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Among the 753 local governments, 33—11 municipalities and 22 rural municipalities—have failed to bring their budget for the fiscal year 2023/24 on time. According to Section 71 of the Local Government Operation Act, 2017, local governments are required to present their budget by Asar 10 (June 24/25) and have them passed by the end of Asar (July 15/16). 

On a positive note, Sudurpaschim province, which has 88 local units, has achieved a 100 percent record this year as all units passed their budget on time. In the fiscal years 2022/23 and 2020/21, Gandaki province had also set a perfect record. 

Meanwhile, Madhes province continues to have a poor track record. As the second largest province in terms of local units, Madhes has 136 governments, and 24 of them failed to pass their budgets on time this year. The number of local units missing the budget deadline in Madhes was 34 in 2020/21, 32 in 2021/22, and 28 in 2022/23.

Geeta Devi Mahato, the Vice-chairperson of Chandranagar Rural Municipality in Sarlahi district, Madhes, has accused Chairperson Raj Kumar Mahato of taking unilateral decisions without consulting others, resulting in the budget presentation delay. 

Raj Kumar, on the other hand, points finger at Geeta Devi and her team for the delay, claiming they refused to attend numerous meetings convened to address the issue concerning budget allocation. “They have been boycotting the executive committee and village council meetings without providing any valid reasons,” he says.

Disagreement between municipal heads and their deputies is the main reason behind the delay in budget presentation.  

ApEx reached out to many representatives from the local units that had failed to bring their budget on time, and they all had the same excuse, where mayors or chairpersons blamed their deputies and vice versa.

Four local units in Gandaki province, two in Lumbini and one each in Koshi, Bagmati and Karnali provinces also failed to meet the budget presentation deadline.

Ram Chandra Joshi, mayor of Kushma Municipality, Parbat district of Gandaki province, says that the budget process was obstructed because several ward chairpersons wanted more budget allocations for their areas. “There is no other reason to obstruct the budget presentation process other than to exert political pressure on me.”

Joshi says he lacks a majority in the executive committee and council, but the Local Government Operation Act, 2017 has not imagined a majority or minority provisions for local executives and councils. “Despite being aware of the law, the obstruction from executive committee members prevented us from presenting the budget on time,” adds Joshi.

The Municipal Association of Nepal (MuAN) says that the general public should not suffer due to the power struggles among local representatives. “A law should be passed so that those local units that fail to bring the budget on time are prohibited from spending even a single rupee from the state coffers,” suggests an official from the association.

Currently, the only repercussion faced by municipalities for delayed budget submissions is receiving reduced subsidies from the National Natural Resources and Fiscal Commission. 

“The commission allocates subsidies to local units based on their performance, with timely budget presentation and approval carrying weightage of five points each in the total score of 100 points,” says Gyanendra Paudel, the spokesperson for the commission. “In other words, higher scores lead to increased subsidies.”

Federalism expert and lawmaker Khim Lal Devkota, suggests redirecting the reduced subsidy of local units that fail to meet the budget deadline to neighboring municipalities.

“This measure could foster healthy competition among local representatives and encourage better performance,” he says. “Locals will also pressurize their representatives to perform their responsibilities if they see their neighboring areas doing well.”

Devkota highlights that this approach has been successfully implemented before Nepal adopted federalism, when District Development Committees (DDC) was in charge of budget allocation. Under the system, the government would reduce the subsidy of poorly performing DDCs and allocate it to more efficient and hardworking ones. The strategy significantly enhanced the work of most of the development committees.

“It is the only way I see to hold the elected local representatives accountable,” says Devkota.

Approximately 33 percent or one-thirds of the total federal budget, equivalent to around Rs 600bn, is allocated to the local level for this fiscal year. Untimely budget allocation negatively impacts local employment, income, and ultimately hampers the overall economic growth of the country.

Economist Chandra Mani Adhikari is opposed to the idea of reducing subsidies for non-performing local units, and suggests introducing other forms of punishment. “Why should the public bear the brunt of the representatives’ corrupt actions?” he says. “People should file a petition at the Supreme Court, as these actions are an assault on our system and a violation of the Local Government Operation Act, 2017.” 

Adhikari also warns that consistent failure of the local government to do their job well could fuel people’s resentment toward federalism.

Officials at the federal affairs department of the Ministry of Federal Affairs and General Administration say local governments are not under the ministry’s jurisdiction, that they are an elected entity chosen by the people. They say the ministry just facilitates the local units, and it is the job of the people to hold their municipal governments accountable.

Laxmi Devi Pandey, chairperson of the National Association of Rural Municipalities in Nepal (NARMIN) and the chair of Hupsekot Rural Municipality, claims that the association has repeatedly reminded local units and their representatives to do the job for which they have been sent by the people. “There is no need to obstruct the executive committee and council meetings because the failure to present the budget will harm the local economy and community.” 

