NPC initiates annual budget process for FY 2024-25: Calls for project proposals from provinces and local bodies

KATHMANDU: The National Planning Commission (NPC) has officially kicked off the annual budget preparation for the upcoming fiscal year 2024-25. In a circular issued to provinces and local levels, the NPC has invited proposals for projects and programs eligible for federal supplementary and special grants in the coming fiscal year.

Provinces and local bodies are instructed to submit their proposals for plans and programs under this grant heading by the 12th of February. Deputy-spokesperson of the National Planning Commission, Diwakar Luintel, clarified that the federal government provides supplementary and special grants in response to the demands of the states and local levels. He emphasized that only proposals meeting the necessary criteria and procedures will be considered eligible for such grants.

Luintel explained, “Supplemental and special grants are given on the basis of demand. After the local level and the province submit proposals within the specified criteria and time limit, they go into the process of selecting the plans/programs that have been requested.”

According to the NPC, proposals for supplementary and special grants can be submitted exclusively online. The selection committee, chaired by members of the National Planning Commission, will analyze the online proposals and recommend budget allocations for suitable plans and programs.

The Intergovernmental Fiscal Arrangement Act, 2074 (2017) empowers the Central Government to provide supplementary grants to provinces and local levels for infrastructure development plans. Special subsidies are also allocated for essential services like education, health, and drinking water, with a focus on achieving balanced development and targeting socially backward communities.

To qualify for supplementary and special grants, provinces and local levels must adhere to specific criteria and procedures outlined by the federal government. The NPC stressed the importance of confirming the need and justification when recommending projects and programs for such grants. The selection will prioritize projects that enhance production and productivity, generate employment, and address damages caused by natural disasters like earthquakes.

Key criteria include completing preliminary project steps, detailed project reports (DPR), environmental impact assessments (EIA), and financial cost estimations. The total cost estimate for projects to be implemented by rural municipalities and municipalities under the supplementary grant ranges from 10 million to 100 million rupees.

Sub-metropolitan cities and metropolitan cities can propose projects ranging from 50 million to 250 million rupees. Provincial governments can submit proposals for projects costing 200 million to 1 billion rupees under the supplementary grant.

For special grants, local levels can propose projects costing at least 50 million to 100 million rupees, while provinces can request special grants for projects and programs costing at least 100 million rupees.

The procedures outline that 50 percent of the financial burden of projects and programs implemented under the supplementary grant should be borne by the respective municipalities or provinces.

Additionally, at least 50 percent of the annual estimated expenses for plans and programs under this subsidy title should be allocated by the concerned local level or state government as a subsidy. There is also a provision that projects under the supplementary grant should be completed within three years.