A lot of the discussion on the new budget has hinged on taxes. But the fact that it allocated more money for debt servicing than for capital expenditure is a much more stark indication of the state of the economy.&nbsp;
The government earmarked Rs331 billion to pay back domestic and external loans and interests, higher than Rs320 billion set aside for capital expenditure. In essence, this means there will be less money for health, education, or infrastructure.&nbsp;
In fact, the government plans to borrow Rs240 billion in internal loans, but will be spending over Rs275.79 billion paying off old debt.
With falling tax revenue unable to cover expenses, more than a quarter of the budget is now borrowed from outside and within the country. Public debt as a proportion of GDP before the earthquake was 22%, now it has exceeded 42%.&nbsp;
Read also: <a href="https://www.nepalitimes.com/here-now/nepal-s-tax-system-widens-rich-poor-gap">Nepal’s tax system widens rich-poor gap</a>, Ramesh Kumar
“We are falling into a domestic debt trap, we have reached a point where we are having to borrow more money to pay our debt,” warned former finance minister Yubaraj Khatiwada. “Alternatively, the government’s capacity to spend on development is now weaker.”
According to the Public Debt Management Office, Nepal’s total public debt has exceeded Rs2.15 trillion. Of this, domestic debt is Rs1.08 trillion and the other half is foreign loans. In 2015, domestic debt as a proportion of GDP was 8.1% and foreign debt was 14.2%. By the end of December 2022, this ratio increased to 19.9% and 22.7% respectively.&nbsp;
Government housing grants post 2015 earthquakes, implementation of financial mechanisms within the federal system including building of new infrastructure, and the Covid-19 pandemic have been blamed for the increase in public debt. Wanton expenditure by successive ruling parties has also played a hand.&nbsp;
“The expenditure will increase now that the internal bonds taken by the government have matured and the repayment period has started,” says Finance Ministry spokesperson Dhaniram Sharma. During the pandemic, the government had requested donors to postpone loan repayment period by a few years. We have now passed that grace period.&nbsp;
Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial
On the other hand, the government has started to raise more domestic debt through development bonds since 2018/19. This will lead to an increase in the amount earmarked for interest and capital repayment, further diverting resources from development. &nbsp;
In the financial year 2022/23, the government allotted Rs.609 billion for development and Rs.188 billion for the payment of interest on loans. This fiscal year, the development budget has shrunk by 23%, while debt repayment increased by a whopping 76%.&nbsp;
“Because all of this is costing the government more money, it is raising the debt of the market. Now what this does is create a situation where only a few in the private sector can manage to get loans,” says Khatiwada.
Foreign loans from donor countries, agencies and multilateral organisations are concessional in nature, meaning they have an affordable interest rate of less than 1%. Many of these loans have a repayment period of up to 40 years. For example, the government has taken a loan of about Rs16 billion from the Japanese government to build the Nagdhunga tunnel. The interest rate of such a loan taken for 40 years is only 0.01%
Read also: <a href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank">Some are more equal than others</a>, Anil Chitrakar
However, internal borrowing is expensive. As soon as the interest rate of loans of banks and financial institutions increases, the government also has to borrow more expensively. According to the Public Debt Management Office, the average interest rate on bonds is 10.30%, up from 5.75% in 2017, primarily due to the lack of investable funds in the financial system.
“Internal debt is an invisible tax imposed on the common man. As the internal debt increases, the government starts looking for ways to generate income to pay it. As a result, taxes are added to goods and services used by citizens,” says former secretary at the Finance Ministry Rameshore Khanal.
