Provincial, local governments to get Rs. 417.8 bn grant, Karnali tops

By A Staff Reporter,Kathmandu, June 3; In the upcoming fiscal year 2025/26, all local and provincial governments will receive a total grant of Rs. 417.82 billion from the federal government.

The federal government allocates four types of grants to lower level governments.

A total of Rs. 320.26 billion grant has been allotted to 753 local levels for 2025/26.

According to the intergovernmental fiscal transfer details made public by the Ministry of Finance on Monday, this amount will be sent to the local levels under four headings.

Among the local levels, Rs. 11.74 billion is set aside for the metropolitan cities, Rs. 11.38 billion for the sub-metropolitan cities, Rs. 143.10 billion for the municipalities and Rs. 154.2 billion for the rural municipalities.

There are six metropolitan cities, 11 sub-metropolitan cities, 276 municipalities and 460 rural municipalities in Nepal.

The federal government has earmarked Rs. 97.56 billion in grants to the seven provincial governments.

Among the provinces, Karnali Province will receive the highest grant allocation at Rs. 16.04 billion. In contrast, Gandaki Province will receive the smallest share, with an allocation of Rs. 12.23 billion.

Likewise, the government has provided Rs. 14.50 billion to Kohsi Province, Rs. 12.73 billion to Madhes Province and Rs. 13.81 billion to Bagmati Province.

Similarly, the government has transferred Rs. 14.01 billion to Lumbini Province and Rs. 14.20 billion to Sudurpashchim Province.

The Ministry of Finance said that the grant distribution includes equalisation grants, conditional grants, special grants, and complementary (supplementary) grants. 

Equalisation grants are allocated based on minimum criteria, formula-based, and performance-based approaches.

Similarly, conditional and special grants are provided under both recurrent and capital expenditure categories, while supplementary grants will be of only capital nature.