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US President Trump says India, Pakistan have agreed to full, immediate ceasefire. US President Donald Trump said that India and Pakistan have agreed to a full and immediate ceasefire.

Trump announced the ceasefire from his account on the Truth Social Platform. “After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a full and immediate ceasefire,” he said.

“Congratulations to both countries on using common sense and great intelligence,” he added. Both India and Pakistan have confirmed that two countries have reached an agreement. 

Indian Foreign Secretary Vikram Misri said that Pakistan’s actions over the last few days are being seen as “provocative and escalatory”. Speaking in the press conference, Col Sofiya Qureshi further said during the briefing that Pakistan tried to attack air base in Punjab. Col Qureshi also said that Pakistan military is observed to be moving their troops to border areas. Apart from targeting military bases, Pakistan also targeted medical facilities in Srinagar, Avantipura and Udhampur, Qureshi said on Saturday morning.

The Indian foreign secretary reiterated India’s commitment to non-escalation provided it is reciprocated by the Pakistan military. Misri also refuted Pakistan’s claims of missiles being fired at religious site and termed it “ludicrous”.

Pakistan’s foreign minister said Saturday that if India stops its escalatory actions, so will Islamabad. “If there is an iota of sanity, India will stop and if they stop, so will we,” Foreign Minister Ishaq Dar said on camera while speaking with a local TV station. Pakistan said Saturday that India launched missiles at key military bases, including a base close to the capital Islamabad. Shortly after, Pakistan’s military said it had launched an operation against India in retaliation to those latest strikes.

With less than two months remaining in the current fiscal year, the government has managed to spend only 32.78 percent of its allocated capital budget. This chronic underperformance in capital expenditure is not new. Rather, it is part of a concerning pattern that has plagued the national development trajectory for years.

The failure to effectively utilize the capital budget affects Nepal’s economic prospects. In the last fiscal year, only 63.47 percent of the Rs 302bn capital allocation was spent. Worse still, capital spending has averaged around 60 percent over the past four years, a steep decline from the pre-covid average of 70 percent and a sharp fall from highs of over 80 percent in 2017-18. These figures reflect a system that struggles with efficiency, planning and execution.

The consequences of low spending are multifaceted. On the surface, infrastructure development is delayed or left incomplete. More deeply, low capital spending restricts job creation, depresses local economic activities and drives a surge in labor migration. The country’s inability to create sufficient employment opportunities has forced millions to seek work abroad. This clearly shows that the domestic economy is not growing fast or inclusively enough.

The root causes of this underperformance are well known. Bureaucratic delays, poor project readiness and ineffective implementation continue to hit development projects. Moreover, a recurring trend of accelerated spending in the final months of the fiscal year leads to rushed projects and compromised quality, which affects project outcomes and diminishes the long-term value of public investments. While recurrent expenditures are being met at a higher rate, capital spending has remained dismal. This imbalance not only undermines developmental aspirations but also affects fiscal credibility and the government’s ability to deliver on its promises at a time when some sections of society are questioning the relevance of the federal republican system. 

The government must prioritize structural reforms to speed up spending. Streamlining bureaucratic procedures, strengthening project planning and financial oversight and directing funds toward shovel-ready projects are critical steps that it must take. Moreover, enhancing accountability mechanisms will ensure that public resources are used effectively and transparently. Persistent underutilization of capital budgets is not just a fiscal statistic, it is a roadblock to progress. Until this foundational flaw in public expenditure stays, long-term growth will remain elusive, and the dream of a self-reliant, prosperous Nepal will continue to drift further away.

The coalition government of the Nepali Congress (NC) and CPN-UML has unveiled its annual policies and programs without any major disagreements between the two parties. Parliamentarians are currently deliberating on the policy document, with some NC leaders expressing reservations, noting that certain core agendas of the UML appear to have been prioritized. Historically, the annual program and budget have often sown discord among coalition partners. Lawmakers are now offering their suggestions on the policy document. Meanwhile, the main opposition, CPN (Maoist Center), has expressed dissatisfaction, particularly over the omission of several projects previously announced by Pushpa Kamal Dahal.To preempt potential tensions over the budget, Finance Minister Bishnu Paudel has begun consultations with NC leaders, while also continuing dialogue with the Maoist Center.

A recent friendly exchange between Prime Minister KP Sharma Oli and Maoist Chair Dahal has sparked speculation, with some political analysts predicting a possible collaboration between the two communist parties. However, the UML leadership has concluded that recent efforts to destabilize the government have lost momentum. Some believe that while the NC is negotiating with the government over key positions, Oli is attempting to increase his leverage by adopting a conciliatory approach toward Dahal.

Meanwhile, Dahal’s repeated overtures to the NC have failed to yield meaningful results. NC President Sher Bahadur Deuba reiterated this week that there are no significant problems within the coalition. On the delay in appointing the Governor of Nepal Rastra Bank, Deuba attributed it to internal issues within the NRB, denying any inter-party disagreement. His remarks come amid reports suggesting that disputes over the appointment could strain the coalition—an argument supported by past experiences where minor issues, rather than ideological differences, led to the collapse of alliances.

The ongoing pro-monarchy protests have weakened significantly, though royalist parties and allied groups continue to mobilize. Buoyed by an increase in supporters, former King Gyanendra Shah has been meeting royalist forces to encourage continued protests. Learning from the violent March 28 protest in Tinkune, the former king now appears to be backing political outfits such as the Rastriya Prajatantra Party (RPP). The pro-monarchy movement under Navaraj Subedi has announced an indefinite protest beginning May 29. Subedi has managed to bring RPP Chairman Rajendra Lingden, RPP-Nepal Chairman Kamal Thapa and Keshar Bahadur Bista into his fold—an unexpected development, given Lingden’s earlier reluctance to accept Subedi's leadership. This comes against the backdrop of a meeting between Shah and RPP leaders.

Relations between the NC and China, strained since 2015, are slowly improving. After a prolonged hiatus, senior NC leaders are visiting China at the invitation of the Communist Party of China (CPC), which appears to be stepping up its outreach. This week, NC President Deuba, senior leaders Shekhar Koirala, Shashank Koirala and others attended a photo exhibition on Nepal-China ties. At the event, Deuba reaffirmed NC’s commitment to the one-China policy and pledged that Nepali soil would not be used for anti-China activities—messages well received by the Chinese side.

Prime Minister Oli has also continued efforts to make appointments to transitional justice bodies. This week, he met with Dahal to discuss the matter, but no significant progress was made. Sources close to the discussions admit that the appointments are complex, with divisions not only among political parties but also among conflict victims and various domestic and international stakeholders. Home Minister Ramesh Lekhak has said the government is committed to addressing victims’ concerns. However, Nepal’s human rights community—seen as having a significant stake in the process—is often accused of obstructing progress due to personal or institutional interests.

Nepal has stepped up security across border areas, airports and other sensitive zones in response to escalating tensions between India and Pakistan. The situation intensified after India launched “Operation Sindoor,” conducting airstrikes on nine terrorist sites in Pakistan and Pakistan-administered Kashmir following the April 22 terrorist attack in Pahalgam, which killed 26 people, including one Nepali citizen.

In other developments, the United States has announced an 85 percent cut in USAID programs, citing a shift to align foreign aid with American strategic interests. The US has started transferring the remaining programs that match its revised priorities. In Nepal, the future of the Millennium Challenge Corporation (MCC) remains uncertain, and the US has not clarified the status of remaining USAID-funded projects.