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Comparative Study of Local Resource Mobilization of Rupandehi's Vdcs with National Level

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Comparative Study of Local Resource Mobilization of Rupandehi's Vdcs with National Level Comparative Study of Local Resource Mobilization of Rupandehi's VDCs with National Level Pramshu Nepal, Ph.D.* Abstract In this paper, the researcher defines and analyzes the situation of local resources mobilization patterns by VDCs in national level. The Researcher also studies and compares the situations of Rupandehi districts' VDCs with national level. Similarly, this research tries to identify major income sources of VDCs. This research also tries to identify major internal sources of income of VDCs. Rupandehi district's VDCs have the second highest internal income (Rs. 124.68 millin) in 2013/14 after Kathmandu (Rs. 238.09 million). In comparison to other VDCs of Nepal, the internal income of VDCs of Rupandehi seemed satisfactory. Key Words: Resources, local tax, revenue sharing, grant, internal income, natural resources utilization uax, local bodies. 1. Introduction in central government's grants. LBs (DDCs, VDCs Resources are the input that the organization and municipalities) in Nepal have been given a certain can either convert into products or services, or into degree of fiscal autonomy to LBs. Out of the total increasing its own capabilities (Axin, 1978). Resource revenue mobilization, the central government collects is an important component to uplift the socio economic 96 percent whereas LGs mobilize only four percent. condition of people. Availability of resources may be The incomes and expenditures of LGs in comparison different in different part of the world; however, in to National GDP are very low and rising at a very slow any forms or types it is available everywhere at local pace. Expenditure of LGs in relation to national GDP level. Particular types of resources may available in ranges between 1.99 percent to 2.40 and the revenue particular place, such particular resource needs to less than four percent during 2006/07 to 2010/11. The utilize by combining with other resources in appropriate sources of income of LBs house tax, land tax, vehicle proportion to produce something otherwise it may be tax, Haat Bazaar tax, advertisement tax, entertainment idle. Production of something can enhance the socio tax as tax sources and services charges and fees, income economic condition of the people, because idle resource from sales of natural resources and from loan. But, does not possess utility. The identification and this is not adequate to perform assigned responsibilities. utilization of available resources in appropriate The definitions of the base and rate with a few proportion is a greater challenge. Fiscal decentralization exceptions are given in the law. In most cases, rate in Nepal is considered to be low. The share of LBs caps are prescribed by the central government. In all revenue and expenditure in GDP is very low in these cases, the base is defined in the law. This is the comparison to central government's revenue and evident of low fiscal decentralization in Nepal. In the expenditure. DDCs and VDCs are more dependants context of internal revenue mobilization, Municipalities *Lecturer, Department of Economics, Butwal Multiple Campus, Butwal 34 are relatively better off position than DDCs and VDCs. was seven electoral constituencies. In order to represent Municipalities also borrow money from outside while the district well, seven VDCs were selected which DDCs and VDCs don't. represent one from each constituency. The studied LBs' total expenditure was Rs. 7505250 VDCs are Chhipagad, Padisari, Farsatikar, Motipur, thousand in 2002/03 which reached at Rs. 31326940 Saljhandi, Gonaha and Sipawa. thousand in 2013/14, more than four folds increase. 4. Village Development Committees's The income reached at Rs. 35862950 thousand in Resources Mobilization Situation in National 2013/14 from Rs. 5914090 thousand in 2002/03, an Level increase of six folds. Average annual growth rate of In Nepal, LSGA has provided VDCs with LB's total income was 20 percent during this period; revenue mobilization authorities. The local income of however, the OSR has not been increased as expected VDCs consists of 10 taxes such as house and land tax, (LBFC, 2014). land revenue, temporary weekly bazaar, shop tax, 2. Objective of the Study vehicle tax, entertainment tax, rent and tenancy tax, The objective of this article is to categorize the advertisement tax, business tax, and commercial video situation of local revenue mobilization patterns of tax. The non tax sources include service fees, charges, village development committee in national level and penalty, etc. to compare the situation of Rupandehi's village The total income of VDCs was Rs. 