SATV, Kathmandu, Jun. 09 - The government has allocated a total budget of Rs. 424.27 billion for provinces and local levels for the upcoming Fiscal Year 2026/27 under the intergovernmental fiscal transfers.

The budget includes financial transfers under headings such as equalization grants, conditional grants, special grants, and supplementary (capital) grants.

According to the details made public by the Ministry of Finance on Monday, Rs. 109.65 billion has been allocated to the seven provinces, while Rs. 314.62 billion has been earmarked for 753 local governments.

Among the local levels, the government has allocated Rs. 11.73 billion to metropolitan cities, Rs. 11.50 billion to sub-metropolitan cities, Rs. 138.66 billion to municipalities, and Rs. 152.71 billion to rural municipalities.

On May 29, Finance Minister Dr. Swarnim Wagle presented the budget of Rs. 2,124.34 billion for the next fiscal year 2026/27.

The fiscal transfers for provincial and local governments for the fiscal year 2026/27 are slightly higher than that of the current fiscal year 2025/26.

About Rs. 417 billion was allocated for provinces and local levels in the current fiscal year 2025/26. Of the total amount, about Rs. 97.56 billion had been allocated to the provinces, while Rs. 320.26 billion had been allocated to local governments.

The amount allocated by the government to provinces and local levels under the financial transfer heading can be spent under equalisation grants, which include minimum grants, formula-based grants, and performance-based grants.

Conditional grants include both recurrent and capital expenditures, while special grants also include both recurrent and capital components. Supplementary grants are solely capital in nature.

Of the total Rs. 109.65 billion for provinces, the government has allocated Rs. 61.50 billion under equalisation grants, Rs. 39.72 billion under conditional grants, Rs. 3.82 billion under special grants, and Rs. 4.60 billion under supplementary grants.

Similarly, of the total amount allocated for local governments, around Rs. 90.20 billion has been allocated under equalization grants, while around Rs. 206.08 billion has been allocated under conditional grants, Rs. 9.40 billion under special grants, and Rs. 8.92 billion under supplementary grants.

Highest allocation for Madhes Province, lowest for Gandaki

Among the provinces, Madhes Province has received the highest amount of grants allocated by the federal government for the upcoming fiscal year 2026/27.

Of the total financial transfers of Rs. 109.65 billion, Madhes Province will receive Rs. 17.59 billion, while Karnali Province will receive the second-highest amount of Rs. 17.20 billion.

Of the total, Madhes Province will receive Rs. 7.84 billion under equalisation grants, Rs. 8.10 billion under conditional grants, Rs. 700 million under special grants, and Rs. 947 million under supplementary grants.

Likewise, Karnali Province will receive Rs. 10.63 billion under equalisation grants, Rs. 5.42 billion under conditional grants, Rs. 485 million under special grants, and Rs. 667 million under supplementary grants.

The government has allocated Rs. 16.47 billion for Koshi Province, including Rs. 9.11 billion under equalisation grants, Rs. 5.95 billion under conditional grants, Rs. 550 million under special grants, and Rs. 844 million under supplementary grants.

Similarly, Rs. 15.21 billion has been allocated for Bagmati Province for the fiscal year 2026/27. This includes Rs. 8.42 billion under equalisation grants, Rs. 5.82 billion under conditional grants, Rs. 528 million under special grants, and Rs. 438 million under supplementary grants.

The government has allocated the lowest amount of grants to Gandaki Province. Gandaki Province will receive Rs. 12.72 billion, including Rs. 7.84 billion under equalisation grants, Rs. 3.93 billion under conditional grants, Rs. 395 million under special grants, and Rs. 554 million under supplementary grants.

Similarly, for Lumbini Province, the government has allocated Rs. 14.41 billion in grants, including Rs. 8.56 billion under equalisation grants, Rs. 4.45 billion under conditional grants, Rs. 633 million under special grants, and Rs. 765 million under supplementary grants.

Of the total allocation of Rs. 16.01 billion for Sudurpaschim Province, it will receive Rs. 9.06 billion as equalisation grants, Rs. 6.03 billion as conditional grants, Rs. 527 million as special grants, and Rs. 388 million as supplementary grants.