In June, Nepal's provinces announced the fiscal year 2080-2081 budget allocations. The process aimed to ensure the equitable distribution of financial resources for balanced development within the federal system. Different provinces had varying priorities, with Koshi, Sudurpaschim, and Bagmati focusing on key sectors. However, Lumbini faced criticism, and Gandaki raised concerns over reduced funding in critical areas. Additionally, a political crisis occurred in Koshi Province, leading to the removal of Chief Minister Hikmat Kumar Karki due to a failed vote of confidence.

Timeline of Major Events

 

Date	Event
June 15	Koshi and Lumbini Province unveiled their budget plan.
June 16	The governments of Karnali, Madhesh, and Sudurpaschim Provinces allocated a budget.
June 17	Gandaki and Bagmati  Province released their budget proposal.
June 26	Kathmandu Metropolitan City (KMC) announced a budget of Rs 25.54 billion.
June 29	Koshi Chief Minister Hikmat Kumar Karki requested a vote of confidence.
June 30	Koshi Chief Minister Hikmat Kumar Karki faced a vote of confidence and lost.

 

Overview of Budget Allocations in Nepal's Provinces:

Fiscal Year 2080-2081

The fiscal year 2080-2081 Nepal witnessed the announcement of provincial budget allocations. During this period, meticulous discussions and planning took place to ensure equitable distribution of financial resources across the regions. This process is vital in promoting balanced development and fairness within the federal system. The significance of June cannot be overstated, as it serves as a crucial time for making well-informed financial decisions that will shape the future progress and prosperity of the provinces.

Examining the budget allocations, Koshi Province allocated 36 billion rupees, focusing on agriculture, industry, and infrastructure sectors. However, the budget announcement in Lumbini Province faced criticism, despite setting aside over 40.95 billion rupees. Karnali Province emphasized capital expenditures by allocating 33.38 billion rupees, while Madhesh Province had to work with a reduced budget while prioritizing critical sectors.  Sudurpaschim Province projected a budget of 36.746 billion rupees, striking a balance between capital and recurrent expenses. Gandaki Province's budget of 33.42 billion rupees targeted vital sectors, but concerns arose regarding reduced funding in agriculture and health. Lastly, Bagmati Province stood out with a substantial budget of over 62.70 billion rupees, demonstrating a focus on environmental sustainability and public services.

Overall, these budget allocations reflect the diverse priorities of the provinces and their efforts to address developmental needs. However, critical analysis is required to ensure that the allocated funds effectively meet the intended goals and that concerns such as funding reductions in crucial sectors are adequately addressed.

Political Crisis and Leadership

Change in Koshi Province

The political landscape in Koshi Province underwent a crisis when Chief Minister Hikmat Kumar Karki sought a vote of confidence from opposition parties on June 29. However, his leadership was put in jeopardy as he failed to secure enough support from the Provincial Assembly on June 30, with only 46 out of 93 assembly members voting in favor of Karki from the UML party.

Despite his attempts to form an inclusive all-party government, Karki's efforts ultimately proved unsuccessful. Consequently, he was removed from office, leading to the initiation of establishing a new government in the Koshi region.
The core of the political crisis revolves around Chief Minister Karki's recommendation for a special session of the provincial assembly to hold a vote of confidence. The departure of the CPN (Maoist Center) and Janata Samajwadi Party (JSP) from the government left Karki's administration in the minority. Nevertheless, he went ahead and presented the provincial budget through an ordinance. A special session was called to comply with the requirement of giving the budget ordinance before the vote of confidence. This series of events has resulted in a leadership change in the province, putting Karki's position at risk.