But in addition to paying off instalments of the old loans, the Finance Ministry is also under pressure to increase salaries, social security allowances and other expenditure obligations. As such, the government has started imposing higher tax rates to increase its income. Nepal is already one of the countries with the highest tax rates in South Asia. Revenue makes up 22% of Nepal’s GDP.&nbsp;
More than half of the country’s annual budget is being spent on salaries, administrative expenses, social security, subsidies, etc., so the government relies on debt to raise resources for development. Large budget and distribution-oriented programs in turn have further increased the internal debt. Experts say loans should be taken only for priority areas and for productive sectors that can repay the amount.&nbsp;
Says economist Pushkar Bajracharya: “Otherwise, taking out loans and spending them indiscriminately will only further burden the future generation of our people.” &nbsp;
Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar

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Till debt do us part

<img width="640" height="452" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171144/6369368a9c7e80680e03fde7jpeg.jpg" alt=""/>We see signs of stalled development all around us, every day, all over Nepal. Dusty, half-finished highways, national pride projects like Tama Kosi and Melamchi delayed by decades, crumbling infrastructure. Where there is economic activity, it is usually extractive, and happening at great cost to the environment — exposing corruption and lack of accountability of those in authority.All this has become such a given in present-day Nepal that citizens do not even bother to complain anymore. Since they do not expect anything from their elected leaders, the people are not even outraged by this lack of performance. Public fatalism and a high threshold for punishment has let politicians and bureaucrats off the hook, and encouraged impunity.At the root of this deep malaise <a href="https://archive.nepalitimes.com/article/editorial/government-to-governance-editorial,4200" target="_blank" rel="noopener">is poor governance</a>. And the starkest proof yet of political failure is that in the first quarter of the current fiscal year, the central government has been able to spend only 11% of its budgeted capital expenditure. The situation in the seven provinces is even more alarming: with one-fourth of the fiscal year finished they have spent less than 1% of their development budgets. Even the relatively better-governed Gandaki Province has only spent 5% of its budget in four months, and even that is mostly to cover overheads.It is a supreme irony of our times that a strong government led by a monolithic Communist Party with no political opposition in sight, and one which has made prosperity its main slogan, should be so incompetent. Like in any business, it is a sign of good governance when a state maximises revenue, minimises running costs and prioritises development expenditure. Capital spending in productive sectors helps the economy by creating jobs, spurring development, and augmenting growth.Read also: <a href="https://www.nepalitimes.com/banner/roadblocks/" target="_blank" rel="noopener">Roadblocks</a>, Ramesh KumarAt present we have got it upside down. In fact, the government’s own statistics show that in the first four months of this fiscal year, current account expenditure (for salaries, day-to-day costs of running government) was three times higher than capital spending. All this goes to prove once more that Nepal is not poor, it is just poorly governed.To be sure, this is nothing new. Even in the bad old days of the absolute monarchy, Nepal had a <a href="http://archive.nepalitimes.com/article/editorial/Beggars-and-choosers,1338" target="_blank" rel="noopener">chronic problem of not spending</a> its budget. This persisted after the democratic changes in 1990, and usually it was blamed on unstable coalition politics. In the past 12 years after the war ended, the excuse for the inability to spend has been the rocky political transition.How long are we going to pretend that we are in perpetual transition? If a government with a two-thirds majority cannot get its act together, which government will? We now have political stability, the peace process is over, and governance has been decentralised to seven provinces and 753 elected municipalities. Still, the reasons for the woeful inability to get projects off the ground are manifold. They mostly stem from a lethargic political and bureaucratic class that is loath to sanction any project unless there is direct personal benefit. Then, there are structural issues like convoluted approval processes, red tape within and between line ministries, delays in issuing and selecting tender bids, and the culture of spending most of the budget in the last two months of the fiscal year in order to maximise kickbacks and payoffs. This points to a systemic defect in the state structure that has not been corrected by improved accountability and performance of elected governments. The lack of visionary leadership at all levels of government means there is no one to untie the knots and untangle the nexus between a rent-seeking state and private greed. Home Minister Ram Bahadur Thapa started off vigorously to try to dismantle transportation cartels, others promised speedy service delivery and expediting delayed projects. Most people have even forgotten what was promised. One year after they were installed, even elected local governments which want to get projects off the ground have been stymied by Singha Darbar <a href="https://www.nepalitimes.com/editorial/fear-of-letting-go/" target="_blank" rel="noopener">refusing to let go of the purse strings</a>. The impact of capital budgets not being released has unleashed another credit squeeze in the <a href="https://www.nepalitimes.com/opinion/banks-biting-off-more-than-they-can-chew/" target="_blank" rel="noopener">banking sector</a> that is reeling under a liquidity crisis. It has slowed job creation and encouraged outmigration. At this rate we will not meet the 8% growth target for this year. The rot is deep and the solution is a structural overhaul of governance. But the buck stops with the Prime Minister. It is he who will be blamed for failing to deliver even with such a strong majority government.

