News Digest: Federal Affairs (May 27-2 June, 2021)


Budget Issues

Finance Minister Bishnu Prasad Paudel presented a budget of Rs 1.67 trillion on May 29 through ordinance for the fiscal year (FY) 2021/22, which is 12% bigger than the ongoing FY 2020/21. Out of the total budget, the government has allocated Rs 678.61 billion (41.2%) for recurrent expenditure, Rs 374.26 billion (22.7%) for capital expenditure, Rs 207.97 (12.6) for financing provision, and the remaining Rs 386.71 (23.5) billion for the provinces and local governments.  

After the all-party meeting’s decision on May 27, the Bagmati Pradesh Chief Bishnu Prasai had summoned a budget session for May 30. The parties summoned the lawmakers for pre-budget discussion for the next FY, and also collected suggestions for the assembly meeting’s further process in such a difficult situation during the pandemic.

Similarly, Gandaki has started pre-budget discussion from May 30 for the next FY 2021/22 budget.

Development Issues

According to the Financial Comptroller General Office (FCGO) report from the last five years, around 40% of the allocated capital expenditure is usually spent in the last month of every FYs. Reportedly the government spent 49% of the capital budget in the last month of the FY 2015/16, 41% in the FY 2016/17 while 39% in the FY 2017/18, 36% in FY 2018/19, and 34.33% in the FY 19/20. Similarly, the government is also likely to spend the capital budget in the last month of the current FY due to lockdown.

Gandaki Pradesh has been able to spend only 36.83% of its budget in ten months of the current FY 2020/21. Similarly, Gandaki has spent only 40.11% of its total capital expenditure however 31.80% recurrent budget. Similarly, Karnali Pradesh has been also able to spend only 21.62% of its budget in ten months.

Province 2 government has bought nine fire engines. Reportedly, the government provides one fire engine each of the eight districts over the province and the remaining one for the Province 2 Police office. Despite criticisms, the provincial government bought fire engines during the Corona period.   

Coronavirus Response 

For the next FY 2021/22, the government has allocated Rs 37.53 billion for the COVID-29 control, which is less than three percent of the total budget. Similarly, the government also allocated an additional Rs 26.75 billion for vaccine procurement.

Kathmandu Metropolitan City (KMC) set up 309 isolation beds and a 35-bed COVID-19 Special Hospital with ICU and ventilator facilities. Similarly, KMC has provided 45 ventilators to nine different hospitals within the Kathmandu Valley.

The cabinet of Karnali Pradesh has repeatedly made decisions for setting up oxygen plants and other health facilities in health but has not been able to implement them so far. Meanwhile, the cabinet was allocated Rs 60.35 million on May 16 to set up oxygen, and on May 24, decided to provide Rs 1.2 million for the provincial hospital but the government is silent to implement their decision in such a pandemic.

Provincial Politics

Chief Minister Trilochan Bhatta has reshuffled his cabinet after three ministers in the cabinet while ruling CPN-UML’s ministers resigned on May 28. Meanwhile, CM Bhatta added five ministers and four ministers of state. Similarly, on May 31, the Provincial Standing Committee of the ruling CPN-UML made a recommendation to expel six UML ministers from the party while they decided to continue support to the government.

Drigha Narayan Pandey was elected to the National Assembly from Lumbini Pradesh, the election was held on May 31. Chandra Bahadur Khadka was the ruling CPN-UML candidate and elected Drigha Narayan Pandey from opposition parties.

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