General Grant Allocation Formula Brief
Subnational governments worldwide are generally mandated with spending responsibilities that cost more than can be financed from revenues they can raise on their own. In response, central governments provide additional funding support from their own budget in the form of fiscal transfers to allow adequate levels of local spending. In 2015-16, as a part of the medium-term fiscal framework reforms, Myanmar introduced a formula-based allocation method to guide grants made by the Union government to state/region governments. This brief on the General Grant Allocation Formula, summarizes how the government of Myanmar makes fiscal transfers and notes resulting issues with equity based on how the formula is currently applied. In response, the author proposes options for reform to the general grant allocations in order to promote equity across states/regions.