Kamal Prasad Bhattarai, joint secretary and the spokesperson for the Ministry of Federal Affairs and General Administration, is hopeful that the local governments will get their act together in the coming years.

“The number of local units failing to submit their budget on time has decreased over the years, and this improvement is a result of adopting a ‘learning by doing’ approach,” he says. 

Between 2020/21 and 2023/24, there has been a decreasing trend in the number of local units failing to submit their budget on time. The figures for non-compliance were 46, 53, 42, and 33, respectively.

Bhattarai says the ministry has been guiding and training local representatives to execute their roles effectively by adhering to a fixed set of protocol.

Nepal Wool Felt Producers’ and Exporters’ Association recently celebrated its 17th anniversary in Kathmandu.

On the occasion, the association felicitated its founder Sagar Thapa in recognition of his work. 

Thapa identified the need for a coalition of felt producers and traders for the betterment of the industry, and took the initiative to set up the association, which was founded in 2007.

“This association, which has been helping, not only the felt entrepreneurs, but the workers, in their business, is a brain child of Thapa,” said Sarada Rijal, founding president of the association. 

Thapa is considered a pioneer in felt production and export, who inspired many people to join the association by training them. He also helped many traders to participate in exhibitions in Europe.

Despite his contribution to the Nepali felt industry, Rijal said Thapa never insisted on taking any position in the association.

Nepali felt products are exported in over 20 countries and the association regularly participates in trade fairs held in around 15 countries. Nepal exports felt products worth Rs 11bn annually.

Amrit Khadka, former president of the association, said: “Felt is among rare products which get exported from Nepal. But the government has imposed a five percent tax and 13 percent VAT in felt products which should be reviewed.”

Felt industry provides employment to over 20,000 people and over 90 percent of them are women which is helping to maintain good living standards. 

Naresh Lal Shrestha, president of the association and owner of Bagmati Handicrafts, praised the family-like relations in the association.

“We treat the people involved here as family members. That is why there hasn’t been any election in the association in these 17 long years. I can proudly say that no other association has unity like us,” he added.

Biswas Shrestha, owner of Hopp Creation Industries Pvt. Ltd., said felt products are among the few items being exported from Nepal. “To further increase the export, we need to have raw materials produced in Nepal,” he added.

Shrestha’s industry employs around 400 women, who make different kinds of felt products out of wool imported from New Zealand. The finished products are exported back to New Zealand.

“If we can have a massive sheep farm here, we can keep 100 percent of the foreign currency income in Nepal,” said Shrestha.
The association’s president and the owner of Bagmati Handicrafts, Naresh Lal Shrestha, said though Nepali felt industry add 50–60 percent value addition to the business, they can do better with the government help. “This industry has the capacity to cater to all the Nepalis who want to return home from foreign employment,” he added.

Thapa’s brainchild

Sagar Thapa, general secretary of Nepal-Israel Chamber of Commerce started the business of felt handicrafts in 2001 and is still continuing to contribute to the industry. He promotes Nepali felt products globally through Panchakanya Nepal Enterprises where he has kept his workers as his business partners.

In these 23 years in the industry, he has provided services to over 2,000 SME entrepreneurs through international tarde fair participations. The services not only include business and trade but also training and knowledge sharing classes. “I also help newcomers to seek the market,” said Thapa. Till 2024, he hopes to produce 500 skilled youths in the exportable business.

“I wanted to form an association of felt producers as it would help the businesspersons to convey their voice boldly and help laborers advocate for their rights,” he says that he is inspired by a concept of many in bodies, one in mind.

Thapa has also contributed to various social and charitable works including the Bagmati Cleaning Campaign. “It gives me 100 times more happiness when I get to work and help others from the background,” he said. “I’ll continue my constructive and positive work.”

Thapa added if the government provides a better environment and infrastructure, in 10 years, Nepal’s Rs 11bn felt export industry can become a Rs 80bn industry.

“I am happy that even after 17 years, the association has not forgotten my work,” said Thapa. “The association’s founding Vice-president Rajan Karmacharya has also equally contributed to this initiative.”

Waste management problem of Kathmandu has resurfaced once again due to the protests by residents of Kakani Rural Municipality in Nuwakot and Dhunibesi Municipality in Dhading. They have blocked the transportation of waste trucks to Banchare Danda, the designated landfill site, citing non-implementation of previous agreements with the Kathmandu Metropolitan City (KMC). 

The agitating locals claim that despite signing an agreement a year ago, the KMC has failed to fulfill its obligations.

Suman Tamang, chairperson of Kakani Rural Municipality, says that it is not feasible for people to live among fetid waste, while KMC does nothing. “Kathmandu should manage its waste in alternative sites or relocate the affected residents. If this issue remains unaddressed, waste disposal will continue to be disrupted,” he says.

Around 50 waste trucks are stuck between Sisdole and Banchare Danda. The residents have accused the KMC of deceiving them by not adhering to the agreements, which included the segregation of biodegradable and non-biodegradable waste and the management of only degradable waste at the landfill site. 

