Eight local bodies of Banke district have failed to utlise a big chunk of grants provided by the central government, preventing developing activities from gathering pace.

The central government has transferred two tranches of grants to local bodies since the beginning of this fiscal year in mid-July. But local bodies in Banke have utilised only 44 percent of the first tranche of grant sent in mid-July. These local bodies have also failed to make use of a big chunk of the second instalment of grants transferred in mid-November.

“Altogether 20 percent of grants forwarded to local bodies have been utilised so far, albeit we are yet to get details of spending,” said Thakur Prasad Poudel, chief of the Treasury Office located in Nepalgunj.

The central government has allocated a budget of Rs3.3 billion for eight local bodies in Banke for the current fiscal year. Of this amount, Rs2.3 billion is in the form of fiscal equilisation grant and the remaining Rs951.2 is in the form of conditional grant. The biggest recipient of grants among local bodies is Nepalgunj Sub-metropolitan city, which has been allocated a budget of Rs682.6 million for the current fiscal year. Rapti-sonari rural municipality, which is located in the most remote part of Banke district, has been earmarked a budget of Rs543.4 million for this fiscal year.

The government had started transferring budget directly to local bodies from this fiscal year, following the shift from unitary to federal system of government. Direct budget transfers are expected to empower local bodies and enable them to provide public goods and services in an effective manner and expedite development works. But the lack of fund absorptive capacity of these local bodies has poured cold water on the central government’s plan to promote bottom-up development.

Chiefs of many local bodies said lack of proper regulations and guidelines have been preventing them from executing various development works. Also, local bodies, according to them, are facing shortage of staff, such as accountants and engineers. As a result, a ward secretary is being compelled to rush from one ward office to the other to execute tasks.

“The biggest problem we are facing is shortage of qualified human resources,” Uma Thapa Magar, deputy mayor of Nepalgunj Sub-metropolitan city, said. “Many ward offices also do not have proper office buildings.”

The law has also envisaged formation of Revenue Advisory Committee at the local level to enable mobilisation of financial resources through collection of taxes and fees. But local bodies in Banke are facing problems in generating their own revenue by leving taxes and fees.

“Considering the performance so far, the public cannot expect much from local bodies of Banke in the current fiscal year,” said Poudel.