatives said that the rights of the local level guaranteed by the constitution have not been effectively utilized as the financial federalism has not been implemented effectively as per the spirit of the constitution.

Finance Commission member Bipin Raj Niraula said that the grants have not been distributed to all the local levels as per the recommendations made by the Commission. According to him, although the constitution has stipulated the basis for revenue sharing at the federal, provincial and local levels, the government could not provide more equalization grant to the local governments having to follow the Intergovernmental Finance Management Act-2074 BS.

Chairperson of Shivapuri Rural Municipality, Govinda Prasad Thapaliya, reminded that the National Association of Rural Municipalities had urged time and again not to curtail the economic rights of the local levels. He says that the projected programs are affected because they do not get the financial equalization grants that they are legally entitled to.

Chief Administrative Officer of the rural municipality, Badrinath Lamsal, said that 50.8 million liabilities were pending in the last fiscal year. According to him, the conditional grant could not be spent under other headings and complained that the amount was not spent as it could not be explained to all.

Article 60 (2) of the constitution empowers the commission to distribute the revenue collected by the federal government to the federal, provincial and local governments in an equitable manner. Clause 6 (6) of Chapter 3 of the Intergovernmental Financial Act states that 15 percent of the VAT and excise duty to be received by the provinces and 15 percent of the amount to be received by the local level should be allocated in the format to be prepared by the commission.

According to the Act, the allocation of revenue is made on the basis of population, geography, human development index, infrastructure development, expenditure needs, efforts made in revenue collection and special circumstances. There is a provision that the provinces and local governments will get a fair share in the distribution of benefits from natural resources.