Recently, Kakani Rural Municipality decided to charge an entry fee for vehicles carrying garbage. However, local residents opposed this decision, saying that public health is more important than revenue. 

An appeal was filed in the Supreme Court against levying of the entry fee for garbage trucks, resulting in an interim stay order preventing the collection of fees. 

The KMC team attempted to negotiate with municipal officials, but to no avail. 

“The locals and municipal officials asked us to negotiate with the federal government instead. They are obstructing the route but they want us to negotiate with the federal government,” says Nabin Manandhar, the KMC spokesperson.

The main demand of the protesting locals is acquisition of 3,000 ropanis of land surrounding the waste disposal site, which is beyond the KMC’s capabilities alone. Manandhar says that the KMC is in contact with the federal government regarding this matter.

Until last year, garbage from the 18 local areas in Kathmandu Valley was managed at Sisdole, but it was subsequently relocated to the nearby Banchare Danda landfill site, which lies on the border of Nuwakot and Dhading districts

Birth: 5 July 1954, Kaski

Death: 12 July 2023, Kathmandu

Sita Dahal, the wife of Prime Minister Pushpa Kamal Dahal who passed away on Wednesday, was not just a doting mother and a politician’s spouse, she was also a watchful protector and advisor of CPN (Maoist Center).  

Born on 5 July 1954, in Kaski, her family permanently relocated to Chitwan when she was eight. In 1969, she married Dahal and became involved in politics alongside. Throughout her healthy life, Sita played a vital role in the party, acting as a coordinator, guardian, and advisor for the party.

Dev Gurung, general secretary of the Maoist Center, hailed her unwavering dedication to the party: “During the Panchayat period, she spent a significant amount of time underground for party work. She remained actively engaged in underground politics from the beginning of the civil war, acting as a coordinator and guardian for the entire party during tumultuous years.”

Party leaders and cadres remember her as the party’s true guardian, adept at uniting everyone, particularly in times of crises. Within the party too, she was seen as a motherly figure, who was loved and respected.

“Besides being a supportive spouse to our party chairman, she also assumed various roles within the party,” says Dinanath Sharma, secretary of the Maoist Centre. “She played a pivotal role in unifying party leaders and cadres, ensuring the party’s resilience during challenging periods. In addition to her private responsibilities, she displayed a warrior-like spirit and offered many valuable suggestions.” 

Despite her position, Sita maintained a down-to-earth demeanor and possessed an equal and respectful attitude towards people from all walks of life. Her amicable nature made it easy for the public to connect with Prime Minister Dahal, and she played an integral role in supporting him through the ups and downs of his political journey.

Krishna KC, a member of the secretariat team during Prime Minister Dahal’s second term, says it was because of Sita that general public and party cadres could easily approach the prime minister and party chair.

“It was her who used to advise the prime minister to always make time for people,” adds KC. 

Despite her powerful position, Sita embraced an ordinary life and relished her experiences, perhaps influenced by her upbringing in a humble farming family. She treated everyone with equal respect, whether they held high status, were party workers, or belonged to ordinary backgrounds.

“To make a revolution successful, there are equal roles of many frontliners and backliners. Sita Dahal is one of such a backliner who is a strong pillar of the Maoist revolution,” says Chairperson of Communist Party of Nepal Netra Bikram Chand, who was a close hand of Prime Minister Dahal during the insurgency period.

Sita’s role as an advisor to her husband and the party stopped after she was diagnosed with a debilitating condition related to a rare neurological disorder called Progressive Supranuclear Palsy (PSP) Parkinsonism. She was also suffering from Diabetes Mellitus-II and Hypertension. Over the years, her condition continued to deteriorate. She passed away while undergoing treatment at Norvic International Hospital in Kathmandu. She is survived by her husband and two daughters.

The Central Investigation Bureau (CIB) of Nepal Police on Sunday arrested three more people in connection with the Lalita Niwas land grab case, taking the number of arrestees to seven. The case has caught a lot of public attention, as several high profile individuals, including former prime ministers, are said to be involved in it. Here is an overview of the key details you need to know in order to understand the scandal.

What is Lalita Niwas?

During the 1920s, Bhim Shumsher, a Rana prime minister, acquired around 300 ropanis of land situated a few kilometers north of the center of Kathmandu, near the present-day location of Baluwatar. He constructed the Subarna Mahal on this land, which was named after his grandson, Subarna Shumsher. There are reports indicating that Bhim Shumsher forcibly seized farmland from numerous individuals to set up the palace compound. This area later came to be known as Lalita Niwas. Although the exact origin of the name remains unclear, some believe that the property was named after Subarna Shumsher’s mother, Lalita.

Who owns—or owned—Lalita Niwas?

Subarna Shumsher, who was a member of the Nepali Congress, served as the finance minister of the interim government formed in 1951 following the end of the dictatorial Rana regime. Despite being a member of the Rana family, Subarna Shumsher had joined the Nepali Congress, which later formed a government in May 1959 after securing a majority in the country’s first general election. 