Communist capital

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221107171136/636934779c7e80680e03dff9jpeg.jpg" alt="" width="1400" height="1069"/><figcaption>Bhanu Bhattarai</figcaption></figure>Nepal’s banks have once more entered the dark tunnel of scarcity of loanable funds. Commercial banks have misinterpreted the monetary environment for three years in a row -- they lend aggressively during the first quarter, and run out of steam thereafter until the final quarter of the fiscal year.The seeds of the trouble were sown five years ago. As the IMF puts it in its most recent South Asia Regional Update, ‘Loose monetary conditions, along with a fourfold increase in banks’ paid-up capital in the two years to mid-2018 required by the Nepal Rastra Bank (NRB), have fueled a strong credit expansion. Private sector credit growth has averaged 22% (y/y) in the past two years, even as the NRB maintains ceilings on banks’ loan-to-deposit ratio and the loan-to-value ratio on car loans.’Nepal’s financial landscape is heavily skewed towards banking. According to a recent World Bank report, banks account for 87% of financial sector assets in Nepal. Private equity and venture capital space are still in nascent stages. The <a href="https://www.nepalitimes.com/banner/why-the-private-sector-is-spooked/" target="_blank" rel="noopener">private sector</a> thus largely depends on bank debts, and in their absence, businesses have had to postpone plans or slow down operations. This has resulted in increased cost or lost opportunities.Recurring <a href="https://www.nepalitimes.com/here-now/crunching-the-numbers-on-credit/" target="_blank" rel="noopener">credit crunches</a>, which last several months every year, have impacted the economy as a whole. Key responsible parties here are:<ul><li>Government of Nepal for its inability to spend on capital expenditures</li> 	<li>NRB for instigating the crisis and then offering regulatory forbearance that encourages banks to push prudential boundaries</li> 	<li>Banks which appear to be driven with the sole objective of servicing increased capital</li></ul>Nepal’s economic growth over past two decades has been largely led by the private sector, in spite of ineffective governments and inefficient bureaucracy. Banks should refrain from pointing fingers at NRB or the government. The NRB has not always been pro-active, its regulatory approach has often been ‘one step forward two steps back’. The government’s norm has always been to bulk up capital expenditure towards the end of the year. We want NRB and the government to be more responsive, but it will be a gradual process at best. And frankly, the banking business has thrived even in this environment, so let’s be reasonable.Read also: <a href="https://archive.nepalitimes.com/regular-columns/guest-editorial/banking-crisis-explained,1096" target="_blank" rel="noopener">Banking Crisis Explained</a>, Suman JoshiAs the most transparent sector of the economy, the onus is on the banks collectively to manage public perception and repair the community’s battered image. Here’s a list of items they need to consider:1. Anticipate better, and get your basics right. Will the market offer sufficient new deposits to fund growth in loan books? Nepal may be more stable politically, but with compromises from bureaucrats and politicians, it will be a while before their Key Performance Indicators align with Nepal’s aspirations for rapid economic growth. It is unrealistic, this early, to expect government spending to veer from tradition to follow a desired timeline that match banks’ need for new deposits.2. Who is winning that debate in the boardroom? Most banks appear to have adopted a strategy to grow lending books aggressively to meet shareholder expectations of return on equity. The impact of this on their lending behavior is worrisome. What is the quality of loan assets banks are booking when they are expanding at 22% while the economy grew at 3-4% annually over last few years? Also the continued contribution of banks to real estate buoyancy may someday come back to haunt them. Excessive reliance on real estate as collateral has affected a loan officer’s approach to lending. Under the current loan loss provisioning norms and multiple banking context, it is possible to keep masking bad loans, which raises doubts about quality of profits. The IMF has singled out this challenge and suggests: ‘Rapid credit growth underscores the need to accelerate banking sector reforms. Building on the recent amendments to the regulatory framework, loan classification, provisioning, and banks’ risk management practices should be upgraded.’3. Is it possible that many banks have bitten off more than they can chew by expanding their operations and branch network rapidly? Frequency of operational risk events suggests that quality of human resource and internal control mechanisms need significant improvement.Banks have finally acknowledged the need to adopt digital channels of delivery. Better late than never. Even so, there is little chance of sufficient investment happening here. It is not enough to link bank systems to a digital payment platform. A key driver for consumer uptake is a cultural shift within individual banks to champion digital banking services.Read also: <a href="https://www.nepalitimes.com/banner/nepals-budding-e-commerce-ecosystem/" target="_blank" rel="noopener">Nepal's budding e-commerce ecosystem</a>, Sikuma RaiClearly, Nepal is an over-banked economy with smaller banks struggling to stay relevant. Industry experts agree that there is a case for reduction in number of banks. Market prices are currently at interesting levels for more capable banks to consider acquiring other institutions. It may be easier said than done, but if there is an industry-wide resolve, the ducks will line up.Suman Joshi is a former banker and Founder and Chairman of True North Associates, a private equity firm.

Banks biting off more than they can chew?

