Budget deadlock paralyzes Koshi’s Itahari & Dharan

KATHMANDU: As the new fiscal year nears its first month, two of Koshi Province’s major urban centers, Itahari and Dharan, remain trapped in a budget deadlock.

The failure to pass crucial budgets has brought local services, development projects, and financial management to a grinding halt, sparking alarm among residents and governance experts alike.

Under Nepal’s Local Government Operation Act, local bodies are legally mandated to finalize their annual policies, programs, and budgets by end of Ashar.

However, political infighting, leadership disputes, and internal power struggles have pushed both Itahari and Dharan into an unprecedented ‘budget freeze,’ undermining administrative functions and stalling development.

Itahari’s budget battle: Lack of transparency sparks opposition

In Itahari, a rift between Mayor Hemkarna Paudel of the Nepali Congress and executive members affiliated with the UML party has led to a standstill.

During a city assembly meeting held on Ashar 32, attempts to approve the budget without detailed financial schedules were vehemently opposed by several executive members, who argued that passing a budget without clear allocation plans would be irresponsible and could invite misuse of public funds.

Deputy Mayor Sangita Chaudhary stressed the need for transparency, saying, “Without detailed schedules showing which programs receive what funding, and clear tax and expenditure breakdowns, we cannot approve the budget. Approving an incomplete budget risks financial mismanagement.”

Itahari proposed a budget of approximately Rs 2.55 billion for the current year — with around Rs 1.3 billion earmarked for capital investments and Rs 1.04 billion for operational expenses.

Despite this, policy approval and budget implementation remain stalled, contrasting sharply with last year’s ambitious Rs 3.57 billion budget.

Dharan’s Deadlock: Mayor & deputy mayor at odds

Meanwhile, Dharan’s budget process has been hampered by internal disputes between Mayor Harka Sampang, an independent, and Deputy Mayor Aindra Bikram Beghabi.

Disagreements over labor contribution issues and budget limits have delayed finalizing the budget, leaving city administration in a near-standstill.

Local officials indicate that final budget discussions are underway, with expectations to release a budget exceeding Rs 2 billion within the next few weeks. “There is no ongoing conflict now, and preparations are in the final stages,” said Dharan spokesperson Surya Bahadur Bhattarai.

Public services disrupted, credibility at stake

The budget impasse has severely disrupted payment of contractors, operation of consumer committees, employee salaries, and routine public services in both cities.

Analysts warn that persistent political rivalries and factionalism are eroding public trust and impeding effective governance.

While other local governments across Koshi Province successfully passed their budgets on time and moved forward with development initiatives, the prolonged budget crisis in these two key urban centers is an alarming setback for the province’s progress.

Experts call for urgent political consensus and greater cooperation among local leaders to restore functionality and fulfill citizens’ expectations for timely services and development.