However, in 1960, the then King Mahendra Shah staged a coup against the democratically elected government, banned all political parties, and established a partyless Panchayat rule that lasted for another 30 years. It was during this period that the royal palace seized 14 ropanis of land from Lalita Niwas. The remaining 284 ropanis of the land from Lalita Niwas were acquired according to the Land Acquisition Act of 1961, with compensation being paid to Subarna Shumsher’s family. 

However, Subarna Shumsher’s childrens have argued that the entire land was seized by the government without any compensation. But, a government committee that investigated the case discovered that the government had issued a notice requesting them to claim compensation for the land.

Furthermore, the government’s probe committee found evidence that Subarna Shumsher’s eldest son, Kanak Shumsher, who was serving in the royal army in 1965, acknowledged in a letter to the government that the 284 ropani of land had indeed been legally acquired by the authorities.

Official records indicate that the Panchayat government sold eight ropani of land from Lalita Niwas. The remaining 292 ropani of land, however, remained under government ownership until 1990.

What happened post-Panchayat?

Following the reinstatement of democracy in 1990, the Cabinet led by Prime Minister Krishna Prasad Bhattarai made the decision to return the land to the rightful owners that had been seized by the Panchayat regime. However, the Cabinet clarified that a significant portion of Lalita Niwas would not be transferred, as the government had already designated different sections of Lalita Niwas for Nepal Rastra Bank, the residences of the prime minister, chief justice, and speaker of parliament. 

According to the Cabinet decision, only the 14 ropani of land that had been seized by King Mahendra at that time should have been returned to Subarna Shumsher’s family. But in 1991, Rukma Shumsher, the grandson of Subarna Shumsher, submitted an application to the Land Revenue Office, requesting the return of an additional 112 ropani of land. The Land Revenue Office, without informing the government and other stakeholders, transferred the 112 ropani of land to Sunita Rana, Shailaja Rana, and Rukma Shumsher Rana as inheritors of Subarna Shumsher’s property.

However, the transfer process faced complications when the tenants (Mohi) who had been working on the land for years claimed their share. In 1997, they filed a case at the Patan Appellate Court. The court ruled in favor of the tenants in 2000.

Where did the scam happen?

Subsequent investigations revealed that the tenants involved in the case were fraudulent and had colluded with the Rana family in a scheme to occupy all the land of Lalita Niwas, which was later sold to the ‘land mafia’.

The issue remained relatively unnoticed for a considerable period of time. However, the controversy resurfaced when Advocate Yubaraj Koirala presented documents related to Lalita Niwas that had gone missing from the Land Revenue Office. 

According to Advocate Koirala, as a practicing lawyer in 2000, he came across the documents pertaining to Lalita Niwas during court proceedings. Sensing something suspicious, he initiated an investigation and began gathering evidence and relevant documents related to Lalita Niwas. He released the documents a couple of years later after he started finding evidence of the scam.

By that time, officials from the Land Registration Office, who were also involved, had already destroyed the original copy of the document in an attempt to get rid of the evidence.

Mukunda Prasad Acharya, director general of the Department of Land Revenue, was the main person to facilitate the scammers with forged documents and stamps. It is believed the Lalita Niwas scam as we know today started in 1991. The Nepal Police discovered that land revenue official Dharma Prasad Gautam had prepared all the necessary documents to facilitate the transfer of ownership. It has been found that the Rana family had bribed the officials with some portion of land of Lalita Niwas as ‘gifts’.

Formation of probe panel

Advocate Koirala researched the case for around a decade and constantly pressured the concerned parties to take action. As he had revealed the names of ‘high profile’, he says that he is still receiving death threats. 

The case caught the attention of the media and public which compelled the KP Oli-led government to form a special probe committee under former secretary Sharada Prasad Trital on 28 May 2018. In its report, the committee highlighted that the Cabinet led by Prime Minister Krishna Prasad Bhattarai had specifically directed that only the land seized during the Panchayat era should be returned to the rightful owners. However, officials at the land revenue office acted in violation of the Cabinet’s decision and unlawfully transferred ownership of legitimately acquired land to individuals in exchange for bribes.

According to the findings of the committee, Subarna Shumsher’s family had illegally occupied 112 ropani of land, which the government had already acquired and compensated for. The committee also concluded that the ‘land mafia’ and those in possession of the land successfully seized it through controversial Cabinet decisions in 1990, 1992, 2005, 2010, and 2012.

Furthermore, the probe committee’s report revealed that it was not only Lalita Niwas land that was misappropriated. A total of 1,859 ropanis, 14 aanas, 3 paisas, and 3 daams (approximately 95 hectares) of land, valued in billions, which had been legally acquired by the Panchayat regime, was unlawfully seized by the ‘land mafia’ in collaboration with political leaders and government officials.