Recent outrage in Sikkim over an Indian Army expedition climbing <a href="https://nepalitimes.com/here-now/saving-kangchenjunga">Kangchenjunga</a>, the world’s third-highest peak, has spiked attention to the need to balance mountaineering jobs with indigenous reverence for sacred landmarks. Kangchenjunga (8,586m) is not a peak as much as it is a mountain range with 16 peaks above 7,000m on the border between India and Nepal -- the word itself means ‘five treasures of the snows’ in Tibetan. Some of the highest prominences like Kangchenjunga West and Kangbachen are in Nepal, while the Main, Central and South Peaks are on the border. Climbing the peak from the Indian side has been banned since 2001 because the indigenous Lepcha community there regard the mountain as the abode of Dzoe-nga, the patron deity of Sikkim, which was an independent Himalayan Kingdom until it was annexed by India in 1975.&nbsp; Buddhists in Sikkim say their saint, Padmasambhava, recognised the mountain as a protective spirit. The state has declared the base of the mountain Kangchenjunga National Park, which covers an area one-third of Sikkim. ‘The act of scaling this sacred peak is not only a matter of serious concern but also a violation of both the prevailing legal provisions and the deeply held religious beliefs of the people of Sikkim,’ read a letter from Chief Minister Prem Singh Tamang (Golay) to Amit Shah, India’s Minister of Home Affairs and Cooperation.&nbsp; Tamang continued: ‘We further request Your Honour to take up the issue with the Government of Nepal to ensure that no future expeditions are permitted on the sacred mountain, in deference to the deeply held beliefs and cultural values of the people of Sikkim.’ Kangchenjunga was climbed for the first time exactly 70 years ago by a British team who told King Tashi Namgyal, the Choegyal of Sikkim, that they would not set foot on the summit. Since then, there have been about 532 successful climbs of the peaks and 52 have died while trying.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250628060616_5c268e08cf49f36b79ef9b31933fc2d9bf9a6f65414e7ca06dd028bf04e7ccc1.png" data-media-id="editor_1" data-image-id="20250628060616_5c268e08cf49f36b79ef9b31933fc2d9bf9a6f65414e7ca06dd028bf04e7ccc1" data-rendition-name="original" width="1782" height="1178" loading="lazy" alt="Kangchenjunga: too sacred to climb NT"> <figcaption>Indigenous communities in Sikkim held purification ceremonies following the Indian expedition to Kangchenjunga. Photo: THE VOICE OF SIKKIM / FACEBOOK</figcaption> </figure>  <a href="https://nepalitimes.com/here-now/peak-climbing-season-2025-s4abrxny">This spring climbing season</a> alone, there were 70 climbing permits for foreigners issued for Kangchenjunga by the Nepal government, and made it to the top while one French climber died.&nbsp; One of the expeditions this year was an Indian Army team led by Col Ranveer Jamwal, who has summited the highest peaks on all seven continents, and Mt Everest thrice. Jamwal’s team was on the final leg of a ‘<a href="https://economictimes.indiatimes.com/news/india/nimas-summits-mt-kangchenjunga-concludes-historic-har-shikhar-tiranga-mission-successfully/articleshow/121341315.cms?from=mdr">Har Shikhar Tiranga</a>’ (The Tricolour on Every Peak) mission to plant the Indian flag at the highest points of each of India’s 28 states. Kanchenjunga was the last peak they had left, and the hardest, but the expedition put five climbers on the summit. What seems to have incensed the Sikkimese is that while it has banned climbing the mountain from its side, it was an Indian military expedition that went to Nepal to climb the mountain. After news broke of the climb in May, the Sikkim Indigenous Lepcha Tribal Association asked people to observe purification ceremonies in temples across the state. Mayalmit Lepcha of the association acknowledged that the Sikkim government was also partly at fault: “I don’t think such an expedition could have gone forward without the state government being informed, so it could have done something to intervene. It shows weakness. What’s done is done, all we can do is carry out these sanctification ceremonies.”&nbsp; In 2000, one year before Sikkim’s ban, the state allowed an Austrian team to attempt Kanchenjunga’s northeast face for a fee of $20,000, on agreement that they would stop 10m before the summit. Despite this, there was outrage over the expedition on the grounds that it violated Indian laws regarding the defiling of religious sites and Sikkim’s rights to maintain its culture after merging with India. The Indian Army expedition was also seen to have circumvented Sikkim’s law and violated religious sensibilities by going through Nepal. While the team may have thought they were respecting Sikkim’s beliefs by finding a way to complete the mission, the people of Sikkim saw it as defilement.&nbsp; The somber mood of the Sikkim people at the ritual contrasts sharply with Jamwal’s sense of accomplishment. “Without a doubt, the most difficult summit of my life,” he told reporters after the climb. “It tested every ounce of our will.”