A Letter from Karnali (November 2022)

Kuda Karnalika

  • The inability to spend the budget as planned seems to be a pervasive problem in Nepal. Karnali government has spent only 7.63 % of the total budget within the first quarter of the current fiscal year. During this period, only 11.1% of the recurrent budget and 5.33% of the capital budget could be spent. With the objective of learning what ails the budget process and what possible interventions could bring improvements in the current state of budget expenditure, Hriti Foundation is studying the budget-making process and its implementation at the provincial and local levels
  • The simplest solution to economic growth and employment generation problems is the establishment of industries. But the program to build the industrial area in Karnali is stranded.  The “one district one industry and one local level one industrial village program” could not be enforced. Challenges are arising in terms of finding land with the set criteria for the establishment of industries and industrial villages in any district. Different policy and practical hindrances meant that industries could not be established even in Surkhet which happens to have the highest potential for the establishment of industries. It is often said that there are a lot of possibilities in Surkhet in the agricultural sector. Despite these possibilities, the agriculture sector is not booming, courtesy of different reasons. Given the situation, Hriti Foundation conducted a study on land use alternatives in Surkhet Valley in 2021. We found that there are better prospects of profit in other sectors than agriculture in Surkhet.
  • In recent times, issues relating to the management of street vending in the major cities of Nepal have been gaining prominence. The Constitution has provided the right relating to the management of footpaths and local markets, and tax collection therefrom, to the local governments.  There were about 700 street vendors in Birendranagar in 2019. However, the current data of the municipality shows only 220 street vendors. Hriti Foundation has published a research paper regarding the situation of street vending businesses and the reasons for desertion. We found that the lack of policy initiatives for the management of the street vendors and the recurring obstacles from the municipality are the main reasons for desertion.
  • Karnali lags behind Nepal in terms of incorporation and functioning of business enterprises. According to the economic survey 2022/23 A.D, Karnali hosts only 4.64% of the total number of business enterprises in Karnali. Of businesses that have secured permission for foreign investment, only 1.62% of small-scale industries, 2.12% of medium-scale industries, and 1.25 % of large-scale industries are located in Karnali. Hriti Foundation is continuously advocating for necessary policy reforms toward creating a favorable business environment in Karnali.
Parliament Watch:
  • We have recently observed the second round of federal and provincial elections after the adoption of the federal system in Nepal.  In Karnali, 24 members have been elected through the First Past the Post (FPTP) method and 16 will be elected through the Proportional Representation (PR) system.  Four members of the provincial assembly have been re-elected. All 24 provincial assembly members elected under the FPTP method and all 12 federal parliament members elected from Karnali are males. This is a very worrying sign from the point of view of inclusion.
  • The first batch of elected representatives of the Karnali provincial assembly has completed their tenure which lasted 4 years 7 months and 10 days. During this period, 215 meetings were concluded in 10 sessions. 53 bills were passed through these meetings. These bills were certified by the Chief of the province and are now in implementation.  Hriti Foundation has been studying and keeping surveillance on the activities of the members of the provincial parliament. 12 participants of the Pre-Professionals Parliamentary Support Program (PPSP) are working as knowledge assistants of the MPs of Karnali. These participants will also work as knowledge assistants to the newly elected MPs.
What we are doing
  • Hriti Foundation is organizing the 4th edition of Karnali Utsav – Kuda Karnalika ( A Festival of Ideas) from Feb 17 to 19, 2023 at Birendranagar, Surkhet. More than 70 speakers will participate in the discussions on the development and progress of Karnali in 15 different sessions. The call for a volunteer is now live. To know more about Utsav, you can visit.
  • We, at the Hriti Foundation, believe that individual economic freedom and entrepreneurship are the drivers of economic growth. In order to celebrate and promote this spirit, we are organizing a non-residential Liberty workshop for two days at Surkhet on December 16-17 in collaboration with the Language of Liberty Institute.
  • Hriti Foundation has prepared the research paper based on the following concerns: How many budgets have been allocated to different areas, which areas have been prioritized, and which areas have not received priorities? What was the status of the recurrent budget and capital budget? What was the budget allocation trend of local government? This study includes 16 local governments (11 rural municipalities and five municipalities) of Karnali province.

Until next time,

Dinesh Gautam
Executive Director