Involvement of ‘high profile’ people

Madhav Kumar Nepal, Former prime minister

During the Madhav Kumar Nepal government, Bijay Kumar Gachhadar of the Nepali Congress served as a Minister of Physical Infrastructure and Deep Basnyat was the secretary at the ministry. It was during their tenure that they decided to fraudulently register plots of land in the names of numerous individuals and fake tenants.

The Nepal Cabinet had made a decision to expand the prime minister’s residence and construct a road within Lalita Niwas by compensating individuals who had illegally occupied the land. This agenda was brought by Gachhadar in the Cabinet. It has been found that the Nepal Cabinet made three different decisions in three separate meetings, providing an opportunity for the accused parties to engage in the scam. 

All of the decisions were against the law. Several members in the Nepal Cabinet have stated that Lalita Niwas-related matters were never discussed during meetings, indicating the potential direct involvement of former prime minister Nepal.

The probe committee identifies Shova Kanta Dhakal and Ram Kumar Subedi as key individuals involved in the scam, labeling them as ‘land mafias’. From the early stages of the scam, these individuals have been implicated, as they still hold over 15 ropanis of Lalita Niwas land in their names, even after selling 30 ropanis of land to others.

The proprietor of Bhatbhateni Supermarket, Min Bahadur Gurung, and his family are owners of more than 29 ropanis of Lalita Niwas land. They acquired the land from Dhakal and Subedi. Furthermore, the duo also sold approximately five ropanis of land to former election commissioner Sudhir Kumar Shah.

Bishnu Paudel, Former finance minister

Nabin Paudel, son of CPN-UML Vice-chairperson and former finance minister Bishnu Paudel, along with sitting Supreme Court Justice Kumar Regmi, purchased land within the Lalita Niwas premises from Dhakal and Subedi in early 2005.

It is learnt that Paudel and Dhakal have close relations as they had been into financial connection earlier also. Justice Regmi has stated that he acquired the land as a legal consultation fee during his time working as an advocate.

There are speculations that Bishnu Paudel, as a close hand of former prime minister Madhav Kumar Nepal, had potential involvement in requesting favorable Cabinet decisions for the scammers.

Baburam Bhattarai, Former prime minister

When Bhattarai was prime minister, his Cabinet decided to transfer around three ropanis of land of Nepal government to ‘Pashupati Tinkinchha Guthi’ but the Trital-led committee had been unable to find about this Guthi. Neither the ministry officials nor the Guthi stakeholders know about the existence of this Guthi, raising suspicion against Bhattarai in the land grab case. 

CIAA’s charge sheet

The government in 2019, asked the Commission for the Investigation of Abuse of Authority (CIAA) and CIB of Nepal Police to promptly investigate the case of Lalita Niwas after the Trital committee summoned their report to the then prime minister, KP Sharma Oli. 

After a year-long investigation, the CIAA filed a charge-sheet against 175 individuals at the Special Court in Feb 2020, accusing them of participating in the illegal registration of Lalita Niwas land under various individuals. 

Former deputy prime minister Gachchhadar, former ministers Chandra Dev Joshi, Chhabi Raj Pant, and Dambar Shrestha, former secretary Dinesh Hari Adhikari, and former CIAA chief Basnyat were among those charged.

Notably, the anti-graft body did not file corruption cases against former prime ministers Madhav Kumar Nepal and Baburam Bhattarai, despite the fact that Cabinet-level decisions to legitimize the transfer of government land to individuals were made during their terms. The CIAA has said that as Cabinet decisions do not fall within its jurisdiction, it cannot charge the former prime ministers.

Nabin Paudel and Kumar Regmi were also not included in the charge-sheet, as the CIAA said, they had expressed willingness to return the land. To distance themselves from the scam, Paudel and Regmi quietly returned the land they owned within Lalita Niwas to the government.

The case is currently pending in court. It seems like the Special Court has not taken this case seriously as there has been minimal progress.

Two separate cases have also been filed at the Supreme Court against former prime ministers Nepal and Bhattarai, but the court has kept both the cases on hold. There are speculations that the ruling parties at that time, Congress and the Maoists, initiated an impeachment motion against the then Chief Justice Cholendra Shumsher Rana after they became aware that he intended to investigate the land grab scam involving Nepal and Bhattarai..

CIB reopens the file

As the CIAA was investigating the Lalita Niwas scam focusing on corruption, the CIB of Nepal Police took a different approach. Starting in 2019, the CIB began investigating the case for forged documents and fake governmental stamps related to the scam.

In Jan 2022, the CIB concluded its investigation and submitted a report to the Public Prosecutors Office, urging further action against around 300 individuals involved in the scam. However, a week later, the government attorney returned the report, stating that additional investigation was necessary.

The CIB acknowledged the attorney’s directive and expressed its intention to conduct further investigation accordingly, but there were no updates until the CIB nabbed Bhatbhateni Supermarket owner Gurung along with six others on June 27. 

