NPC enforces distribution of resources based on equality and quality

Kathmandu: In a bid to increase the effectiveness of fiscal federalism, the National Planning Commission (NPC) has implemented the system of distribution of resources via equalization and special grants based on quality.

The NPC shared information that it had prepared the action plan for implementation of the 16th periodic plan by incorporating this provision. As per the new scheme, the classification is done based on revenue capacity and physical infrastructures of the local levels and provinces.

‘Classification is a major basis for allocation of resources, which would ensure more equalization grants to local levels from the central government,’ said Prof Dr Shiva Raj Adhikari, Vice Chair of NPC.

Human development, employment creation and increase in productivity would be prioritized by the new system. It further guarantees sub-national governments equitable access to resources, thereby strengthening fiscal federalism.

The NPC further informed that it was working actively to make the projection of resources, budget ceiling and midterm expenditure framework (MTEF) more scientific so that the projects would be managed well to achieve expected results.

Similarly, the 16th periodic plan has given priority to the localization of sustainable development goals (SDGs) and the process of graduating from the status of the least developed country to the developing one. The implementation action plan is expected to consolidate the coordination among three tiers of governments- federal, provincial and local.

The principle of ‘Leave No One Behind’ has been internalized by the 16th periodic plan. Meanwhile, the government has revised the work procedure on the allocation of special grants to sub-national levels to meet the goals of human development, employment, production and livelihood.

Owing to the unclear criteria of special grants, most of the amount under this was spent on infrastructures and training, which failed to meet the constitutional and legal aspirations.

Meanwhile, the NPC is also set to update the project banks.

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