(1) In order to distribute royalties from natural resources between the Government of Nepal, provinces and local levels according to the federal law, the Government of Nepal shall set up a federal separate fund and deposit the amount received from such royalties into that fund.
(2) The distribution of royalties in the fund as per sub-section (1) shall be done annually by the Government of Nepal as per schedule-4.
(3) Out of the amount distributed according to subsection (2), the amount received by the Government of Nepal shall be deposited in the federal reserve fund, the amount received by the province in the respective provincial reserve fund and the amount received by the local level in the respective local reserve fund.