The Ministry of Land Management, Cooperatives, Federal Affairs and General Administration issued the directive on 2083/04/15, reminding local governments of their responsibilities under Section 24(3) of the Local Government Operation Act, 2074. The law requires municipalities and rural municipalities to give priority to plans that contribute directly to economic development and poverty reduction, increase production, improve living standards, raise income and employment, and deliver tangible benefits to citizens.

The ministry also stressed that local plans should be consistent with the policies, goals, objectives, timelines and procedures of the federal and provincial governments, while taking into account cross-cutting concerns such as good governance, environmental protection and climate change. Local governments are expected to use their limited resources in ways that maximize economic, social and infrastructure development and protect the wider public interest.

The circular says complaints and information received through different channels indicate that some local governments have not maintained adequate financial discipline while allocating and implementing budgets. The ministry has therefore instructed all local levels to ensure that budget decisions remain centered on public interest and comply with the Local Government Operation Act, prevailing laws, procedures and established financial-management standards.