KATHMANDU, March 24: The government is providing fiscal equalization grants (FEG) worth Rs 148 billion to sub-national grants in the next fiscal year.

According to the National Natural Resources and Fiscal Commission (NNRFC), it has recommended the federal government to provide the aforementioned amount in the FEG to provincial and local governments in the year 2024/25. Out of the recommended amounts, Rs 60 billion will be provided to seven provinces, while Rs 88 billion will be given to the 753 local governments under the heading.

The constitution has maintained that the FEG should be distributed to the sub-national governments on the basis of their expenditure needs and revenue capacity. Although the FEG is considered one of important fiscal transfers out of the four grants, most of the time the sub-national governments have been receiving more conditional grants than the FEG.

According to the NNRFC, Karnali Province will be receiving FEG worth Rs 10.36 billion, the largest of all, for FY 2024/25. Likewise, Koshi Province will be receiving Rs 8.94 billion.

Sudurpaschim Province will get Rs 8.72 billion, which will be followed by Lumbini Province (Rs 8.28 billion), Bagmati Province (Rs 8.24 billion) and Madhesh Province Rs 7.79 billion. Gandaki Province will receive Rs 7.63 billion for the next FY.   

Based on the work performance of the last fiscal year, Koshi Province has received the highest of 40.89 points, which was followed by Madhesh Province (37.31 points), Bagmati Province (37.29 points), Gandaki Province (33.07 points), Karnali Province (30.98 points) while Sudurpaschim Province achieved 31.08 points. Lumbini Province with its 26.99 points was recorded the least in the work performance during the period.

Likewise, Madhesh Province achieved 10.51 points to top the list in terms of revenue mobilization in its region. All the provinces achieved zero points on utilizing their conditional grants in the prescribed areas.   

Govt spent Rs 22.39 billion to provide subsidized loans in the first seven months

The government assumed financial liabilities of Rs 22.39 billion while providing subsidized loans to the prescribed sectors during mid-July 2023 and mid-February 2024.

According to the government records, the total subsidized loans of Rs 214 billion were issued in the review period. Out of the 10 sectors being given the subsidized loans, more than half (Rs 129 billion) were provided to the agriculture and livestock development segment.

The subsidized loans under women entrepreneurship was recorded at Rs 81.51 billion, while Rs 1.38 billion was disbursed for textile industries. Dalit Community Business Development Loans, Private Residence Construction loans for earthquake victims and youth project loans for returnee migrant workers, among others, were the major headings that the government provided the subsidized loans for.   

 
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