Two weeks after the federal government unveiled its budget, all seven provincial governments presented their budgets for fiscal year 2026/27). Together, the provinces proposed budgets totaling nearly Rs 293 billion, with most prioritizing physical infrastructure while also allocating resources for agriculture, tourism, healthcare, education, information technology, job creation, and social development. Yet, despite the passage of two weeks, budget deliberations have failed to begin in most provincial assemblies. Instead of debating development priorities, the assemblies have been paralysed by internal disputes within the ruling parties. The impasse has deepened as opposition parties have seized the opportunity to press their own demands. From Koshi to Sudurpashchim, discussions on next year's budgets remain stalled. Political wrangling among the country's traditional parties has not only emboldened critics of Nepal's federal system but has also intensified doubts about its effectiveness. At a time when both the performance and relevance of provincial governments are under increasing scrutiny, it is especially troubling that the deadlock stems largely from divisions within ruling parties rather than disputes between government and opposition. Differences among coalition partners are inevitable, and disagreements over budget priorities are part of democratic politics. However, such conflicts should never paralyse legislative institutions. Even more concerning is the spectacle of lawmakers opposing a budget introduced by a government led by their own party, forcing repeated postponements of assembly sessions in an effort to win over dissatisfied members. This reflects not merely political disagreement but deeper weaknesses in governance and an unhealthy political culture.
Governance in Social transformations in Nepal
A budget is far more than a financial document; it embodies a government's political vision, development priorities, and accountability to the public. Yet the controversies surrounding provincial budgets suggest that disputes are driven less by competing visions for development than by dissatisfaction over the distribution of projects and resources. Debates have centred on which constituencies received funding, whose recommendations were included or ignored, and which political factions retained influence, while meaningful discussion of policy and long-term development has taken a back seat. The widespread perception that personal and partisan interests outweigh the public good has eroded confidence in provincial governments and assemblies. Rather than advancing the public's aspirations for economic growth and prosperity, the budget disputes reveal a political culture still shaped by patronage, protectionism, and privileged access. In doing so, they strike at the very spirit of federalism. Federalism was established not as a political experiment but with the promise of bringing decision-making closer to citizens, accelerating development, and ensuring that resources are allocated according to local needs. In practice, however, many provincial governments have struggled to fulfil those expectations. While the powers of Singha Durbar have been devolved to provincial capitals, many of Kathmandu's political distortions have simply been replicated. Instead of promoting better governance, the provinces have inherited factional rivalries, power-sharing politics, efforts to appease influential figures, and politically driven allocation of public resources.
The disruption of assembly proceedings in Koshi, growing discontent within the ruling coalition in Bagmati, ruling-party lawmakers in Lumbini demanding that the budget be rewritten, serious questions over spending priorities in Karnali, and the failure of Sudurpashchim to even begin budget deliberations after a controversial late-night budget presentation are not isolated incidents. They all point to the same conclusion: provincial governments have yet to establish a budget-making process that is evidence-based, transparent, and genuinely participatory. The shortcomings of provincial governments do not mean that federalism itself has failed. Rather, they expose the weaknesses of the political parties and leaders entrusted with governing the provinces. The current dysfunction has handed fresh ammunition to opponents of federalism. Unless provincial parties reform their conduct and strengthen democratic accountability, criticism of the federal system will only grow. If citizens become increasingly disillusioned by political bargaining and partisan power struggles, the consequences could be profound. The challenge today is not to defend or reject provincial governments but to make them more accountable, transparent, and effective. The budget process—and provincial governance more broadly—must become more open, evidence-driven, participatory, and results-oriented if public trust is to be restored. Provincial leaders must move beyond political bargaining and narrow self-interest and instead uphold the principles on which federalism was founded. Only then can Nepal's federal system realise its promise and regain the confidence of the people.
