27 local governments miss budget deadline for fiscal year 2026-27

A significant number of local governments in Nepal failed to meet the June 24 deadline for presenting their budgets for the upcoming fiscal year 2026-27. A total of 27 local administrative bodies, including two sub-metropolitan cities, 10 municipalities, and 15 rural municipalities, could not submit their financial plans to their respective assemblies on time.

The Ministry of Land Management, Cooperatives, Federal Affairs and General Administration reported that 726 out of 753 local governments successfully submitted their budgets. The delays were attributed to various factors, including internal conflicts within local government leadership, disputes among elected representatives regarding policy and budget allocation, and federal government oversight on spending.

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tensions between local government heads and chief administrative officers, disagreements among elected representatives over policy, programmes and budget allocation, and federal intervention over budget spending had led to delays in budget presentation.

Ministry spokesperson Ekdev Adhikari cited disagreements over budget allocation and efforts to prevent the misuse of fiscal transfer funds as key reasons for the delays. Rajendra Pyakurel, chief executive officer of the National Association of Rural Municipalities in Nepal, also pointed to inadequate preparation, personal or family illnesses of officials, and a failure to reach consensus on budget formulation.

The Local Government Operation Act and the Intergovernmental Fiscal Management Act mandate the timely submission of budgets. Missing this deadline carries financial consequences, as local units lose five points in performance indicators for conditional grants, impacting their equalization funding. The National Natural Resources and Fiscal Commission uses these performance scores, based on 17 indicators, to award grants.

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inadequate preparation, illness of chairpersons or their family members, and failure to reach consensus on budget formulation, among other reasons, had contributed to the delay.