The government is facing a financial crisis as the budget fails to pass Parliament

The government is facing a financial crisis as the budget fails to pass Parliament

However, concerns have grown if the spending could be hobbled for a longer period of time with the main opposition insisting on not allowing the House to function until its demand is met.

“If my memory serves me right, this is the first time the government has faced such a situation in which it cannot spend a single paisa,” said Ram Sharan Pudasaini, who recently retired as a revenue secretary from the Finance Ministry.

The budget for the fiscal year 2021-22 was brought by the erstwhile KP Sharma Oli government on May 29 through an ordinance, as the House had been dissolved on May 21, amid criticism. But on July 12, the Supreme Court not only restored the House but also ousted KP Oli, asking the President to appoint Nepali Congress’ Sher Bahadur Deuba the new prime minister.

With the replacement bill failing to pass the lower house on time, all government spendings would come to a halt from Wednesday night.

Story Highlights

  • With the budget still stuck in the lower house, Finance Minister Janardan Sharma said spending could be affected “for five to seven days”.

  • Bureaucrats who have worked in the Finance Ministry in the past say this is probably the first time the country has faced such a financial deadlock, with a complete bar on spending.

The Deuba government presented the budget ordinance in the House on July 18. Then a replacement bill was tabled at the House to replace the ordinance on appropriation on September 10.

As per the parliamentary rules, a replacement bill of any ordinance should be endorsed by both houses of Parliament within 60 days of the tabling of the ordinance. The deadline expires on Wednesday (September 15).

Ever since the new House session began on September 8, the main opposition UML has resorted to obstructions, accusing Speaker Agni Sapkota of failing to fulfil his duty as an independent presiding officer. As the 60-day deadline for passing the ordinance was nearing, the government was under pressure, but the UML refused to relent. The UML, which has alleged that the Speaker played a complicit role in splitting the party by sitting on its recommendation to expel 14 dissident lawmakers, got enraged further on Friday after Sharma presented a bill to replace the budget ordinance by making some changes to the earlier budget, amid sloganeering from the opposition lawmakers.

After the UML did not allow the House to function on Sunday, Speaker Sapkota called an all-party meeting on Monday. The UML boycotted it. As soon as the House meeting began on Tuesday, the Speaker allowed discussions on the replacement bill. No lawmaker participated in the discussion, except Prem Suwal, a member of the lower house from Nepal Majdoor Kisan Party. After that, the Speaker adjourned the House for September 20.

According to officials and experts, the government had two options—either introducing a vote on account bill to spend a maximum of one-third of the total estimated expenditure or ending the current session of Parliament so as to create a situation for introducing the same budget again as ordinance. But Finance Minister Sharma told journalists after the House meeting that the government won’t present a vote on the account bill (advance expenditure) nor will it bring a new ordinance.

Given the strengths of his party and the coalition partners in both the houses, passing the replacement bill should not be an issue, provided that the UML allows the proceedings. The UML appears to have issues with the Speaker rather than the budget. Sapkota was appointed Speaker in January last year after a months-long tug-of-war between Oli and Pushpa Kamal Dahal, who jointly co-chaired the then Nepal Communist Party (NCP).

The failure to get the budget through the House comes as yet another setback for Deuba who has been facing criticism for not being able to expand his Cabinet even two months after assuming office. “With the meeting of the lower house adjourned, a vote on account bill cannot be presented,” said Pudasaini. “There is no room for a new ordinance as long as the House is in session.”