&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250628060616_ccfe079c78dab788d19fe2080ee8a5d5dcb11de4157316f6d94e5964da097157.jpg" data-media-id="editor_4" data-image-id="20250628060616_ccfe079c78dab788d19fe2080ee8a5d5dcb11de4157316f6d94e5964da097157" data-rendition-name="original" width="787" height="377" loading="lazy" alt="Kangchenjunga: too sacred to climb NT"> <figcaption>Prayer flags along the Sikkim-Kangchenjunga trekking route. Photo: TREKKINGININDIA.COM</figcaption> </figure>  The <a href="https://nepalitimes.com/news/the-rise-and-fall-of-nims-purja">controversial Nepali-British mountaineer Nirmal Purja</a> was also on Kangchenjunga this spring the mountain, on a mission to summit all 14 8,000m peaks for a third time. He echoed Jamwal about the tough conditions: “The conditions above camp were extremely tough, with deep snow and challenging terrain—more crevasses than usual.” Nepal’s government has not said anything publicly, but it is unlikely that it will ban climbing on Kangchenjunga, since it is becoming popular with expeditions because of its technical challenges, and overcrowding on Mt Everest. Nepal does have bans in place for some of its mountains out of respect for local beliefs. <a href="https://nepalitimes.com/banner/to-open-machapuchre-for-mountaineering-or-not">Mt Machapuchre</a> (6,990m) the imposing pyramid that looms over Pokhara, for example, is seen as an icon of purity by the Gurung people and a symbol of Vishnu by the Hindu communities who live at its base. A strict climbing ban has been in place since 1957, when a British expedition led by Col Jimmy Roberts stopped 45m short of the summit – either because the last bit was too difficult or out of deference to local sentiments.&nbsp; Khumbila that stands above Namche Bazar is only 5,761m high, but like Kanchenjunga is considered the protector deity of the Sherpa people. Gauri Shankar on the Nepal-China border, called Chomo Tseringma by the local community, was off-limits between 1965 and 1979 due to its association with Lord Shiva and Gauri, his consort. Although expeditions are now allowed, there are not too many takers. In Tibet, climbing Mount Kailash is prohibited by the Chinese government because it revered by the Hindus, Buddhists and followers of the Bon faith. Even Mt Everest is regarded as sacred, and its Sherpa name is Chomolungma, Goddess Mother of the Earth.&nbsp; Economically, climbs on Kanchenjunga bring in decent revenue. This climbing season, the 41 permits, at $1,800 each, brought in $73,800. This is somewhat comparable to Makalu, Lhotse, and Annapurna I, but these numbers are dwarfed by the $4 million in <a href="https://nepalitimes.com/news/the-everest-industry">Everest permits</a>. Revenue from Kanchenjunga climbing permits is something Nepal could potentially forgo if necessary, but the expeditions also provide jobs to hundreds of high altitude guides, porters, base camp support staff and other logistical costs.&nbsp; As the third highest mountain in the world and the tallest in India, there will always be significant motivation to climb it from the Nepal side, especially as climbers are drawn by the technical climbing at high altitude.

Kangchenjunga: too sacred to climb?

The debate about who is less accountable to the public: politicians or bureaucrats is as old as Nepal’s democracy itself.
Some blame politicians for being beholden to the businessmen who finance their electoral campaigns, and are forced to return the favour with contracts and kickbacks when in power.&nbsp;
Others say it is civil servants who are neither civil nor servants, and know the inner workings of the system to exploit loopholes – they then teach ministers, MPs, mayors, or ward chairs which juicy projects can be squeezed. And everyone gets their share.
In reality, it is probably not a case of either, or. Both have their hands deep in the honey pot. Corruption is now such a given that yet another exposé in the mainstream press, like the latest visit-visa scam, does not raise eyebrows anymore.
We may have to edit Lord Acton’s famous quote to say that in Nepal we do not even need absolute power to corrupt absolutely. The ruling cartel has divvied up the spoils, so that no one ever faces charges. The three parties all know about the skeletons rattling in each other’s closets, and they cancel each other out.
Politicians and bureaucrats get all the blame for taking bribes, but what of the givers of bribes? In this crony capitalism, businesses invariably need political patrons in an elaborate <a href="https://nepalitimes.com/here-now/nepals-only-growth-industry-private-sector-corruption" target="_blank">national network of give-and-take</a>.
<a href="https://nepalitimes.com/here-now/nepals-only-growth-industry-private-sector-corruption" target="_blank">Politicians and businesses work hand-in-glove</a> so that conflict of interest in contracts, insider trading, cartelling, and non-performing assets of banks become the norm. Our survey after the 2017 local election showed that out of the 753 newly-elected local government chairs, <a href="https://nepalitimes.com/news/elected-contractors" target="_blank">nearly 300 were contractors</a> involved in sand-mining, quarrying, or transportation syndicates.
Nepal’s tycoons have discovered that instead of donating to election war chests of politicians, it is a much surer return on investment to spend the money to <a href="https://nepalitimes.com/news/the-business-of-politics-in-nepal" target="_blank">become legislators and politicians themselves</a>.
In democracies, there are checks and balances to control corruption when it becomes endemic. The Nepal Police and Central Bureau of Investigation (CBI) are supposed to do the detective work without political interference. The courts are required to be independent in dispensing justice and punishing crooks.
But the less said about the judiciary the better. A writ petition in the Supreme Court last week accused our sister magazine <a href="https://www.himalkhabar.com/" target="_blank">HimalKhabar</a> of contempt of court for two stories: one about how high courts have been overturning a majority of verdicts of district courts in cases of rape, and another about the Biratnagar High Court clearing a self-proclaimed holy man, Krishna Bahadur Giri, of rape despite police presenting physical evidence.
The doctrine of the separation of powers stipulates that it is when the other three pillars in a democracy are compromised that the role of the free press becomes even more vital. The world over, as soon as populist autocrats are elected to the executive, their first order of business is to co-opt the legislature and the judiciary. Then they buy off, intimidate, or neutralise the media with Strategic Lawsuits Against Public Participation (SLAPP).
