Saturday, August 20, 2022

Local governments earn only 7.22 per cent internal revenue

 Kathmandu, Aug. 14

It seems that the local bodies have a long way to go to obtain independence from their own revenue mobilisation.

The recent report of the Office of the Auditor General (OAG) said that the local governments could only earn 7.22 per cent (Rs. 35.62 billion) of their total income in the Fiscal Year 2020/21. The 753 local bodies in the country received Rs. 493.03 billion including the grants from the federal government in that year.

Their major income includes Rs. 75.63 billion from the savings of the previous year and Rs. 73.40 billion from revenue sharing. They had estimated to receive about Rs. 203.17 billion income other than the grants from the federal government.

According to the Auditor General, many local bodies have not clarified the reduced amount while transferring the funds from FY 2019/20 to 2020/21. It said that 167 local governments did not disclose the reasons of the reduced responsibility transfer of Rs. 2.27 billion.

Likewise, their accounts show about Rs. 684 million less amount in the respective bank accounts. The national auditing body has suggested to control the practice to approve the budget with unallocated amount. Such amount would be distributed by the decision of the executive of the respective local body, spent mostly in the one-time projects and programmes, and fiscal discipline is not maintained.

The OAG audited Rs. 993.59 billion amount spent by 744 local bodies in 2020/21. Including the due of the 55 local bodies from the previous year, the amount increased to Rs. 1051.9 billion. Of that amount about Rs. 41.19 billion has remained as arrears.

In that amount, Rs. 5.60 billion needs to be recovered, Rs. 30.79 billion needs to be accounted while Rs. 4.79 billion is the money taken in advance and deadline of which is already crossed.

 Published in The Rising Nepal daily on 15 August 2021.

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