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The government has allocated Rs 1bn to Budhigandaki Jalbidhyut Company Ltd (BJCL). Of this amount, the project has received Rs 400m so far. However, the company has been unable to pay its employees’ salaries for the past year.

The company was incorporated in mid-Aug 2022 and started operations in mid-July 2023. Since it has only been authorized to make capital expenditures, it hasn’t been able to cover its recurrent expenses. Jagat Shrestha, the CEO of BJCL, explained that the company hasn’t been able to pay salaries because it hasn’t been allocated a recurrent budget for the current fiscal year. “Since there is no budget heading for salaries, we cannot transfer funds from other headings to pay our employees,” he added.

Before BJCL was incorporated, all activities related to the hydropower project were managed by a project office under the Ministry of Energy, Water Resources, and Irrigation. Following the construction of the 456-MW Upper Tamakoshi Hydropower Project with domestic investment, the government decided to implement the Budhigandaki project using domestic resources. Consequently, BJCL was established. After the project unit was dissolved, the operational expenditure heading in the budget was inadvertently omitted, Shrestha noted. He assured that the employees’ pending salaries and other administrative liabilities for the current fiscal year would be settled after reconciling the financial accounts in the upcoming fiscal year.

The 1,200 MW Budhi Gandaki project is located in the Gorkha and Dhading districts. The land acquisition and compensation process for areas affected by the project is currently ongoing. This fiscal year, the plan includes distributing compensation to people whose names are missing from the official land acquisition records. According to Shrestha, Rs 100m is needed for this purpose. Additionally, Rs 60m is required for people who have land plots in the field book but lack a land registration certificate.

The project was first identified 45 years ago when Snowy Mountain Engineering recommended a 300 MW project. The feasibility study was conducted in the mid-1980s.

During the tenure of Prime Minister Dr Baburam Bhattarai (Aug 2011 to March 2013), the government adopted a policy to build a reservoir project in each of the five development regions. Due to its proximity to Kathmandu, the government initiated the development of a reservoir-based hydropower project on the Budhigandaki River.

Tractebel Engineering of France prepared a detailed project report (DPR) about a decade ago. The DPR proposed constructing a 263-meter dam two kilometers upstream of the confluence of the Trishuli and Budhigandaki Rivers. The dam will create a 63 sq km reservoir covering 9,630 hectares.

The reservoir will submerge 2,566 hectares of cultivable land, 2,403 hectares of forest areas, and 1,300 hectares of rivers, cliffs, and religious sites. The project will displace a total of 8,117 families. The government has already spent Rs 43 billion on the project. The government has achieved 95 percent progress in distributing compensation to the affected families.

The gold is being traded at Rs 142, 200 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, tejabi gold is being traded at Rs 141, 500 per tola.

Similarly, the silver is being traded at Rs 1,805 per tola today.  

All seven provinces of Nepal have unveiled their fiscal plans for 2024/25, in line with the Intergovernmental Fiscal Arrangement Act 2017. A common theme across these budgets is a heavy reliance on federal grants, with a focus on infrastructure, education, healthcare, agriculture, and tourism.

The combined budgets for Koshi, Madhes, Bagmati, Gandaki, Lumbini, Karnali, and Sudurpaschim provinces total over Rs 278bn.

Koshi: Rs 35.28bn

Koshi Province aims to foster a ‘Clean, Happy, and Prosperous’ region with a budget of Rs 35.28bn. The province’s GDP is projected at Rs 903bn, with a significant rise in per capita income from $934 to $1,336. Electricity generation has increased sharply from 121 MW to 577 MW, ensuring access for 97.7 percent of the population. Priorities include agriculture, infrastructure, urban development, and energy sectors.

Madhes: Rs 43.89bn

Madhes Province has allocated Rs 43.89bn, with Finance Minister Bharat Prasad Sah designating Rs 16bn (36.45 percent) for recurrent expenses and Rs 27.89bn (63.55 percent) for capital expenses. This represents a slight 0.5 percent reduction from the previous year. The budget emphasizes education, health, agriculture, and tourism.

