Local government institutions -- metropolises, sub-metropolises, municipalities and rural municipalities -- have presented their annual policies, programmes and budget on Asar 10 (last Friday) for the upcoming Fiscal Year 2022-23. The date for tabling of the local government budget has been fixed by the Intergovernmental Fiscal Arrangement Act, 2017, and 753 local governments put in their preparedness to announce the policies, programmes and present budget on the date scheduled by law. Needless to say, the Act has also fixed the similar dates for tabling annual budget for the federal and provincial governments as well. This provision has been envisaged to ensure that the annual budgeting was done in time to ensure that development resources estimate was done in a proper, systematic, objective way and timely manner and allocations matched with the real needs of the people.
According the news reports, around 93 per cent of the municipalities and rural municipalities have managed to ensure compliance with the legal provision related with budget planning and announcement whereas around seven per cent have failed to meet the statutory obligations. It is sad to note that the Madhes Province has topped the list of the failed ones where 20 municipalities and 12 rural municipalities have not succeeded invariably to present their programmes and budget to meet the legally prescribed schedule. In fact, the local governments in this province have not been able to improve their performance efficiency in terms of programme and budget formulation.
Records state that they had lagged behind the municipalities in other provinces not only in formulating programme and budget but in their proper execution and producing concomitant results as well. However, excuses in failing to meet the schedule can be marshalled arguing that the elected representatives took over the charge just a few weeks ago and they had little time to get prepared for it. It is expected that those local governments who failed to present the budget to meet the schedule would accelerate the process and ensure that their respective budget formulation and endorsement process completes before the onset of the new financial year that begins from mid-July.
Anyway, a closer scrutiny of the policies and programmes of the local governments announced for the next fiscal year demonstrate that these grassroots democratic institutions have achieved some semblance of regularity and stability in carrying out their mandates and competencies. The budget formulation is probably a municipality's most important work and local government officials, ordinary populace and on top of this the country's overall development rest on this product. The annual budgeting serves a number of functions at the local level. At the most basic level, it is a legal document approved by the local assembly (legislature) that gives local government officials the legitimised authority to fulfil mandates and obligations, carry out target activities, mobilise resources and meet expenses involved in local actions.
Most importantly, it allocates resources to the key activities reflecting local policies and priorities. It also sets limits on expenditures and allows expenses to incur only for those actions which are prioritised and endorsed through participatory democratic process. The statements of goals and objectives explicated in the budget convey how resource appropriation and allocation decisions relate to a wider vision for the future of the municipality. A budget is an evaluation tool for the voters to compare the commitments made in the previous year's budget with actual accomplishments.
To cite an example, immediate past mayor of Kathmandu made commitments in the budget like designing of monorail and metrorail projects in the Kathmandu Metropolis, which were assessed as dreamy and unrealistic. His popular rating had declined and performance of the municipal government had been rated poor. As per the data, around 70 per cent of the incumbent executives lost their bid for re-election particularly due to the fact that they failed either to formulate the budget responding to the local needs and priorities or paid no attention to implement the budget priorities.
Local budget is thus an essential means by which to assess government’s efforts for the realisation of people's social and development aspiration broadly defined as economic and social and cultural rights of the people. Close relationship between public budgets and human rights has been recognised by international human rights mechanisms in their assessment of state compliance with human rights obligations. Nepal’s local governments, besides the federal and provincial ones, have been cast into the role of key actors in the realisation of the fundamental rights of the people.
The constitution has made them responsible in meeting the right to education, health, food, shelter and clean environment, among others. Since these local government obligations constitute the major components of the economic, social and cultural rights, local budgeting should be mindful as to how these fundamental obligations are addressed. In fact, it is the responsibility of the civil society actors, grassroots organisations, human rights activists and others to conduct and use social audits, expenditure tracking, budget scorecards and other budget assessment tools to develop critical evidence of human rights efforts, and to advocate for necessary budget-related steps to be taken for better realisation of human rights. In this way, civil society actors and watchdog groups should keep vigil and help close the gap between rhetoric and reality, and hold governments to account for their actions.
Similarly, if people are to hold their governments to account for realising rights, they too need to know about the budgeting process. A study on the relationship between budget and human rights states that human rights obligations are not limited to the national or central government. Local governments also have an obligation to ensure that people’s rights of access to budget information and to participate in the budget process are effectively realised. It is expected that the local governments in Nepal take cognisance of their obligations to address human rights to enhance their rationality and legitimacy as the important democratic institutions at the grassroots level.
(The author is presently associated with Policy Research Institute (PRI) as a senior research fellow. firstname.lastname@example.org)