Present situation

The Nepal Police has issued arrest warrants against 406 individuals, including several high-profile officials, implicated in the Lalita Niwas scam. On June 28, the CIB obtained warrants from the Kathmandu District Court to arrest these individuals.

Currently, the CIB is holding 15 individuals in its custody. CIB chief Additional Inspector General Kiran Bajracharya has said that the accused individuals have committed organized crime in relation to the Lalita Niwas scam. 

“Given the nature of the crime, it appears that numerous individuals collaborated in an organized manner to carry out fraudulent activities. Therefore, we are working closely with the public prosecutor to establish whether this can be classified as an organized crime,” she said.

What next?

Under the provisions on Forged Documents (Fogery), if a person forges the seal of a government office or seal or signature of a government employee in the course of the government business, or any document with such seal or signature, the person shall be liable to the punishment of imprisonment for a term of seven years.

Under the provisions of the Organized Crime Act, those found guilty of organized crime may face imprisonment for up to five years or a fine of up to Rs 500,000. Since organized crime involves multiple interconnected criminal activities, the police believe that the Lalita Niwas land case falls under the purview of the Organized Crime Act. The severity of the punishment will be determined based on the level of involvement of each individual implicated.

Former Nepal Police DIG Hemanta Malla Thakuri has said that no matter how much the police try to nab the so-called big fishes, without the support of the government, it is going to be difficult. “Nepal Police is just a small unit of a large system of Nepal which is driven by politics, bad politics actually,” he said. “All the political parties and media should pressurize the government for a better probe.”

Though Paudel and Regmi are not under CIAA’s radar, Nepal Police spokesperson Deputy Inspector General Kuber Kadayat has said that the CIB is investigating the case for forged documents and fake governmental stamps, not solely relying on the CIAA’s corruption investigation. “We will nab everyone found involved in forgery.” 

What happened when?

• 1920: Bhim Shumsher acquired 300 ropanis of land and built Lalita Niwas for his grandson Subarna Shumsher 
• 1960: King Mahendra seized and acquired the land of Lalita Niwas
• 1990: Krishna Prasad Bhattarai-led Cabinet decided to return 14 ropanis of seized land of Lalita Niwas to rightful owners
• 1991: Land Revenue Office, without informing the government, transferred 112 ropanis of land to inheritors of Subarna Shumsher;  then director general of Land Revenue Department Mukunda Prasad Aryal played a key role
• 1997: Fake tenants (Mohi) filed a court case claiming their share in Lalita Niwas
• 2000: The court ruled in favor of tenants; however, advocate Yuvraj Koirala smelled something fishy and started investigating quietly
• 2005: Advocate Koirala started talking about the scam but didn’t get much limelight; by the time, ‘land mafias’ Shova Kanta Dhakaland Ram Kumar Subedi had made larger share of Lalita Niwas to their names and had sold it to others like UML vice-chair Bishnu Paudel, sitting SC justice Kumar Regmi and Bhatbhateni owner Min Bahadur Gurung
• 2010: The Madhav Kumar Nepal government, through its decisions, helped the scammers to continue their involvement; then Physical Infrastructure Minister Bijay Gachhadar and secretary Deep Basnyat played a key role 
• 2012:The Baburam Bhattarai government endorsed decisions that helped the scammers
• 2016: The Lalita Niwas land-grab scam started grabbing national headlines
• 2018: The KP Oli government, due to public pressure, formed a probe panel to investigate the case
• 2019: The probe committee submitted their report and the Oli government asked CIAA and CIB to investigate the case
• 2020: CIAA filed a case against 175 individuals including Nepali Congress leader Gacchadar at Special Court; the case is still awaiting final verdict
• 2022: CIB submitted its investigation report to Public Prosecutor’s Office, but was returned citing need for additional investigation
• 2023: CIB issued arrest warrant against 406 individuals and nabbed nine including Bhatbhateni promoter Gurung in connection with Lalita Niwas land-grab scam 

As the Central Investigation Bureau (CIB) of Nepal Police reopens the files of Lalita Niwas land grab scam, all eyes are on ‘high profile’ political leaders who were allegedly involved in the case.  As CIB continues to arrest more individuals for the investigation, some high-profile leaders have already left Kathmandu and it has caused unease among the politicians whose names were drawn in one of worst corruption scandals of past decades.

For instance, the CIB investigation forced former prime minister Baburam Bhattarai to come up with a long clarification claiming that he is not involved in the case. Other senior leaders are former prime minister Madhav Kumar Nepal, former Minister of Land Reform and Management Dambar Shrestha, CPN-UML Vice-chairperson Bishnu Paudel, and Supreme Court sitting Justice Kumar Regmi.  The Commission for the Investigation of Abuse of Authority (CIAA) has already confirmed that the transfer of government land to individuals began during the tenures of Nepal and Bhattarai. Shrestha served as the land reform minister during Nepal’s premiership, and later, Paudel’s son Nabin Paudel bought land in the Lalita Niwas premises.

