Expenditure and Revenue Pattern of Damak Municipality of Jhapa
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EXPENDITURE AND REVENUE REVENUE AND OFPATTERN DAMAK MUNICIPALITY EXPENDITURE EXPENDITURE AND REVENUE PATTERN OF DAMAK MUNICIPALITY OF JHAPA A Thesis Submitted to the Central Department of Economics Faculty of Humanities and Social Sciences, Tribhuvan University, Kirtipur, Kathmandu, Nepal in the Partial Fulfillment of the Requirements for the Degree of MASTER OF ARTS in OF JHAPA ECONOMICS OM PRAKASH KAFLEOM PRAKASH By OM PRAKASH KAFLE Roll No. 131/066 Regd. No. 5-1-8-121-2002 Central Department of Economics Tribhuvan University, Kirtipur Kathmandu, Nepal November 2016 2016 LETTER OF RECOMMENDATION The thesis entitled Expenditure and Revenue Pattern of Damak Municipality has prepared by Om Prakash Kafle under my supervision. I hereby recommended this thesis for examination by the thesis committee as a partial fulfillment of the requirement for the Degree of Master of Arts in Economics I forward it with recommendation for approval Thesis Supervisor ________________________ Dr.Yogesh Ranjit Associate Professor Central Department of Economics Tribhuvan University, Kirtipur, Kathmandu Date: 2073/ 09/ 13 2 APPROVAL SHEET We clarify that this thesis entitled Expenditure and Revenue Pattern of Damak Municipality, Jhapa submitted by Om Prakash Kafle to the central department of economics, faculty of humanities and social sciences, Tribhuvan University, in partial fulfillment of the requirement for the degree of Master of Arts in Economics has been founded satisfactory in scope and quality. Therefore, we accept this thesis as a part of the said degree. Thesis committee …………….………………………………………. Prof. Dr. Ram Prasad Gyanwaly Head Thesis Committee ………..……………………………………………… Tara Prasad Bhusal Associate professor, Central Department of Economics. External Examiner ………………………………………………………. Dr. YogeshRanjit Associate professor, Central Department of economics. Thesis Supervisor Date: 2073 / 09 / 13 (2016 – 12 - 28 ) 3 ACKNOWLEDGMENTS It is my great opportunity to complete this thesis under the supervision of Dr. YogeshRanjit, Associate Professor, Central Department of Economics, Kirtipur, Tribhuvan Universityfor generous support of my entire research work. This form of research is the outcome of his continuous suggestion and valuable comments. I consider myself fortunate enough to have an opportunity to express any sincerest gratitude to him. I am grateful to Prof. Dr. Ram Prasad Gyanwaly, Head of Central Department of Economics, Tribhuvan University, Likewise, I am grateful to my all faculty members of Central Department of Economics who have helped me directly or indirectly in the course of writing thesis. I am also thankful to the all staff of Damak municipality for providing me all required data and information related to the study. I would like to dedicate this thesis to my respected father MrHari Prasad Kafle, respected mother Puspa Maya Kafle and my lovely brother MrBipinKafle for their continuous help and encouragement. Without their supports I would never have reached this academic level. Om PrakashKafle Date 2073/09/13 4 TABLE OF CONTENTS Pages Recommendation Letter i Approval Sheet ii Acknowledgment iii Table of Contents iv List of Tables vii List of Figures viii List of Acronyms ix CHAPTER - I: INTRODUCTION 1 - 5 1.1 Background of the Study 1 1.2 Statement of Problem 3 1.3 Objectives of Study 4 1.4 Significance of Study 4 1.5 Limitations of the Study 5 1.6 Organization of the Study 5 CHAPTER - II: REVIEW OF LITERATURE 6-17 2.1 Concept of Municipality 7 2.2 History of Municipality System in Various Part of the World 7 2.3 Empirical Reviews 8 CHAPTER - III: RESEARCH METHODOLOGY 18-20 3.1 Research design 18 3.2 Nature and sources of data 18 3.3 Study Periods Covered 19 3.4 Data collection procedure 19 3.5 Data Organization, Management and Processing 19 3.6 Tools and Technique of Data analysis and interpretation 20 5 CHAPTER - IV: HISTORY OF MUNICIPAL SYSTEM IN NEPAL 21-24 CHAPTER - V: PRESENTATION AND ANALYSIS OF DATA 25-50 5.1 General introduction of the study area 25-28 5.1.1 Population 26 5.1.2 Education 26 5.1.3 Occupation 27 5.1.4 Ethnic composition 27 5.1.5 Health and services 27 5.1.6 Drinking water 28 5.2 Trend and Pattern of Expenditure of Damak Municipality 28-36 5.2.1 Trend of Expenditure 29 5.2.2 Pattern of Expenditure 32 5.2.2.1 Regular Expenditure 34 5.2.2.2 Development Expenditure 35 5.2.2.3 Growth rate of Regular and Development Expenditure 36 5.3 Trend and Sources of Revenue of Damak Municipality 37-48 5.3.1 Trend of Revenue 38 5.3.2 Sources of Revenue 40 5.3.2.1 Internal Source of Revenue 44 5.3.2.2 External sources of Revenue 46 5.3.2.3 The Growth Rate of Internal and External Source of Revenue 48 5.4 Resource Gap 49-50 CHAPTER - VI: MAJOR FINDINGS, CONCLUSION AND RECOMMENDATIONS 51-54 6.1 Major Findings 51 6.2 Conclusions 54 6.3 Recommendations 