Submit your Article

Among the 753 local governments, 33—11 municipalities and 22 rural municipalities—have failed to bring their budget for the fiscal year 2023/24 on time. According to Section 71 of the Local Government Operation Act, 2017, local governments are required to present their budget by Asar 10 (June 24/25) and have them passed by the end of Asar (July 15/16). 

On a positive note, Sudurpaschim province, which has 88 local units, has achieved a 100 percent record this year as all units passed their budget on time. In the fiscal years 2022/23 and 2020/21, Gandaki province had also set a perfect record. 

Meanwhile, Madhes province continues to have a poor track record. As the second largest province in terms of local units, Madhes has 136 governments, and 24 of them failed to pass their budgets on time this year. The number of local units missing the budget deadline in Madhes was 34 in 2020/21, 32 in 2021/22, and 28 in 2022/23.

Geeta Devi Mahato, the Vice-chairperson of Chandranagar Rural Municipality in Sarlahi district, Madhes, has accused Chairperson Raj Kumar Mahato of taking unilateral decisions without consulting others, resulting in the budget presentation delay. 

Raj Kumar, on the other hand, points finger at Geeta Devi and her team for the delay, claiming they refused to attend numerous meetings convened to address the issue concerning budget allocation. “They have been boycotting the executive committee and village council meetings without providing any valid reasons,” he says.

Disagreement between municipal heads and their deputies is the main reason behind the delay in budget presentation.  

ApEx reached out to many representatives from the local units that had failed to bring their budget on time, and they all had the same excuse, where mayors or chairpersons blamed their deputies and vice versa.

Four local units in Gandaki province, two in Lumbini and one each in Koshi, Bagmati and Karnali provinces also failed to meet the budget presentation deadline.

Ram Chandra Joshi, mayor of Kushma Municipality, Parbat district of Gandaki province, says that the budget process was obstructed because several ward chairpersons wanted more budget allocations for their areas. “There is no other reason to obstruct the budget presentation process other than to exert political pressure on me.”

Joshi says he lacks a majority in the executive committee and council, but the Local Government Operation Act, 2017 has not imagined a majority or minority provisions for local executives and councils. “Despite being aware of the law, the obstruction from executive committee members prevented us from presenting the budget on time,” adds Joshi.

The Municipal Association of Nepal (MuAN) says that the general public should not suffer due to the power struggles among local representatives. “A law should be passed so that those local units that fail to bring the budget on time are prohibited from spending even a single rupee from the state coffers,” suggests an official from the association.

Currently, the only repercussion faced by municipalities for delayed budget submissions is receiving reduced subsidies from the National Natural Resources and Fiscal Commission. 

“The commission allocates subsidies to local units based on their performance, with timely budget presentation and approval carrying weightage of five points each in the total score of 100 points,” says Gyanendra Paudel, the spokesperson for the commission. “In other words, higher scores lead to increased subsidies.”

Federalism expert and lawmaker Khim Lal Devkota, suggests redirecting the reduced subsidy of local units that fail to meet the budget deadline to neighboring municipalities.

“This measure could foster healthy competition among local representatives and encourage better performance,” he says. “Locals will also pressurize their representatives to perform their responsibilities if they see their neighboring areas doing well.”

Devkota highlights that this approach has been successfully implemented before Nepal adopted federalism, when District Development Committees (DDC) was in charge of budget allocation. Under the system, the government would reduce the subsidy of poorly performing DDCs and allocate it to more efficient and hardworking ones. The strategy significantly enhanced the work of most of the development committees.

“It is the only way I see to hold the elected local representatives accountable,” says Devkota.

Approximately 33 percent or one-thirds of the total federal budget, equivalent to around Rs 600bn, is allocated to the local level for this fiscal year. Untimely budget allocation negatively impacts local employment, income, and ultimately hampers the overall economic growth of the country.

Economist Chandra Mani Adhikari is opposed to the idea of reducing subsidies for non-performing local units, and suggests introducing other forms of punishment. “Why should the public bear the brunt of the representatives’ corrupt actions?” he says. “People should file a petition at the Supreme Court, as these actions are an assault on our system and a violation of the Local Government Operation Act, 2017.” 

Adhikari also warns that consistent failure of the local government to do their job well could fuel people’s resentment toward federalism.

Officials at the federal affairs department of the Ministry of Federal Affairs and General Administration say local governments are not under the ministry’s jurisdiction, that they are an elected entity chosen by the people. They say the ministry just facilitates the local units, and it is the job of the people to hold their municipal governments accountable.

Laxmi Devi Pandey, chairperson of the National Association of Rural Municipalities in Nepal (NARMIN) and the chair of Hupsekot Rural Municipality, claims that the association has repeatedly reminded local units and their representatives to do the job for which they have been sent by the people. “There is no need to obstruct the executive committee and council meetings because the failure to present the budget will harm the local economy and community.” 

Kamal Prasad Bhattarai, joint secretary and the spokesperson for the Ministry of Federal Affairs and General Administration, is hopeful that the local governments will get their act together in the coming years.

