Budget crunch stalls Rukum Paschim projects

By Raju Lamichhane.Rukum Paschim, Dec. 18: Development plans at the local level in Rukum Paschim have been severely impacted due to annual reductions in grants from the federal and provincial governments, resulting in many projects remaining incomplete or unimplemented.

Last year, a plan to construct Kiriyapurti Trust facilities at seven locations in Musikot Municipality Ward No. 2 was approved with a budget allocation of Rs. 980,000. The projects, listed in the municipality’s red book under the federal government’s equalisation grant, were not completed. 

Ward Chairman Dinesh Khadka stated that construction had not even begun in Bannechaur, Jaljale, and Raksekot, while in Jyamirekhola, Mulakhola, Gaunbari, and Simkhola, the full allocated amount could not be disbursed despite the completion of work. He added that dozens of projects, including the Kiriyapurti Trust, were affected due to grant cuts.

Similarly, more than three dozen development projects listed in the red book of Musikot Municipality Ward No. 10 last year were not completed. These included projects related to transportation, education, health services and drinking water supply. 

Ward Chairman Dhan Bahadur Khadka said the budget cuts in projects such as roads and water supply, scaffolding procurement, livestock insurance, agricultural promotion and disaster management had adversely affected implementation.

Infrastructure projects in key sectors such as education, health, transportation and drinking water have suffered as grants from higher levels of government were either delayed or disbursed in amounts lower than promised. “Villagers were happy when dozens of ward-level plans were included in the red book last year. But that happiness could not be realised. Both the people and the local government were left disappointed,” said Ward Chairman Khadka

Ward chairmen complain that projects approved by the municipal assembly after extensive preparation could not be launched in some cases due to grant cuts, while in others, work had to be postponed or carried out with minimal funding. This, they say, has not only delayed projects but has also raised concerns about their quality.

Every year, grants allocated by the federal and provincial governments to local levels under equalisation and revenue-sharing schemes are being reduced. According to Musikot Municipality, grants amounting to Rs. 292.37 have been cut over the past three fiscal years, resulting in the non-completion of numerous projects.

Municipal Accounting Officer Narendra Bista said that of the Rs. 571.4 million 59 thousand proposed to the federal government for the last fiscal year 2024/25, the municipality received only Rs. 506.3 million 5 thousand 308. Similarly, of the Rs. 109.1 million 60 thousand proposed to the Karnali Provincial Government, only Rs. 102.3 million 98 thousand 490 was received. Revenue-sharing grants proposed at Rs. 125 million 59 thousand 987 were reduced to Rs. 116.7 million 496. Bista said the gradual reduction in grants has weakened the implementation of the municipality’s annual programmes and budget.

In the fiscal year 2023/24, grants amounting to Rs. 45.115 million from the federal government, Rs. 14.73 million from the provincial government, and Rs. 42.89 million from revenue sharing were cut. In fiscal year 2022/23, Musikot Municipality did not receive Rs. 39.33 million from the federal government and Rs. 53.295 million from revenue sharing.

The reduction in grants has had a direct impact on local governments and beneficiaries. Acting Chief Administrative Officer of Chaurjahari Municipality, Sher Prasad Dhakal, said the municipality has been facing increasing liabilities due to grant reductions, particularly in the final quarter of the fiscal year.

“Some projects had already started, but when funds were cut after construction was completed, the municipality was forced to carry the liability into the next fiscal year,” he said.

Over the past three fiscal years, Chaurjahari Municipality has experienced grant cuts totalling Rs. 196.412 million. In fiscal year 2023/24, the federal government cut Rs. 33.998 million, followed by Rs. 32.797 million in 2022/23 and Rs. 36.564 million in 2021/22. During the same period, provincial government grants were reduced by Rs. 92.222 million, Rs. 75.263 million and Rs. 40.1853 million respectively. Revenue-sharing grants were also reduced by Rs. 66.29586 million, Rs. 49.115 million and Rs. 24.743 million.

Grant cuts and delays have affected local development and service delivery across the district, including in Musikot and Chaurjahari. Govinda Prasad Subedi, Chief of the Treasury and Accounts Controller’s Office in Rukum Paschim, said the reductions would also have long-term financial consequences.

“Local government revenue is already limited in rural districts like Rukum Paschim,” he said. “Cuts in grants delay or halt pre-approved development projects, leading to poor-quality development, disruptions in service delivery, a decline in local employment and a broader impact on economic activities,” he added.