54 6 REFERRENCES 55-56 APPENDICES 57-61 APPENDIX – I 57 APPENDIX - II 58 APPENDIX - III 60 7 LIST OF TABLES Tables No Title Page No 5.1 Level of Schools in Damak Municipality 26 5.2 Occupational Distribution in Damak Municipality 27 5.3 Trend of Total Expenditure and Growth Rate 29 5.4 Pattern of Expenditure 32 5.5 Trend of Regular Expenditure 34 5.6 Trend of Development Expenditure 35 5.7 Growth Rate of Regular and Development Expenditure 36 5.8 Trend of Total Revenue 38 5.9 Sources of Revenues 42 5.10 Trend Internal Sources of Revenue 44 5.11 Trend of External Sources of Revenue 46 5.12 Trend of Resource Gap 49 8 LIST OF FIGURES Figures No. Title Page No 5.1 Trend of Total Expenditure 30 5.2 Growth Rate of Total Expenditure 31 5.3 Pattern of Total Expenditure 33 5.4 Growth Rate of Regular and Development Expenditure 37 5.5 Trend of Total Revenue 39 5.6 Growth Rate of Total Revenue 40 5.7 Trend of Sources of Revenue 43 5.8 Trend of Internal Sources of Revenue 45 5.9 Trend of External Sources of Revenue 47 5.10 Growth Rate of Internal and External Sources of Revenue 48 5.11 Trend of Resource Gap 50 9 ACRONYMS CBS Central Bureau of Statistics DDC District Development Committee FY Fiscal Year MoLD Ministry of Local Development GoN Government of Nepal TDF Town Development Fund TU Tribhuvan University VDC Village Development Committee MIG Municipal Infrastructure Grants 10 CHAPTER - I INTRODUCTION 1.1 Background of the Study Local government is a form of public administration in which a majority of context exists as a lowest tire of administration within a given state. The term is used to contrast with offices at state level, which is referred to as the central government or federal government which deals with governing institution between states. Local government generally acts with in power delegated to them by legislation of the government. In federal state, local government generally comprises the third tire of government. Although the concept of local governance is as old as history, recently it has entered in to the broad academic discourse. Globalization and information revolution are forcing a re-examination of citizen, state relation and the relationship of various orders of government with entities beyond government and there by an enhanced focus on local governance. The concept, however has yet to be embraced fully by the literature of development economics, because of the long standing tradition in the development assistance community of focusing on either local government or community organization while neglecting the overall institutional environment that facilitate or retards interconnectivity cooperation, or competition among organization, groups, forms, and networks that serve public interest at the local level (World Bank, 2002). The question of municipality autonomy is a key question of public administration and governance. The institutions of local government vary greatly between countries and even where similar arrangement exists. The terminology often varies the common names of local government entities includes state, district, municipality, and villages etc. Nepal has adopted the decentralized system of governance under three distinct phases. The first phase (1960-1990) was a 'transition phase', which included the articulation of a formal decentralization policy framework in 1962 and the enactment of the Decentralization Act in 1982 and its Regulations in 1984. The second phase (1990-2006) began with the restoration of multi- party democracy in 1990, followed by three local government Acts enacted in 1991, local democratic elections in 1992 and in 1997, and the initiation of a fiscal transfer system from 1993. The local government system was consolidated through the enactment of the Local Self- 11 Governance Act (LSGA) in 1999. The third phase (2006-onwards) includes a period of post- conflict transition, April uprising (Jana Andolan-II-2006), and conduct of the Constituent Assembly (CA) elections in 2008 and in 2013 to pave the way for the promulgation of a new federal constitution. (The Rising Nepal, 2015) Nepal has two-tier system of local governance, with village and municipal bodies as the lower tier and district bodies as the higher. The village bodies are called Village Development Committees with municipalities serving the same function in town areas. The district bodies are the District Development Committees. The current structure of local governance in Nepal was put in place after the restoration of democracy in 1990 and the current functions, duties, and power of the Local Governance is in effect after promulgation of Local Self Governance Act in 1999. All VDCs are divided into nine wards. Municipalities are divided into a minimum of nine wards but the maximum number is not specified. Wards are the smallest units of local governance. Each ward has a ward committee made up of the five elected members, one of which must be a woman.