July 2021 Analysis: Federal Affairs

Posted by : Phiroj Chaudhary


Date : 2021-08-17

With 37% of the budget spent in the last month of the Fiscal Year – a huge chunk indeed, tendency of Asadhe Bikas does not seem to fall despite three and a half years of local governance. Looking for a political space, Bibeksheel Sajha’s Party President Rabindra Mishra proposed abolishing federalism and calling for a referendum on secularism. Mishra argued that Nepal’s federalism is costly and a danger to territorial integrity. He had been widely criticized for this proposal.

Timeline of major events in July

Date Event
July 1 Sudurpaschim Provincial Assembly passes the provincial tourism bill 2020.
July 2 Lumbini State Minister for Physical Infrastructure Development and Janata Samajwadi Party (JSP) leader Suman Sharma Rayamajhi resigns from his post.
July 2 The Supreme Court orders the reinstatement of four local representatives of Kailali.
July 16 Provinces pass their annual budget through ordinance for the Fiscal Year (FY) 2021/22.
July 23 Gandaki Province Chief Minister (CM) Krishna Chandra Nepali Pokharel makes full cabinet.
July 26 Bibeksheel Nepal Party President Rabindra Mishra proposes the abolition of federalism.
July 28 President Bidya Devi Bhandari replaces governors—Gandaki and Lumbini Pradesh.

Budget through Ordinance

When the opposition parties withdrew support in budget finalization, all seven provinces passed their annual budgets through ordinance for the current Fiscal Year (FY) 2021/22. Despite opposition’s criticism in the budget performance as provincial governments passed the budget without discussion and consent. Interestingly, the ruling parties’ leaders also criticized the budget. The leaders were demanding to amend the budget titles, but the ruling party ignored the opposition’s voice and finalized the budget. This type of budgeting process does not address inclusive development, and is likely going to be misused.

Asadhe Bikas

Asadhe Bikas (when a budget is spent at a large portion at end of the Fiscal Year) was again prioritized in the last FY 2020/21. Reportedly, the government spent a huge budget (37%) in the last month of the Fiscal Year, i.e. Asadh of the Nepali calendar, however, the government spent only 27% of the budget in the first 11 months. This is not new; the government has been giving priority to Asadhe Bikas since long. Asade Bikas is not new in the history of Nepali economy, however, astounding is that, after six years post the commencement of the Constitution of Nepal 2015 and three and a half years since the instigation of the new local government, the tendency of Asadhe Bikas has not died. Corruption is more likely to dominate such a budget expenditure, which directly impacts project implementation and development.

Delay Cabinet Expansion

More than one month after assuming office, Chief Minister (CM) Lalbabu Raut in Province 2 and CM Krishan Chandra Nepali Pokharel in Gandaki Pradesh, respectively, were able to give full shape to their cabinets on July 23 and July 15. But due to the mismatch of power-sharing in both provinces, Janta Samajwadi Party (JSP) in Gandaki Pradesh and Maoist Center (MC) in Province 2 have been dissatisfied with CMs as they ignored the opposition’s demand in the government. Similarly, after more than two weeks of assuming office, Prime Minister (PM) Sher Bahadur Deuba in the federal government is yet to give full shape to his cabinet. Due to the lack of consent among the political parties for power-sharing in the cabinet, has led to the cabinet not being formed yet. This type of administration system again questions political instability.

Abolition of Federalism

The federalism implementation-related issues have emerged now after Bibeksheel Nepal Party President Rabindra Mishra proposed abolishing federalism. This is the personal view on federalism, Mishra said. Mishra argued that Nepal’s federalism is costly and it is a danger to territorial integrity. Mishra is being widely criticized for this proposal. This proposal indirectly supports the monarchy in his imagination in the country which many view to be wrong for Nepal. Experts said politician Mishra wants political space through his unique arguments.


Political domination has been spaced in every sector. The leaders are prioritizing the power-sharing game targeting the coming election. As a result, all levels of government administration are being suffered. The country has not been able to move in the right direction due to poor budget performance, power-sharing games, and political strife.