Even SC Justice Regmi purchased land there.  The CIAA’s charge-sheet stated that the decisions made by Nepal and Bhattarai’s cabinets regarding the Lalita Niwas land case were collective policy decisions beyond their jurisdiction. According to the CIAA, Paudel and Regmi are not under its radar as they have pledged to return the land. However, the Nepal Police Spokesperson, Deputy Inspector General (DIG) Kuber Kadayat, mentioned that the CIB is investigating the case for forged documents and fake governmental stamps, not solely relying on the CIAA’s corruption investigation. “We, hence, don’t rely on CIAA’s investigation and nab everyone who is involved,” he says.

The CIB has already apprehended ten individuals, including Min Bahadur Gurung, the owner of Bhatbhateni Supermarket, and Sudhir Kumar Shah, a former election commissioner, in relation to the Lalita Niwas land grab case. The other individuals arrested were Kaladhar Deuja, Hupendramani KC, Surendra Kapali, Dharma Prasad Gautam, and Gopal Karki. Deuja, KC, and Kapali were released shortly after their arrest following a Supreme Court interim order that instructed authorities to investigate the individuals without holding them in custody. As of now, the CIB has nine individuals in their custody in connection with the Lalita Niwas scam. However, these seven individuals are not the only ones accused in this case.

The CIB has a list of over 400 suspected individuals.  There are concerns that individuals should not evade punishment simply by returning unlawfully acquired property. The public has also expressed concerns about avoiding politicization of the case and ensuring a thorough investigation leading to punishment for the culprits.

Sharada Prasad Trital, the coordinator of the committee formed to study the Lalita Niwas land grab case, stated that the government land was systematically divided and distributed among individuals as if it were a gift. “The CIB has uncovered substantial evidence indicating potential involvement of individuals associated with political parties and their leaders, raising concerns about potential pressure on the police and the court to influence the investigation,” he says. Trital emphasized the need for impartiality and a conclusive outcome in the investigation, asserting that immunity should not be granted based on political affiliations. Both former prime ministers Nepal and Bhattarai have publicly proclaimed their innocence in this case.

Bhattarai took to Twitter to assert his innocence and stated that his cabinet made decisions following legal and ethical procedures, including on the Lalita Niwas land issue. Nepal has also been defending himself, claiming the allegations against him are false and has even said that he is ready to face punishment if found guilty. Former Nepal Police DIG

Hemanta Malla Thakuri says that no matter how much the police try to nab the so-called big fishes, without the support of the government, it is going to be difficult. “Nepal Police is just a small unit of a large system of Nepal which is driven by politics, bad politics actually,” he says. “All the political parties and media should pressurize the government for a better probe.”

Under the provisions of the Organized Crime Act, individuals found guilty of organized crime may face imprisonment of up to five years or a fine of up to Rs 500,000. Since the Lalita Niwas land grab case involves interconnected criminal activities, the police believe it falls under the purview of the Organized Crime Act. The severity of the punishment will depend on the level of involvement of each implicated individual. In cases of organized crime, the police have the authority to detain the accused for a maximum of 60 days to gather evidence, whereas the maximum detention period for other offenses is 25 days. Through collusion among leaders, high-ranking officials, and the land mafia, 143 plots of government land in Lalita Niwas were fraudulently registered in the names of individuals.

The tax on cigarettes in Nepal is the lowest in South Asia. At a time when the government is putting a 13 percent value-added tax (VAT) on daily essentials like potatoes and onions, it did not increase the tax on cigarettes significantly in the budget for the fiscal year 2023/24. Compared to most countries in the world, taxes on tobacco and cigarettes are very low in Nepal. The government only increased the tax on cigarettes by three percent. In this context, Pratik Ghimire of ApEx talked to Anjana Lamichhane, research associate at Nepal Development Research Institute (NDRI).

Despite the continuous lobbying, the government didn’t impose high tax on tobacco products. Why do you think so?

The current tax rates imposed on tobacco products in Nepal remains considerably low compared to neighboring countries and international recommendations. In the previous two years, the government had raised around 50 percent (25 percent in 2021/22 and 20 percent in 2022/23) excise duty and 20 percent increase in health hazard tax. But this year, the government has increased excise duty on tobacco products by a paltry 3 percent, bringing the total tobacco tax to 41 percent. However, it is lowest in South Asia as India and Sri Lanka impose significantly higher taxes, accounting for 53 percent and 77 percent of the retail prices, respectively.

The World Health Organization (WHO) recommends a minimum taxation of 75 percent to effectively discourage tobacco consumption.  There has been no increase in the Health Hazard Tax this year. When accounting for the estimated inflation for the upcoming fiscal year, the overall percent of tax will decline to 39 percent from the 41 percent, further hampering the recommendations and needs. Despite our heightened lobbying efforts this year—surpassing the efforts made in the past five years—the government has failed to significantly increase the tax. It is difficult to ascertain the exact reason behind this unexpected turn, as the government had assured us to impose higher taxes on tobacco. The government’s decision has caught us off guard and left us puzzled.

