March 25: The National Natural Resources and Fiscal Commission has recommended the government to allocate fiscal equalization grant worth Rs 60 billion to the provinces and Rs 88 billion to the local levels for the upcoming fiscal year. The recommendation was based on the provisions of minimum grants, formula-based grants, and performance-based grants.

The grant is to be sourced from the Federal Consolidated Fund. The constitutional provision mandates that the necessity of expenditures and revenue capacity of provincial governments and local levels be assessed while allocating fiscal equalization grants from the Federal Consolidated Fund.

Out of the total Rs 60 billion of the fiscal equalization grant that has been recommended for the provinces in the upcoming fiscal year, the minimum equalization grant is equivalent to Rs 15 billion, the formula-based equalization grant is equivalent to Rs 42.6 billion and the grant given on the basis of performance is equivalent to Rs 2.40 billion.

The commission has recommended providing Rs 8. 94 billion to Koshi Province, Rs 7. 79 billion to the Madhesh Province, Rs 8.24 billion to Bagmati Province and Rs 7.63 billion to Gandaki province. Similarly, the commission has recommended providing Rs 8.28 billion to Lumbini Province, Rs 10.36 billion to Karnali Province and Rs 8.72 billion to Sudurpaschim province as the fiscal equalization grant.

Likewise, the commission has also recommended the federal government to provide Rs 88 billion as the fiscal equalization grant to the local levels in the next fiscal year. The recommended minimum equalization grant to the local levels for the next fiscal year is Rs 26.68 billion, the formula-based equalization grant is Rs 57.79 billion and the grant to be provided based on performance is Rs 3.52 billion. -- RSS