Nepal’s officialdom seems to be taking midnight Zoom lessons from other despots on how to gag the media. Last month, popular talk show host Dil Bhushan Pathak was served an arrest warrant by the Kathmandu District Court for <a href="https://www.youtube.com/watch?v=-CntsnTrtG8" target="_blank">a YouTube explainer</a> about the alleged involvement of the son of Foreign Minister Arzu Deuba Rana in a reported purchase of Kathmandu’s Hilton Hotel.
The Lalitpur District Court ruled that Pathak could not be arrested without fair trial, but this week the Kathmandu District Court filed another case against the journalist based on a complaint by the Cyber Bureau, and put him on a fugitive list.&nbsp;
Without going into the veracity of Pathak’s explainer, it is deeply problematic that the Electronic Transaction Act has been invoked – proof that politicians are getting the courts and investigating agencies to make an example of a high profile journalist.&nbsp;
The intention is to silence media investigations into the fake refugee scandal in which the main partner in the ruling coalition is implicated, and in which one of its former home ministers was jailed last year.
The Kathmandu High Court has been mysteriously active in targeting journalists these days. <a href="https://bizmandu.com/" target="_blank">Bizmandu</a> and <a href="https://nepalkhabar.com/" target="_blank">Nepalkhabar</a> were served a notice last month <a href="https://nepalitimes.com/news/no-freedom-after-expression-y4inku06" target="_blank">to withdraw a story they did</a> on the Chair of the <a href="https://www.sebon.gov.np/" target="_blank">Security and Exchange Board of Nepal (SEBON</a>) Santosh Narayan Shrestha allegedly demanding kickbacks from hydropower investors.&nbsp;
Incredibly, the court even asked the two portals not to report on the subject anymore – a ruling so absurd that the Patan High Court overturned it a week later.&nbsp;
The allegations against Shrestha were made in a public meeting of the <a href="https://www.ippan.org.np/members/3060/bungal-hydro-ltd" target="_blank">Independent Power Producers Association of Nepal (IPPAN)</a>, and MPs demanded a <a href="https://myrepublica.nagariknetwork.com/news/parliament-demands-probe-into-sebon-chairman-over-alleged-commission-demand-40-32.html" target="_blank">Parliament inquiry</a> into the regulator. <a href="https://www.himalkhabar.com/144523/santosh-narayan-shrestha" target="_blank">HimalKhabar</a> reported this week that while Shrestha was reportedly demanding commissions from private investors for IPOs, he cleared primary share sales in Bajhang’s 10.75MW <a href="https://www.ippan.org.np/members/3060/bungal-hydro-ltd" target="_blank">Bungal Hydro</a> in which his family members have investments, company records show.
And then just on Monday, bureaucrats hoodwinked MPs by deleting references in a bill requiring a two-year ‘cooling off’ period under which retiring civil servants could be barred from holding constitutional positions for two years.
The contest for who is more corrupt: bureauacrats, politicians, or the private sector is on.
Kunda Dixit

SLAPPing Democracy

The monsoon this year arrived on time, and brought life-giving rain — irrigating paddy terraces, recharging groundwater, reviving springs, and increasing electricity generation.
But Nepal has to deal with either too much water or too little. On a clear April day before the monsoon, the hills of Sindhuli district were parched, and there were wildfires burning out of control. There had been no rain for the past six months.
And that has been the perennial crisis for Nepal’s farmers: that 85% of the rainfall occurs during just four months of the monsoon with little rain for the other eight months.&nbsp;
The water crisis is related to the powerful changes sweeping the mid-hill region of Nepal. With better roads, higher incomes and more exposure, many residents now aspire to have the kind of water supply seen in urban homes. They want hot or cold water at the turn of a tap, showers and flush tank toilets.&nbsp;
To meet this rising demand, many local and provincial governments are investing in large water supply projects often by lifting water from rivers hundreds of metres down the mountain. But these new systems may not be sustainable in the long run.
Many villages in Sindhuli are switching from local springs to piped systems, and even in rural homes, overhead tanks are becoming common.
But this new convenience comes with big challenges. Lifting water from rivers far below requires long pipes, electric pumps, and constant maintenance. These systems are costly, and the streams themselves often shrink to a trickle in the dry months. Big water-lifting schemes look impressive, but there is doubt if they can meet growing water demand.
A much more sustainable solution would be what some communities are doing: restoring old ponds or build new recharge systems. But those villages are exceptions, in most places traditional ponds and wallows are being filled up to be turned into sports fields, or make way for buildings.
Where there are new ponds, they are sometimes in the wrong places or without proper design. Roads and drains are not engineered properly and have increased landslides and erosion. Water management in hilly areas is not just about building things, it is about building in the right way, in the right place.
