Develop the Quantifiable and Measurable Sectoral Indicators for Determining Inter-Government (Among Sub-National Government) Share of the Benefits from the Mobilization of Natural Resources

Team Leaders: Juddha Bahadur Gurung, Krishna Raj Panta Dr., and Shailendra Pokharel

Team Members: Bhuvan Keshar Sharma Dr.; Govinda Basnet Dr.; Khimananda Kandel Er.; Sharada Khanal Ghimire; Sajani Shrestha Dr.; Damodar Bhandari; Lilanath Rimal Er.; Niranjan Devkota Dr.; Manish Kokh (Shrestha)

Duration: September 2018 to June 2019 (6 months)

Fund: NPR 6,481,381

Source: The World Bank Group

Nature of the project: Independent Study for the use of the National Natural Resources and Fiscal Commission/Government of Nepal

About the Project

The success of the federal system depends on equitable, transparent and fair fiscal transfer among the central, provincial and local governments.  The fundamental basis for revenue sharing and fiscal transfer are prescribed in the Constitution of Nepal and the National Natural Resources and Fiscal Commission Act (NNRFC) 2074. The ratio of royalty distribution system to the center, provincial and local government has been prescribed in the Intergovernmental Fiscal Management Act 2074.  The criteria for balanced and equitable distribution of royalty on the basis of benefits from the mobilization of natural resource has been prescribed in NNRFC act. On the basis of these provisions investment pattern for natural resources mobilization from federal, provincial and local government and inter-government (among sub-national government) share of benefits from the natural resources mobilization shall be calculated based on certain well defined sectoral indicators.

National Natural Resources and Fiscal Commission (NNRFC), by the provision of Article 251 of the Constitution of Nepal, is responsible to devise a mechanism to recommend the share of investment of the central, provincial and local government, and basis of benefits sharing from the mobilization of natural resources. Before devising this mechanism, the NNRFC intends to get the experts’ service to develop sectoral indicators for measuring investment pattern from federal, provincial & local government and inter-government (among sub-national government) share of benefits from the natural resources mobilization.

The main objective of the proposed assignment is to develop sectoral indicators for measuring investment pattern from federal, provincial and local government and inter-government (among sub-national) share of benefits from the mobilization of natural resources, and ultimately making fair and equitable distribution of royalty in the spirit of the Constitution of Nepal.

The specific objectives are:

• To develop sectoral indicators as provisioned in the Constitution and prevailing laws for measuring inter government share of benefits of natural resources (royalty distribution).
• To prepare a report for making common understanding on prevailing legal provisions regarding balanced and equitable benefits distribution of natural resources. It also includes the investment pattern from federal, provincial and local government for natural resources mobilization.
• To update available information and data in the field.