KATHMANDU: A deepening power struggle between Kathmandu Metropolitan City’s Mayor Balen Shah and Deputy Mayor Sunita Dangol has thrown the city’s budget process into disarray, putting Nepal’s capital at risk of entering the new fiscal year without an approved financial plan.
The crisis started after breakdown in communication between the two top elected officials, triggered by disagreements over the appointment and approval of the Chief Administrative Officer (CAO), Saroj Guragain.
Since the conflict erupted in late December 2024, the city’s municipal council has failed to convene a single meeting—a legal prerequisite for budget endorsement and approval.
According to Nepal’s Local Government Operations Act, local units are required to hold executive meetings regularly and must present their annual budget to the municipal assembly by Asar 10 (June 24). However, Kathmandu Metropolitan City (KMC) has not been able to begin the formal budget preparation process.
Caught in a political crossfire
The standoff began after Mayor Shah reportedly refused to give official recognition to CAO Guragain, whose presence is legally required for executive meetings to be valid.
As per the law, the CAO acts as the secretary of the executive, and the mayor must formally authorize their role for any meeting to proceed.
Despite repeated calls from 41 out of 42 municipal council members—including Deputy Mayor Dangol—to convene a meeting, Mayor Shah has remained silent. This has effectively paralyzed the city’s governing body and raised concerns about transparency, accountability, and democratic governance.
“There has been no communication between the mayor and other representatives,” said a KMC official on the condition of anonymity. “The city is now a hostage of their personal conflict.”
The failure to hold executive meetings has delayed key steps in the budget process. Normally, the process begins with pre-budget discussions led by the mayor and includes setting budget ceilings through the Resource and Limitation Committee, also chaired by the mayor.
From there, the Budget Formulation Committee—led by the deputy mayor—drafts the actual budget based on input from all departments and wards.
But this year, none of these committees have convened.
In stark contrast, neighboring Lalitpur Metropolitan City has already initiated budget discussions, including public consultations. Lalitpur’s Mayor Chiribabu Maharjan has invited suggestions from citizens and stakeholders to help shape the city’s upcoming budget—highlighting how far Kathmandu lags behind.
Despite the lack of formal process, KMC officials claim that internal work on the budget is nearly complete. Assistant Spokesperson Dhruba Kumar Kafle stated that approximately 99% of the budget preparation has been done by the municipal staff.
“Even though the municipal council meeting hasn’t been held, technical work is ongoing,” Kafle said. “We have received budget ceilings from the federal and provincial governments. We are working internally to allocate resources.”
He added that ward-level public hearings are being conducted to collect project proposals, although final plans have yet to be submitted to the city office.
Running out time
Spokesperson Nabin Manandhar acknowledged the delay but expressed hope that the process could be expedited.
“There’s still time. Perhaps the mayor is planning to push everything through quickly,” he said. “But it’s getting late.”
According to legal procedures, all planning, budgeting, and program finalization must be completed between Jesth 10 (May 24) and Asar 10 (June 24). With less than two weeks remaining, the absence of executive coordination raises the risk that the city may breach its legal obligation.
“This is the last full budget of the current term,” Manandhar said. “If they don’t get it done now, it will reflect poorly on the entire leadership.”
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