Threat to fiscal equalisation grants

The grants must be provided unconditionally to safeguard Nepal's federalism.

In the fiscal year 2024-25, the government allocated Rs88 billion in fiscal equalisation grants for local governments and Rs60 billion for provincial governments. However, on February 10, the Office of the Comptroller General issued a circular stating that provinces and local governments would receive only 13.24 percent of their third instalment. This decision followed the Ministry of Finance directive on February 5, instructing the Comptroller General office to reduce grants due to revenue shortfalls.