Resource Mobilization

Fiscal Decentralization and Local Resource Mobilization in Nepal : The Case of District Development Committees and Village Development Committees

Resource mobilization refers to the collection and utilization of resources in an organized way to produce results according to the given system of governance. It is based on a flow concept in which the inflow and outflow of resources are the concerns of "who gets what and how much from whom". Basically, the flow of local resource is the concern of fiscal issue of the local government which focuses on how the local government generates the revenue measured in monetary unit to meet the level of expenditure incurred to provide services for the benefit of the local people. Therefore, the fiscal decentralization in relation to the local government is considered as an important means of the system of governance. The critical issues of governance in the context of local resource mobilization are: Who controls? Who decides? And how optimally resources are collected and distributed to use? and so on. Fiscal decentralization refers to the process of granting autonomy to the local self government to mobilize financial resources which shows how much central government cedes fiscal impact to sub-national governments. It is a bottom up planning approach with the aim of converging the people's participation. Nepal is a country rich in diverse resources. Considering the eminent role to be played by local institution to mobilize these resources, Nepal has adopted the principle of decentralization since 1960 and various acts and laws were enacted since then to strengthen the efforts. According to the present Local-Self Governance Act (LSGA)-1999, local resources consisting of the grants provided by the central government (matching and non-matching grant), local revenue (tax and non-tax) and loan (internal and external) could have been implemented by the respective local bodies. This paper, therefore, has attempted to analyze the present status of revenue collection and expenditure practices as well as its scope and challenges of Village Development Committees (VDCs) and District Development Committees (DDCs).
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