Sudurpaschim budget stalls again as ruling coalition turns on its own plan
Months into 2026/27, Nepal's far-western province still has no approved Rs 37.70bn budget, and the delay has disrupted administration and development work.
On Sunday 11 October 2026, Chakra Bahadur Malla, economic affairs minister of Sudurpaschim, Nepal's far-western province, presented a budget to the provincial assembly that should have been in force months earlier. The fiscal year was already well under way, and his document was the province's second attempt to secure an approved spending plan for it, The Himalayan Times reported.
The resistance came from inside the government itself. An assembly debate set for 8 am on Monday 12 October 2026 was pushed back to 9 am on Tuesday 13 October 2026, after lawmakers from the ruling parties signalled they would not back the plan, Online Khabar reported.
For anyone doing business in the region, the question is when the province will have a budget it can spend. As of 13 October 2026, neither report gave a date for a vote.
A budget its own side resists
The Rs 37.70bn budget, about $246m at the central bank's rate of Rs 153.54 to the dollar, arrived nearly three months after the 2026/27 fiscal year began, The Himalayan Times reported. Online Khabar put the delay at about two months.
What sets this round apart is where the opposition sits. Lawmakers from the CPN-UML and the Nepali Communist Party, the two partners in the ruling alliance, warned they would not help pass the budget, Online Khabar reported. Even some ministers seem unhappy with the plan, according to the same news site.
The objections go beyond routine bargaining over allocations. Some ruling-party lawmakers went further, claiming the plan had emerged from a "commission game" run through middlemen, Online Khabar reported. That is an unproven allegation made in a political dispute, not a finding by any investigating body; the reports set out no evidence for it and do not link it to any named person.
A separate complaint concerns process. The site also reported an accusation, without saying who made it, that three officials had handled the budget on their own: Chief Minister Khagaraj Bhatta, Malla, and Rajendra Hamal, the province's economic affairs secretary. With the row deepening, Bhatta called his ministers in for talks, the site added.
How the province got here
This is the second deadlock in a single budget cycle. In June 2026 the provincial government then headed by Chief Minister Kamal Bahadur Shah presented a budget that failed to pass amid disputes within his coalition of the Nepali Congress and the CPN-UML, The Himalayan Times reported.
That coalition collapsed, and on 14 August 2026 a new government under Bhatta took office through an alliance of the CPN-UML and the Nepali Communist Party, according to the same report. New partners did not settle the quarrel: coalition members and cabinet ministers kept disputing how large the budget should be, which projects it should fund and what each ministry should receive, the paper reported.
The pattern matters for outsiders reading Nepal's politics. The CPN-UML sat in both governments. The line-up changed, but the contest over who controls provincial money carried straight across from one arrangement to the next.
- Shah government presents budget; it fails amid Nepali Congress and CPN-UML disputes
- Bhatta government formed by CPN-UML and Nepali Communist Party
- Malla presents Rs 37.70bn budget, the second attempt
- Assembly debate postponed to the following morning as ruling lawmakers object
- Rescheduled assembly debate due at 9 am
Source: The Himalayan Times; Online Khabar
What the money is, and where it comes from
The province expects to raise Rs 1.72bn, about $11m, in internal revenue, The Himalayan Times reported. That is under 5% of the total.
Most of the rest comes from Kathmandu. The plan counts on Rs 10.25bn through the federal revenue-sharing mechanism, Rs 9.06bn in fiscal equalisation grants (transfers meant to narrow differences in provinces' capacity to fund services), Rs 6.04bn in conditional grants tied to set purposes, Rs 388m in federal matching grants, Rs 527.6m in special grants and Rs 70m from shared federal royalties, The Himalayan Times reported. Taken together, federal transfers account for roughly 70% of the plan.
The second-largest single source is not new money. The budget relies on Rs 9.65bn, about $63m, that is expected to be left unspent from the previous fiscal year, The Himalayan Times reported. That is roughly a quarter of the whole.
- Federal revenue sharingRs 10.25bn27%
- Unspent funds from previous yearRs 9.65bn26%
- Fiscal equalisation grantsRs 9.06bn24%
- Conditional grantsRs 6.04bn16%
- Internal revenueRs 1.72bn5%
- Special grantsRs 0.53bn1%
- Matching grantsRs 0.39bn1%
- Federal royalty sharingRs 0.07bn<1%
Source: The Himalayan Times
That structure carries two implications. First, the fight in Dhangadhi is largely about dividing money that someone else provides, which helps explain why project selection and ministry shares, rather than tax policy, have become the battleground. Second, heavy reliance on carried-over funds means the province is budgeting partly with money it did not manage to spend in 2025/26. Each month of delay in 2026/27 risks repeating that cycle.
The cost of standing still
Going nearly three months without an approved budget has hampered day-to-day administration and development programmes alike, The Himalayan Times reported. The paper said passage would put routine spending and development schemes back on track.
For contractors, suppliers and local firms that depend on provincial works, the stalemate is likely to mean continued uncertainty over when projects and payments can proceed. A province whose own revenue covers under 5% of its budget has few other levers to support local activity while the assembly argues.
There is also a reputational cost. Nepal's provincial tier was designed to bring decisions closer to the regions. Two stalled budgets in one cycle, together with open dissent inside the ruling alliance, give critics of that system fresh material whatever the outcome.
Source: The Himalayan Times
What to watch
The first test is whether the session rescheduled for 13 October 2026 goes ahead, and whether CPN-UML and Nepali Communist Party lawmakers carry out their warning. Bhatta's talks with his ministers should show whether the leadership will reopen allocations to win back its own side.
Second, watch the calendar. Each further week without approval narrows the window for spending in 2026/27 and, on the evidence of the Rs 9.65bn carried into this budget, raises the risk that more money goes unspent and rolls into 2027/28.
How this story was made: researched and written by The Standard’s desk with AI assistance, from the published reporting and official data credited below, and checked against those sources. Our standards.