8267850 development committee with national level for local thousand in 2008/09 which increased to Rs. 9872361 revenue mobilization. thousand in 2010/11. The highest amount was Rs. 3. Methodology 10136673 thousand in 2012/13 while it is Rs. 9512241 This article is based on quantitative in nature thousand in 2013/14. Grant is the major source of and the descriptive research design was adopted to income of VDCs. More than 90 percent of the VDCs meet the objectives. Descriptive research describes income comes from the grant while less than 10 percent and interprets the conditions or a relationship that exits is mobilized from internal sources. The share was in certain situation. Secondary data were only utilized about 95 percent in 2008/09 which decreased to 86 in this article. percent in 2013/14 (LBFC,2014). Internal income of Rupandehi district has forty nine village VDCs is presented in the table below. development committees and six municipalities. It Table 1: Descriptive Statistics of Internal Income of VDCs (in thousands) FY N Minimum Maximum Sum Mean Std. Deviation 2008/09 73 35 106888 438500 6006.85 14981.338 2009/10 75 60 138088 710643 9475.24 22020.458 2010/11 75 271 138636 904016 12053.55 23424.779 2011/12 75 389 179107 976493 13019.91 25752.721 2012/13 75 447 223884 1171322 15617.63 32296.912 2013/14 75 864 238090 1302241 17363.21 34784.804 Valid N (listwise)73 Source: LBFC (2009, 2010, 2013 & 2014) 35 Table 1 provides statistics of internal revenue Okhaldhunga had 0.04 percent of total income in of VDCs of Nepal. Internal income of VDCs was Rs. 2008/09, VDCs of 32 districts in 2008/09, 33 districts 438500 thousand in 2008/09 which reached at Rs. in 2009/10, 20 district in 2010/11, 6 district in 2011/12, 1302241 thousand in 2013/14. The minimum internal 5 district in 2012/13 (Khotang, Baitadi, Bajura, Rolpa, income was Rs. 35 thousand in 2008/09 and increased Rukum), one (Rukum) in 2013/14 had internal income to Rs. 864 thousand in 2013/14. VDCs of Manang less than one percent of their total income. VDCs of district had lowest average internal income of Rs. 35 Jajarkot, Khotang, Okhaldhunga, Kalikot, Baitadi, thousand in 2008/09 while the lowest internal income Bajura, Rolpa and Rukum are in the bottom while was Rs. 864 thousand for VDCs of Rukum in 2013/14. Kathmandu, Bhaktapur, Lalitpur, Rupandehi, Jhapa, The internal source mobilization of VDCs is meager. Morang, Kaski, Makawanpur and Dhading are in the Very few VDCs are able to mobilize internal sources top. VDCs of less than eight districts have internal of one third of their total income. VDCs of income above 25 percent of the total income. Table 2: Descriptive Statistics of Share of Internal Income in Total Income, Percent FY N Minimum Maximum Mean Std. Deviation 2008/09 73 .04 47.35 4.592 9.290 2009/10 75 .04 53.74 5.883 11.215 2010/11 75 .30 50.49 7.302 11.348 2011/12 75 .43 57.78 8.477 11.899 2012/13 75 .47 63.55 9.405 13.220 2013/14 75 .61 65.49 10.615 13.471 Valid N (listwise)73 Source: LBFC (2009, 2010, 2013 & 2014) Table 2 provides statistics of share of internal percent), Taplejung (0.94 percent), Jajarkot (0.94 income in total income of VDCs of Nepal. Minimum percent) and Okhaldhunga (0.98 percent). share of internal income of VDCs was 0.04 percent Top ten districts having high share of internal income in FY 2008/09 which reached at 0.61 percent in in total income of VDCs are Kathmandu (56.60 FY2013/14. Maximum share of internal income of percent), Bhaktapur (48.24 percent), Lalitpur (41.59 VDCs was 47.35 percent in FY 2008/09 which reached percent), Rupandehi (39.24 percent), Jhapa (37.43 to 65.49 percent in FY 2013/14. Mean share of internal percent), Dhading (36.31 percent), Morang (26.21 income of VDCs was 4.592 percent in FY 2008/09 percent), Chitawan (21.11 percent), Makawanpur which reached at 10.615 percent in FY2013/14. There (20.82 percent) and Kaski (20.30 percent) (LBFC, is high variation on average share of internal income 2014). in total income of VDCs. The maximum share is 58.21 5. Rupandehi's Village Development percent while minimum is 0.37 percent during 2009/10- Committees Resources Mobilization Situation 2013/14. The mean share is 8.34 percent. Before analyzing the income and expenditure The VDCs of 57 districts have very low internal of sample VDCs of Rupandehi, researcher first briefly income. The share of internal income in total income analyzed the income and expenditure situation of all is less than mean share. Similarly, VDCs of ten districts VDCs of Nepal and all VDCs of Rupandehi district. have less than one percent. These districts include In 2013/14 the total income and expenditure of all Baitadi (0.53 percent), Khotang (0.53 percent), Rukum VDCs of Nepal was Rs. 9512.24 million and Rs. (0.61 percent), Rolpa (0.63 percent), Bajura (0.75 9340.69 million respectively.
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