KATHMANDU: Kathmandu Metropolitan City (KMC) has failed to present its annual budget for fiscal year 2025/26 within the legally mandated deadline.
It is the only metropolitan city that missed the date, largely due to an ongoing conflict between Mayor Balen Shah and Chief Administrative Officer Saroj Guragain.
Despite repeated informal meetings and mounting pressure from executive and municipal assembly members, Mayor Shah did not convene necessary meetings to finalize the budget.
He has refused to hold discussions with CAO Guragain, citing a long-standing dispute over an allegedly unauthorized approval related to the Kathmandu Tower project.
Sources inside the city office say Mayor Shah’s refusal to coordinate has led to a complete breakdown of the Resource Estimation and Budget Ceiling Committee, which he chairs. Without this committee’s work, the Budget Formulation Committee could not proceed.
An informal meeting of the budget committee on Tuesday night decided to formally urge the Mayor to take the process seriously. According to spokesperson and committee member Nabin Manandhar, “The main initiative should have come from the Mayor. Had he coordinated, the budget would have been ready by now.”
The deadlock traces back to Shah’s earlier denial of office entry to CAO Guragain, accusing him of corruption in the Kathmandu Tower approval.
Although Guragain resumed duty in March following pressure from Deputy Mayor Sunita Dangol and ward chairs, Shah has continued to avoid working meetings with him.
The dispute is also politically charged. Insiders say Shah approved a revised map for the Kathmandu Tower in 2023 with a mere Rs 500,000 penalty—nine years after the project’s delay—despite having earlier raised legal and ethical objections.
Critics claim Shah is blaming others to cover his own role in the controversial approval.
Meanwhile, the delay in approving the budget poses severe risks. From July 17 1, KMC will face a funding shortfall affecting infrastructure projects, employee salaries, senior citizen allowances, and waste management services.
According to the Local Government Operation Act, 2017, the executive must approve and present the city’s revenue and expenditure plan to the municipal assembly by June 24 each year. Failure to do so could lead to legal complications and operational paralysis, the Budget Formulation Committee warned.
Deputy Mayor Sunita Dangol heads the budget committee, which includes the CAO and 13 other committee coordinators from key sectors. An internal memo highlights that the Resource and Budget Ceiling Committee, chaired by the Mayor, failed to meet its obligations within the April 23 deadline, further stalling the budget drafting process.
Despite claims of no communication between Shah and Guragain, official documents show the CAO’s proposals have been acknowledged and forwarded internally—indicating behind-the-scenes interaction despite a public standoff.
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