567 Billion Rupees to Provincial and Local Governments in Fiscal Year 2024/25

In a significant move aimed at bolstering provincial and local development initiatives, the federal government has unveiled plans to allocate a substantial sum of 567 billion rupees to Provincial and Local Governments (PLGs) in the upcoming financial year 2024/25. This allocation will be facilitated through fiscal transfers and revenue sharing directly from the federal budget.

Finance Minister Barshman Pun, presenting the budget statement in the Parliament, revealed the detailed breakdown of the allocation. As per the recommendations put forth by the National Natural Resources and Fiscal Commission (NNFRC), the federal government has earmarked Rs. 60 billion for provinces and Rs. 88 billion for local levels specifically for fiscal equalization grants.

Additionally, conditional grants totaling Rs. 25.84 billion for provinces and Rs. 28.88 billion for local levels have been allocated. Further, supplementary grants of 6.2 billion rupees for provinces and 7 billion rupees for local levels have been designated. Moreover, special grants amounting to 4.4 billion rupees for provinces and 8.5 billion rupees for local levels have been included in the allocation.

Minister Pun emphasized that the distribution of conditional, supplementary, and special grants will be contingent upon performance metrics. The government aims to incentivize effective governance and prudent resource utilization at the provincial and local levels.

In addition to these grants, the federal government estimates that approximately 159 billion rupees will be transferred to provincial and local levels as part of revenue sharing arrangements.