“The number of local units failing to submit their budget on time has decreased over the years, and this improvement is a result of adopting a ‘learning by doing’ approach,” he says. 

Between 2020/21 and 2023/24, there has been a decreasing trend in the number of local units failing to submit their budget on time. The figures for non-compliance were 46, 53, 42, and 33, respectively.

Bhattarai says the ministry has been guiding and training local representatives to execute their roles effectively by adhering to a fixed set of protocol.

What does a quintal of gold making it through an international airport indicate? 

A security breach of titanic proportions. 

On July 19, the illegal gold concealed inside brake shoes ‘imported’ from Hong Kong in the name of Ready Traders passed through the Tribhuvan International Airport customs as security arrangements failed.  

But a team from the Revenue Investigation Department managed to intercept and seize the consignment from Sinamangal, a stone’s throw from the TIA. 

An ongoing investigation into this audacious breach has thus far brought 16 suspects under its dragnet. Public perception is that those arrested are but some small fries and that the big fish are beyond the reach of the long arm of the law.

The citizenry has reasons to be skeptical vis-à-vis the illegal gold probe, given that investigations into previous cases of gold smuggling, the Bhutanese refugee scam and the Lalita Niwas land-grab have failed to make progress beyond a point.

Frustrated with endemic corruption, political instability and the lack of rule of law as well as good governance, the citizenry has already started speculating reasons behind this inertia at a time when a deeper feeling that the high and the mighty can get away with anything is taking root in the country.

Like previous mind-boggling TIA breaches, the quintal-heavy breach has given rise to more questions than answers.

How did the cargo evade air-tight security at Hong Kong? What exactly went wrong with the screening system at the TIA that day, and how? How many times has the system gone ‘haywire’ in recent days? What amount of such illegal cargo has already made it through?   

Is the notorious ‘setting’—a prevalent collusion between the elements of bureaucracy, politics and powerful business interests—also behind this breach?

Was a falling out within the setting behind the confiscation of the cargo?

What was the end destination of the illegal cargo?

The nature of the entire operation indicates that it’s a transnational crime as the flight carrying the cargo had originated in Hong Kong. Apparently, a country that barely requires 40 kg of gold daily does not need a quintal of gold.

While the public can only speculate, the government has the wherewithal to get to the root of the case and book the guilty by working closely with transnational and international law enforcement agencies, if need be.

What directions this and other cases take will depend on one thing: The political will on the part of the government.

If the government is really serious about restoring faith in the current political system, it should be able to unravel the quintal-heavy case and other high-profile cases, come hell or high water, given that the cost of its failure will be too high for the country and the people.

The Pashupati Area Development Trust (PADT) has come under scrutiny for leasing out large tracts of land at nominal rates to various agencies, raising suspicions of irregularities. 

Jagat Deuja, a member of the National Land Commission, said that the commission was currently examining a report prepared by the PADT regarding its land and property. The investigation includes a review of lands leased out to other agencies, as well as those that have been encroached upon.

One notable case involves the leasing of 1,161 ropanis to the Tribhuvan International Airport (TIA) for a 99-year contract. According to the agreement signed in 2017, TIA is required to pay Rs 10m annually to the PADT. Prior to this agreement, TIA was paying a meager amount equivalent to only one muri three pathis of paddy (approximately 80 kg) per ropani as leasing fee.

The Tilganga Eye Center is another entity that has taken five ropanis of land from PADT on a 49-year lease, with an annual leasing fee of Rs 40,000 per ropani. Although the lease agreement was signed in 2015, the center had been using the land even before that period.

In addition, the PADT has struggled to receive the leasing fee for one ropani of land being used by Gaushala Dharmashala which has been utilizing the land for over 80 years. The leasing contract with Gaushala Dharmashala was signed about 20 years ago, and as per the agreement, PADT is entitled to receive Rs 51,000 annually as leasing fee.

PADT’s land has also faced encroachment by various individuals and groups. Approximately 100 ropanis out of the total 534 ropanis of land in Gothatar have been encroached upon by so-called squatters. Additionally, there have been attempts by various groups to gain control of the land for operating sand quarries.

If Nepali workers return home from abroad with two phones or slightly more gold than allowed, they face interrogation at TIA. Surprisingly, the government seems unwilling to take strict action against gold smugglers.

The Home Minister and Finance Minister had no idea about the attempt to smuggle roughly 100 kg of gold? Negligence of airport officials in detecting gold through X-ray machines has raised fresh concerns.

What compounds the case is the involvement of CPN (Maoist Center) leaders in gold smuggling. Despite this revelation, the government remains tight-lipped. That is why the UML has sought a special investigation committee.

During KP Sharma Oli’s premiership, a culprit involved in the 33-kg gold smuggling case was apprehended, instilling hope that Nepal will no longer be a transit point for such illegal activities. After the change of guard, more instances of smuggling have emerged, and authorities seem to be struggling to apprehend offenders.

The author is chief whip of CPN-UML