Kathmandu, May 30 -- The federal budget for the upcoming fiscal year has increased grants to provinces, while reducing allocations to local units compared to the current fiscal year.

The Constitution of Nepal provides for the federal government to allocate budgets to provinces under the headings of equalisation, conditional, complementary, and special grants, subject to certain conditions. It mandates fiscal transfers based on recommendations from the National Natural Resources and Fiscal Commission, subject to various criteria.

For the upcoming fiscal year, the federal government has projected mobilisation of more than Rs 600 billion at provincial and local governments. This amount is slightly higher than that of the ongoing fiscal yea...