Traditional water systems were based on nature. They were not perfect, but they used the land wisely. Ponds used to hold rainwater and slowly refill springs which supported families, farms, and forests.&nbsp;
Not everything worked well in the past, but we can learn from traditional water management practices. Across Nepal, some rural municipalities have launched campaigns to store monsoon runoff — either in tanks, ponds or by recharging the aquifers.
But not all efforts have been successful. Some ponds are built without any hydrological study. Some are rushed to meet deadlines rather than real needs.&nbsp;
Now, the Muhan initiative hopes to revive springs to make households more resilient and help farmings. With the financial support of the Australian Centre for International Agricultural Research, research is being done to understand how springs work and how they are affected by changes in rainfall, land use, and development.&nbsp;
Instead of just building pipes and tanks, the project maps the entire springshed so we can understand the root cause of water shortage. In Sindhuli, the problem is not the amount of rain, but the loss of natural systems that store it and the social systems that manage water.&nbsp;
Nepal’s towns and villages now face a major challenge: how to manage water all year round as demand rises with people’s living standards. Depending only on river-lift systems is not a sustainable solution.&nbsp;
We need a mix of approaches that help store water from the rainy season to make it available for the rest of the year, whether by directly harvesting rainwater, restoring ponds, managing springsheds, or smart management of demand.
Rural Nepal is also seeing dramatic depopulation. Much of the outmigration can be stemmed if there is easier water supply for agriculture and household use. Across the mid hills, villages are emptying because springs are going dry. Government policy needs to catch up with the reality on the ground, and support solutions that work for people and nature. Every water supply plan should include recharge structures. Every road or building project should consider water flow and erosion. Local governments need more than budgets: they need training, tools, and data.
Ngamindra Dahal is with the Nepal Water Conservation Foundation, Kathmandu. Hemant Ojha collaborated in this piece and is associated with the Australian National University.

Water for Life

<a href="https://nepalitimes.com/multimedia/the-last-of-the-kusunda">The Kusunda</a> are among the last remaining hunter-gatherer communities left in Nepal, and it has only one fluent speaker left of a language that is not related to any other language group in South Asia.&nbsp; The Kusunda call themselves the King of the Forests ((गेम्येहाक़ in Kusunda,वन राजा in Nepali) and used to have a nomadic lifestyle till recently. But decades of exclusion from mainstream society and modernity have forced the Kusunda to assimilate. &nbsp; Today, most Kusunda live across Nepal’s mid-hills and western plains, choosing to identify themselves as Thakuri and adopting names like Sen, Shahi, and Khan to avoid ostracisation. Over time, inter-ethnic marriages between the Kusunda and other communities became increasingly common.&nbsp; However, the assimilation with other communities also meant that almost no one from the Kusunda community can speak their mother tongue – considered by linguists to be a ‘language isolate’ not related to any other language group in the world, and lacking set rules of grammar that are foundational to other languages. There are no words for ‘Yes’ or ‘No’ in Kusunda, nor are there words to signify direction. There are 23 languages with less than 1,000 speakers listed in Nepal's 2021 census, with Kusunda being the language with the least number of speakers. The number of people who identified as Kusunda has decreased with each subsequent census. Only 253 individuals identified themselves as Kusunda in the last National Census of 2021, down from 273 in 2011.&nbsp; <div class="embed-block"><iframe src="https://creators.spotify.com/pod/show/raithane-bhakha/embed/episodes/Kusundas---the-last-of-the-forest-kings-e23ge6p/a-a9peei1" height="102px" width="400px" frameborder="0" scrolling="no"></iframe></div> The government’s decision to provide a social security stipend to the community for the past few years has prompted many from the Kusunda community to reclaim their identity and in the process, explore their culture and language. Kamala Sen Kusunda, who lives in Dang, is the only fluent native Kusunda speaker alive, although there are now other Kusunda and non-Kusunda people learning how to speak the language. By the time Kamala Sen Kusunda was born in 1975, her family had settled in a village in Rolpa. Although she did not experience the nomadic life of her forebears, she still roamed the forests freely as a child and many of the values and socio-cultural practices of her community were instilled in her and her siblings.&nbsp; This meant that Kamala grew up speaking Kusunda with her family. But by then, the Kusunda had increasingly begun to interact with people beyond their community, and inter-ethnic marriages had become a norm.&nbsp; Kamala herself married at 18 to a 52-year-old man from the Chhetri community. She would go on to have four children, but they were brought up with her husband’s culture and community rather than her own, and teaching them her mother tongue seemed impractical.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250628030648_afaa298bf8ea3b7086e2ed086b11eab463ef2b20a82a4aad74df3dd2e922a4c3.jpg" data-media-id="editor_2" data-image-id="20250628030648_afaa298bf8ea3b7086e2ed086b11eab463ef2b20a82a4aad74df3dd2e922a4c3" data-rendition-name="original" width="855" height="641" loading="lazy" alt="Kusunda NT"> <figcaption>Gyani Maiya Kusunda with Kusunda youth in 2015.