Bagmati: Rs 64.54bn

Bagmati Province’s budget of Rs 64.54bn marks an increase of Rs 1.83bn from the previous year. Economic Affairs and Planning Minister Jagannath Thapaliya allocated Rs 26.1bn (40.44 percent) for current expenditure and Rs 36.93bn (55.23 percent) for capital expenditure. Key sectors include education, healthcare, agriculture, and tourism. Additionally, Rs 1.5bn has been earmarked for fiscal management, and a ‘Skill Year’ program has been initiated.

Gandaki: Rs 32.97bn

Gandaki Province’s budget of Rs 32.97bn includes Rs 13.16bn for recurrent expenses and Rs 19.51bn for capital expenditures. Minister for Economic Affairs and Planning Takraj Gurung highlighted a focus on quality infrastructure, production, employment, social justice, and good governance. The province aims to collect Rs 5.17bn from internal sources and anticipates receiving Rs 7.64bn from federal financial equalization grants, among other sources. It also plans to raise Rs 1.7bn through domestic borrowing.

Lumbini: Rs 38.96bn

Lumbini Province has maintained its budget size at Rs 38.96 bn despite reduced federal grants. Minister for Economic Affairs and Planning Chet Narayan Acharya allocated Rs 11.24bn (28.87 percent) for recurrent expenses and Rs 23.58bn (63.09 percent) for capital expenditure. Funding sources include internal revenue, federal grants, and cash reserves. The province aims to collect Rs 7.51bn from internal revenue and anticipates receiving Rs 12.15bn from revenue sharing from the federal government, among other sources.

Karnali: Rs 31.41bn

Karnali Province has reduced its budget to Rs 31.41bn, with Rs 18.75bn allocated for capital expenditure and Rs 4.83bn for local-level fiscal transfers. Minister for Finance Mahendra KC stated the budget’s goal is to achieve ‘Prosperous Karnali, Happy Karnalis’. Priorities include physical infrastructure, employment programs, and cultural preservation. Notably, Rs 1.16bn has been earmarked for the Chief Minister Employment Program.

Sudurpaschim: Rs 31.62bn

Sudurpaschim Province has presented a budget of Rs 31.62bn, with Rs 11.72bn for current expenditure and Rs 17.53bn for capital expenditure. The budget aims to generate substantial revenue from internal sources and federal distribution, focusing on infrastructure development, education, and healthcare. The province aims to collect Rs 1.6bn from internal revenue and nearly Rs 10bn from revenue distribution.

‘Provinces struggle with budget cuts’

Uma Shankar Prasad, Economist and Member of National Planning Commission

Provinces face budget cuts due to limited internal revenue sources, increasing reliance on federal grants. The provincial budgets have decreased compared to previous years. Ideally, more funds should be allocated to provincial and local levels in a federal system, but in Nepal, the federal budget remains larger. This discrepancy indicates a gap between policy and practice.

‘Challenges in implementation’

Chandra Mani Adhikari, Economist

The budgets of all provinces focus on agriculture, infrastructure, and tourism, aligning with the federal budget. However, both provincial and federal levels face significant implementation challenges. Provinces struggle to increase income as the federal government retains 80 percent of major revenue sources and taxes. Grand slogans and projects are often announced without proper planning. No province has confidently declared they could spend 75 percent of their budget; in the current fiscal year, none have spent even 50 percent.

The Nepal Stock Exchange (NEPSE) plunged by 18. 76 points to close at 2,076. 49 points on Tuesday.

Similarly, the sensitive index dropped by 3. 72 points to close at 367. 20 points.

A total of 9,544,734-unit shares of 318 companies were traded for Rs 4. 05 billion.

Meanwhile, Samaj Laghubittya Bittiya Sanstha Limited (SAMAJ) was the top gainer today with its price surging by 10. 00 percent. Likewise, Manakamana Smart Laghubitta Bittiya Sanstha Limited (MKLB) and Kutheli Bukhari Small Hydropower Limited (KBSH) were the top losers as their price fell by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 3. 29 trillion.