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Nepal development regions

Nepal is in a transitional process nowadays. The country is about to be reorganized in different sub-national levels of government. According to our calculations, important disparities exist both among development regions and among district development committees (DDC) in terms of contribution to the government revenue and expenditures.

At this moment, Nepal is officially divided into five development regions, 14 administrative zones and 75 districts development committees (DDC) themselves subdivided into local governments, which are the municipalities and the village development committees (GURUNG H., Nepal: Atlas and statistics, 2006). This research note aims to define what the intrinsic ability of the development regions and the DDC’s to generate revenue is. Could they have sufficient resources to support their own expenditures thanks to the revenue that they can generate?

In order to answer these questions, data were extracted from the consolidated financial statements of the fiscal year 2011–2012, published by the government of Nepal. This report gives the amount of money earned and spent by the Nepalese government that can be attributed to each territory. The central development region generates 79.49 % of the government revenue and 59.26 % of the expenditures are dedicated to this area. At the DDC’s level, Kathmandu and Parsa are the sources of 54.60 % of the total government revenue. Kathmandu is the target of 42.29 % of the government expenditures. Even if Parsa is an important source of revenue, the government spends only 0.99 % of its money for it. Consequently, it is clear that some implicit transfers exist between the districts in Nepal.

To draw some comparisons, both total revenue and expenditures were divided by the population census for June 2011 (central Bureau of Statistics, National population and housing census, 2012).