Do you see a nexus between the government and tobacco-related businesses in this matter?

I can’t say because I have no proof. Despite our efforts, the government is reluctant to impose a higher tax rate on tobacco-related products, which means the government may have come under pressure from some quarters. These things should be researched and truth must be uncovered as the high prevalence of tobacco use, coupled with the associated health risks and economic costs, demands urgent action.

Is an increase in tax the only way out to reduce tobacco consumption?

The WHO came up with the ‘MPOWER’ formula in 2008. It is a comprehensive plan comprising six essential and effective strategies for tobacco control. These strategies are: M (Monitoring tobacco use and prevention policies), P (Protecting individuals from tobacco smoke), O (Offering assistance to quit smoking), W (Warning about the hazards of tobacco), E (Enforcing bans on tobacco advertising, promotion, and sponsorship) and R (Raising taxes on tobacco). Among these, taxation plays a key role in effective tobacco control. It will take a couple of years for visible results to emerge. Tobacco is consumed by people of any background in Nepal and if the tax is increased, not everyone can afford it easily.  Increasing tobacco tax rates can have other positive effects as well. For example, it can generate substantial revenues for the government, which can be utilized to fund various development projects, improve public services, and health care, among others. 

How will this impact us?

Tobacco use poses a significant public health problem with far-reaching consequences. The affordability of tobacco products has contributed to a persistently high prevalence rate (of around 32 percent) among the population. This has led to increased mortality and morbidity from non-communicable diseases in Nepal, with an estimated 37,529 tobacco-attributable death in 2019 alone. Notably, tobacco use accounts for two out of every 10 deaths (19.4 percent) and stands as the second leading cause of death in Nepal. Also, tobacco use entails substantial economic costs, estimated at around Rs 40bn in 2022.

What are your recommendations for the budget of fiscal year 2023/24?

The Ministry of Finance must increase the excise duty on tobacco by at least 40 percent by amending the budget for the fiscal year 2023/24. A 40 percent hike in excise duty can generate an additional Rs 8.7bn to Rs 10.7bn in revenue, equivalent to approximately 2.3 percent of the forecasted budget deficit for 2023/24. Such an increase can lead to a consumption reduction of 2-6 percent.  Alternatively, a more ambitious target of a 65 percent increase in excise duty will generate revenue of Rs 13.1bn to Rs 16.8bn. It is equivalent to over 3.7 percent of the forecasted budget deficit for the fiscal 2023/24. This move can reduce tobacco consumption by about four to 12 percent.  These measures will significantly reduce damage resulting from tobacco use—both to public health and the national economy.

Once again, China has claimed that Pokhara International Airport (PIA) is a project under its Belt and Road Initiative (BRI), raising eyebrows in Kathmandu.  Despite Nepali leaders’ repeated assertion that this is not a BRI project, China continues to put it under the BRI which is likely to cause diplomatic friction between the two countries. However, the Ministry of Foreign Affairs remains mum about China’s latest claim. The ministry has not sent any diplomatic notes to China, seeking a clarification. 

Under the BRI, Nepal has proposed nine projects but there has not been any progress on it. At the same time, the BRI implementation plan is yet to be finalized. In this scenario, experts say, it is not appropriate to list all projects built under Chinese loan or grant under the BRI framework.  China’s claim clearly shows its desperation to push the BRI project in Nepal, says Vijay Kant Karna, foreign policy expert. 

Amid a program held after the first international plane landing at the PIA on Wednesday, Chinese Ambassador to Nepal Chen Song claimed that the airport is under the BRI project. He said that the airport was designed and built by a Chinese company which was made under the BRI project. While Nepal signed the BRI project in 2017, the contract for the airport project was signed in 2014. Luo Yan, chairman of the China CAMC Engineering Co Ltd, and Ratish Chandra Lal Suman, then director general of Civil Aviation Authority of Nepal, had signed the contract worth $215.96m.

On 21 March 2016, China Exim Bank and the Government of Nepal signed a government concessional loan (GCL) agreement worth RMB 1.37bn for the Pokhara International Regional Airport Construction Project. Twenty-five percent of the loan value (RMB 355.9m) was provided without interest and with a maturity period of 20 years and a grace period of seven years. The remaining 75 percent of the loan value (RMB 1.02bn) was provided at a two percent interest rate, 20-year maturity period and a seven-year grace period. 

While inaugurating the airport on 1 Jan 2023 too, the Chinese embassy had claimed it as a part of the BRI project. Karna says that this is a result of poor diplomacy of Nepal. “China is facing a dilemma because it couldn’t manage the BRI projects in Nepal,” he says. “China has now started claiming random projects as BRI out of desperation.” After four attempts to contact Foreign Ministry spokesperson Sewa Lamsal for comments failed, ApEx called up assistant spokesperson, Paras Pandit, who suggested contacting spokesperson Lamsal once again. The fifth call yielded no different result.