</figcaption> </figure>  “If I had spoken my language to them when they were children, they would have learned,” she tells us ruefully. “But they were growing up in a different community, so I never pushed, and they never expressed interest.” At the time, she had other things to worry about, such as earning a livelihood and sustaining her family. To find work, Kamala and her family moved to Shimla in India, where she worked at an apple orchard for six years.&nbsp; Over the next years, Kamala and her family moved back and forth between India and Nepal for work, and Kamala was not actively conversing in the language of her people or being able to connect with members of her community now scattered across Nepal.&nbsp; Had she not forgotten her language after all those years? “How could I forget the language of my ancestors?” she replies. “Not speaking it did not mean that it ceased to be a part of me.”&nbsp; Kamala had been working at a brick kiln in Thimi seven years ago when the National Language Commission tracked her down, offered her a paid position as a Kusunda language consultant and source person for basic language training in Dang.&nbsp; It was there that Kamala met her cousin Gyani Maiya Sen Kusunda, the only other person able to speak Kusunda fluently, who had been working with the Commission to conserve Kusunda language and culture. It was also where Kamala met language researcher and lexicographer Uday Raj Ale. Ale had been in the middle of his research into the Tharu language and community 15 years ago when he met Gyani Maiya Kusunda’s son, who told him that his mother was one of the few people who spoke Kusunda, but that no one had shown an interest in studying and preserving the language and culture. Ale met Gyani Maiya, spending time with her learning and researching Kusunda. By 2017, Ale had collected enough words to put together a Kusunda dictionary. The Kusunda vocabulary currently comprises 2,000 words. His research into the Kusunda language and culture has taken him to every known Kusunda household in Nepal. Although the census puts the number of Kusunda at 253, Ale reckons there are only 158.&nbsp; “Kusunda language is endangered due to its lack of use in everyday life, literature, and religious and socio-cultural practices, as well as the prevalence of inter-ethnic marriages,” explains Ale. In 2019 the Language Commission began its language transfer programs for youth from indigenous communities. Since then, the Commission has completed multiple phases of Kusunda language classes in Dang facilitated by Uday Raj Ale. The classes have 20 students, not just from the Kusunda community, but also interested non-native students.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250626120632_c6c378bc00af450f2b7f0cf17af1c3b2b6f7b7226927c458c3e01ec389869d33.jpg" data-media-id="editor_3" data-image-id="20250626120632_c6c378bc00af450f2b7f0cf17af1c3b2b6f7b7226927c458c3e01ec389869d33" data-rendition-name="original" width="1485" height="1535" loading="lazy" alt="Kusunda NT"> <figcaption>Students learning Kusunda with instructor Uday Raj Ale (second row, left)</figcaption> </figure>  Khamba Rokaya, who worked as a caretaker for young Kusunda children in Dang, became interested in learning the language as she sat in with the children during their lessons, and for the last few years has been among the few non-native Kusunda language learners in Dang. “I am not from the Kusunda community, but now that I have learned the language, I hope to do my part to carry on the work and share my knowledge with as many people as possible,” she says. “One way to ensure that we preserve this language is to extend its speaker base, both within the Kusunda and non-native communities.” Ale and Kamala have continued to work together since Gyani Maya’s passing in 2020, expanding the Kusunda vocabulary and creating appropriate curricula to fit the needs of the students as their knowledge of Kusunda expands.&nbsp; But without any documentation of Kusunda history, the community’s traditions, stories, values and language were at risk of being lost to time. “The loss of an ethnicity, language or culture in a country is akin to losing a vital organ, and a unique perspective of looking at the world,” says Ale. Which is why Archive Nepal in collaboration with the British Council’s Cultural Protection Fund and the UK’s Department of Culture, Media, and Sport in February launched a book of creative writings in the Kusunda language titled पिन्डा (meaning ‘The First’ in Kusunda): A Compilation of Kusunda Literature. The book is a collection of informative essays about the Kusunda language and culture, short stories that explore themes from nomadic life to universal Nepali experiences of poverty and migration, letters to loved ones, as well as conversational pieces by five Kusunda students ranging from ages 16 to 30. The works in the Kusunda language are also translated into Nepali and English.&nbsp; “Language is an important part of ethnic identity, and our indigenous languages cannot evolve or be conserved unless they are spoken or taught,” said Ale during the launch of the book earlier this year. “But most importantly, language exists as long as there exists literature in that language.” Kamala was in Kathmandu for the launch of the book, and smiled proudly as she looked at the young writers who had contributed to the collection. She said: “I’m glad the young people have chosen to learn and preserve Kusunda. Otherwise, our language would have died with me.” &nbsp;