September Analysis: Federal Affairs


The political disagreements occurring in the central government since the last six months have affected provincial and local levels. Consequently, parliamentary, economic, and federal practices have been affected. Now, Province 1 and Bagmati Province have been affected the most due to the possible change of its government.

Timeline of major events in September

7 SeptemberSudurpaschim Province has started formulating the first five-year periodic plan.
8 SeptemberBagmati Province Chief Minister Asta Laxmi Shakya expanded the cabinet.
8 SeptemberAll local government has stated online payment bill system.
13 SeptemberThe Minister for Law, Communication, and Provincial Assembly Affairs of Gandaki Province tabled a mass media bill.
14 SeptemberAfter two months long obstruction, Gandaki Province organized Provincial Assembly meeting.
16 SeptemberOpposition CPN-UML in Lumbini Province obstructed Assembly meeting.
28 SeptemberProvince 2 CM Lalbabur Raut has finalized date for seeking a vote confidence on October 6.
 The commission for Investigation of Abuse of Authority (CIAA) has raided the office of Province 2 CM Lal Babu Raut.

Provinces 1 and Bagmati – The Minorities

The two remaining Chief Ministers (CMs) namely Bhim Acharya in Province 1 and Asta Laxmi Shakya in Bagmati of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) led by K.P. Oli government are now a minority. While on 13 September, the newly-formed CPN-Unified Socialist (CPN-US)-led by Madhav Kumar Nepal official withdraw its support to the K.P. Oli government. CPN-UML split into two, while the Madhav Kumar Nepal faction formed a new party on August 18.

As per the provision in the Constitution, Article 188 (2), a CM must take a vote of confidence within one month when the ruling party split. As CM of Province 2, Lalbabu Raut also needs to take a vote of confidence as on September 18, Janata Samajbati Party (JSP) also split into two; the group of Mahantha Thakur registered a new party as Janata Samajbadi Party Nepal (Loktantrik). Previously, JSP had a single ruling party in Province 2. Now there is a collation government with JSP, Nepali Congress, and Maoist Center. On September 29, CM Raut finalized the date for taking vote of confidence on October 6.

Previously, except of Province 2, CPN-UML had an almost two-thirds majority and was ruling in the federal and four provinces – namely Province 1, Bagmati, Gandaki, and Lumbini Provinces including two collation governments in Karnali and Sudurpaschim Provinces. Now, due to internal political strife, two CMs of Gandaki and Lumbini have already lost their positions. And the remaining two CMs of Province 1 and Bagmati from CPN-UML are also likely to lose their positions.

Formation of the Periodic Plan Delayed

The political disagreement of the center has also affected the provincial governments. While six provinces have already formulated their period plans one year ago, Sudurpaschim falls behind. The Provincial Policy and Planning Commission, Sudurpaschim has estimated to take another six months in completing the plan; the commission took three months in hiring staff.

This has delayed the developmental process of the province and concerned local levels. Like all provinces, Sudurpaschim has also completed its four years under a stable government, with just one year remaining to complete its five-year tenure. It is deplorable to see that it may still take six more months to complete a periodic plan that was intended to cover its five years of tenure.

Lack of implementation in Federal Civil Service Bill

The political strife at the center seems to have affected the country’s administration and service delivery. After a long obstruction, the Federal Civil Service Bill was passed on September 29, 2020; however, the implementation of it is yet to be seen. Due to its lack of operation, there has been an obstruction in the transfer and promotion of employees at the federal, provincial, and local level. The bill was not passed due to the continued obstruction of the parliament from the political parties. According to the Ministry of Federal Affairs and General Administration, more than a thousand application letters have been submitted for transfer, but has not been acted upon and affected to the staff adjustment in all level of governments. Such delayed implementation of the required act is hampering the pensions of employees, service facilities, departmental punishment, and acceptance of resignations.

Effort on Capital Budget Expenditure  

On September 22, the newly appointed Finance Minister Janardan Sharma announced to mobilize at least 10 percent of the capital budget, each month. According to the report published by the Financial Comptroller General Office (FCGO), Sher Bahadur Deuba-led administration had spent only 0.6 percent of the total capital budget in the first two months of the current Fiscal Year (FY) 2021-22 due to the budget holiday in 2nd week of September. This is the first time the country faced a budget holiday after Nepal adopted the federal system while the recent government failed to receive parliament’s approval through a substitution bill within 60 days.

Chief Justice Shrikrishna Subedi handed over the fiscal year (2077/78) report to the Lumbini Chief, Amik Sherchan. Photo: RSS

As per rule, the recognition of the ordinance must be passed by each assembly (Federal Parliament Assembly or National Assembly). On September 23, the National Assembly endorsed the replacement appropriation bill and then the government spent Nrs. 24.35 billion within the last week of September.

Moreover, minister Sharma is taking efforts for implementing the budget effectively. Recently, Minister Sharma organized a high-level discussion with the secretaries of the ministries on September 27, and directed to prepare a work-plan within a week for effectively implementing the capital budget. The work plan’s effectiveness is yet to be seen, however, all three tiers of government have been often criticized for lack of implementation despite excellent plans/policies on paper.

Frequent political commotions coupled with actions of central government has led to disturbances in all levels of governments and its sectors – economic and development activities, administration, and federalism implementation. The center political turmoil from the last six months has still not settled, and Province 1 and Bagmati still face its ripple. Inefficiency and delays may cause citizens to again lose hope from the new government.

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