A controversial ordinance related to the Political Parties Act facilitated party splits of CPN-UML and JSP. Parliament obstruction by CPN-UML halted government spending for eight days. After the splits, the Political Parties Act ordinance was repealed and the Appropriation Bill was passed.

Timeline of major events

Political Parties Act ordinance and party splits

On August 18, an ordinance was introduced to amend the Political Parties Act-2017. Previously, to split a political party, support of 40 percent in both the central committee and parliamentary party was required. The new ordinance enabled political party splits to occur with 20 percent support in either the central committee or the parliamentary party. Consequently, CPN-UML split, and Madhav Kumar Nepal registered a new party as CPN (Unified Socialist). Similarly, Janata Samajbadi Party (JSP) split and Mahanta Thakur registered a new party as Loktantrik Samajbadi Party (LSP).

Chairman of CPN-UML KP Sharma Oli objected Election Commission’s decision to register a new party under Madhav Kumar Nepal, but the Supreme Court refused to issue an interim order. JSP Chairman Upendra Yadav asserted that the Political Parties bill either to be repealed or amended before Cabinet expansion. On September 27, President Bidya Devi Bhandari repealed the ordinance on Political Parties (Second Amendment)-2078. However, actions taken under the ordinance still stand.

KP Oli’s faction of CPN-UML is against the ordinance and party splits. Lawmaker Devendra Dahal accused the Election Commission of creating a ‘conspiracy to weaken their party.’ Madhav Kumar Nepal’s faction of CPN (Unified Socialist) stood in support of the ordinance, fearing that repealing it may affect their newly registered party. Janata Samajbadi Party (JSP) predicted another split if the ordinance isn’t repealed, so they demanded repealing the ordinance as a pre-condition for Cabinet expansion. Cabinet expansion has been delayed for over two months since Deuba became Prime Minister. Repealing the ordinance after its purpose was served (inducing party splits) may be a political maneuver.

Parliament obstruction by CPN-UML and ‘budget holiday’

The former CPN (UML) led government under KP Oli introduced an ordinance on the Budget for the current fiscal year on May 29 and presented it in the federal parliament on July 19. The ordinance needed to be passed by September 15, within 60 days. KP Oli was removed as Prime Minister and replaced by Sher Bahadur Deuba. On September 10, the new government brought a Bill to replace the ordinance budget.

CPN-UML members obstructed the parliament in protest on September 15. Since Speaker Agni Sapkota required all parties’ support to endorse the Bill, it didn’t pass by the required deadline of September 15 and a ‘budget holiday’ was created, i.e., government spending was halted. CPN-UML obstructed the parliament because they had recommended removing 14 of their House of Representatives members, accusing them of colluding with Madhav Kumar Nepal’s faction and conspiring to split the party, however, Speaker Agni Sapkota, on August 29, cancelled this recommendation. CPN-UML chair KP Sharma Oli filed cases against Sapkota and the Election Commission, but the Supreme Court refused to issue an interim order against those charged. However, President Bidya Devi Bhandari authenticated the Appropriation Bill-2021 on September 23, ending the ‘budget holiday’ and resuming government spending.

CPN-UML’s KP Oli had introduced the Budget ordinance on May 29 and presented it to the federal parliament on July 19 when he was the Prime Minister. Now that CPN-UML has become the opposition party to Sher Bahadur Deuba’s Congress led government, and Speaker Sapkota denied their request of expelling 14 allegedly defecting lawmakers. This led UPN-UML to obstruct the parliament. This shows that their motive for parliament obstruction was political rather than the content of the budget. Madhav Kumar Nepal and Jhala Nath Khanal were also among the 14 recommended by CPN-UML to be expelled. However, Agni Sapkota, as the House Speaker, has the authority to cancel this recommendation. The failure of the Bill to replace the Budget ordinance caused, for the first time in Nepal’s history, a ‘budget holiday’. This scenario can be described as a case of domestic political rivalry causing delays in parliamentary procedure.

Hearings on constitutional appointments in limbo

The judiciary was rocked by allegations that the Chief Justice failed to ensure separation of powers and avoid conflicts of interests. A debate arose about whether the Chief Justice needs to be present in the Constitutional Bench. On September 2, Justice Hari Phuyal issued an interim order demanding this debate to be settled, however, this issue has not been resolved. Hearings on cases against constitutional appointments are in limbo because of this unresolved issue.