Budget Allocation and Disbursement in Two Municipalities: Bardibas and Mithila

Abstract

The purpose of the thesis is to highlight the Budget allocation and disbursement in two municipalities: Bardibas and Mithila. After long political unrest, presently Nepal has adopted federal political system. The constitution of Nepal 2015, replacing the interim constitution from 2007, defines Nepal as federal democratic republic and provisions with three tiers of government: local, provincial and federal.Local levels also named as grass roots democracy are formed in the sense that it ensures the citizens’ access to the services to their doorsteps. This thesis examined the similarities and differences between budget allocation and disbursement in Bardibas & Mithila municipalities and trace out the degree of absorptive capacity in respective municipalities along with trend and pattern of allocated, disbursed and remain budget. All local government bodies have to oblige to conduct a participatory development planning process that is budget. Appropriate selection of necessity developmental project, allocation of amount to the respective project, control, monitor and evaluation of the project, amount disbursement after completion and measurement of absorptive capacity of the budget are vital issues in budgetary practice. This study is based on secondary data derived from SUTRA through municipal assistance. Data are analyzed by using central tendency, percent age analysis as well as described by tables and figures. Descriptive research design has used to explore objectives of the thesis. This study shows, among various source of budget conditional grant has higher disbursement percentage. The disbursement budget of Bardib as municipality for the FY 76/77, 77/78 and 78/79 remain to 49 percent, 52 percent and 54 percent. Similarly,for the Mithila municipality remain to 56 percent 82 percent and 73 percent respectively. The allocation trends for both municipality seems to be increasing. The absorption capacity of Mithila municipality is higher than Bardibas municipality by 7 Percent, 30 Percent & 19 Percent in FY 76/77, 77/78 & 78/79 respectively. The study concludes that Mithila municipality has higher resources mobilization i.e. absorptive capacity. The objective of economic development can only be achieved when government expenditure are made wisely and meaningfully in the productive sector. Key words: Absorptive capacity, Budget, Devolution and Local Government.