June Analysis: Federal Affairs


Manipulating the Budget for Party Politics

Timeline of Major Events in June

June 6Karnali Pradesh expands the cabinet.
June 6Chief Minister Province 2 expels four ministers of the Thakur-Mahato faction
June 8Sudurpaschim Pradesh Chief Minister Trilochan Bhatta wins the vote of confidence from the provincial parliament.
June 9Province 2 expands the cabinet by adding three ministers from NC.
June 10Gandaki Pradesh CM Prithvi Subba Gurung loses the vote of confidence in the provincial legislature.
June 15Provincial government presents a budget.
June 18The Chief Minister of Gandaki Pradesh wins the vote of confidence in the provincial legislature.

The three tiers of government—Federal, provincial, and local have already presented the budget for the next fiscal year 2021/22. As per the constitution, the federal government announces the budget on the 15th day of the Nepali calendar month of Jeshta (June 29 this year), while, the provincial government announces the budget on the first day of the Nepali calendar month of Asadh (June 15), and local government within the 10th day of the Nepali calendar month of Asadh (June 24). Where the Federal government presented their budget of Rs 1.647 trillion and the provincial government, Rs 261 billion. Several local governments have been unable to present their budget for the next fiscal year in time

Criticism in the Provincial Budget

National budgets usually bring forth criticisms, which helps improve the budget implementation for the future. However, this year provincial government have crossed all the line and rendered budget useless. For example, Province 1 has allocated Rs 10 million to make Statesman’s Park, similarly, Province 2 has allocated 60 million to make statues and 10 million for a memorial park, while Bagmati Pradesh has allocated several budgets targeted to develop Ayodhayapuri in Chitwan. Similarly, Sudurpaschim Pradesh has also allocated Rs 190 million for the painting of the provincial assembly building. However, in a dire condition brought forth by COVID-19, creating jobs, relief packages and other prior sectors seem to be ignored in the budgetary planning of the provinces.

The budget that the provincial assemblies finalized was highly criticized even by the ruling party. This gives an isolated meaning, since normally, party demonstration support to any type policies and programs as long as the planners are within the party.

Criticism of local budget 

Several local governments have been unable to present the budget in a timely manner. According to the National Association of Rural Municipality’s data, 70 local governments are unable to present their budget while the Ministry of Federal Affairs and General Administration shows that 458 local governments including Lalitpur Metropolitan City have been unable to present the budget in time. This indicates that the local governments are not serious regarding their responsibilities in budget.

Besides, budget preparation, infrastructure development and other local services are interrelated. Thus, when budget is delivered in time, development and local services can get accelerated. Local governments are also deprived of federal and provincial governments’ grants if they fail to present their income and expenditure in time. Which in turn affects all sectors of development, administration, services, and others within the local government.  


Overall, the three tiers of government’s budget presentation signals that the lawmakers have drafted the budget in their interest – neither of the people nor proportional development. Such a budget allocation process is in favor of the constituency area of a certain group of leaders, which is harmful to the development and federalism. Nonetheless, MPs in the Province 2 are still demanding to hike the amount of the Parliamentary Development Fund. Such a fund opens path for the leader’s interest and further criticism.

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