Despite the issuance of prohibitory orders to confront the second phase of pandemic, which is said to be more injurious than the first phase, Nepal has not remained as quiet as earlier and the last couple of months have been interestingly eventful, fluidity on the political front being the major contributing factor. It would be interesting to delve a bit into the past before discussing the current scenario. After the resurrection of the House by the Supreme Court (SC), Prime Minister Oli failed the floor test on May 10 as28 members belonging to Nepal\Khanal faction of his party (UML) and 12 members of Janata Samajbadi Party (JSP) led by Upendra Yadav abstained. As jointly demanded by Nepali Congress (NC) president Deuba, Maoist Centre (MC) chair Prachanda and JSP co-chair Yadav, urging the president to initiate the process of forming a coalition government, President Bhandari gave political parties until 9 pm (May 13, 2021) to lay their claim for forming a new coalition government under Article 76(2) of the constitution. Notwithstanding the solid decision of NC to back Deuba to lead the next coalition government, support extended by Prachanda and expected support from Nepal\Khanal-led faction of UML and JSP faction led by Yadav, the parties could not stake claim to form a government in the given time, clearing way for the President to appoint Oli, leader of the largest party, as the prime minister under Article 76(3) of the constitution. President also asked parties represented in the House to stake claim to form the new government under Article 76(5) of the constitution by 5 pm on May 21, on the recommendation of the caretaker government led by Oli who was not prepared to seek another trust vote as the situation was not different from that existed on May 10. Although political parties and legal experts had serious reservations about the very short time given and legality of the move to ask parties to form a government under Article 76(5) at a time when Oli had not resigned or lost the trust vote a second time, Deuba approached the office of the President on time with signatures of 149 parliamentarians in his pocket. On arrival, they were informed that Oli had also submitted his claim little earlier, showing support of two parties (UML and JSP) consisting of 153 lawmakers. The two letters sent to the President’s office by Oli and Mahantha Thakur urging the office not to give validity to the signatures of the lawmakers of their two parties, 26 and 12 respectively of UML and JSP who had supported Deuba, provided a pretext for President Bhandari to disapprove both claims. Indeed, May 21 was an eventful day which saw numerous inter and intra-party meetings held both formally and informally, telephonic conversations between top leaders belonging to different parties, conspiratorial small group meetings and the surprising move of Oli to stake a claim, contrary to his announcement made at 12 noon that day. This eventful day was followed by a night of high drama, which saw the President keeping her office open well beyond mid-night to approve the mid-night decision of the Cabinet to dissolve the House (one more time in less than 6 months) and have mid-term polls. Expectedly, this dramatic move created lots of hue and cry but Prime Minister Oli proceeded ahead, turning a deaf ear to challenges coming from different corners.He expanded his Cabinet twice and continued to make appointments to several constitutional bodies and missions abroad, often resorting to different ordinances that got almost automatic approval of the President. In addition to problems related to running of the government, Oli had problems keeping his own party intact since long and lately, the rival faction in the party had insisted on a written agreement to revive the party committees and structures that existed prior to UML’s merger with MC.They also remained adamant about not withdrawing support given to Deuba in the case against House dissolution. In the midst of divergent views and many leaders still finding Oli conspiratorial, a 10-member taskforce formed to reconcile differences was revived and after several rounds of initial inconclusive meetings, it succeeded in clinching a unity deal, which included amongst others, the revival of all party committees and structures that existed before UML’s merger with MC and that all party activities and decisions taken after March 7,the day House was reinstated, will be nullified if they were against party unity. This is definitely a positive development implementation of which could be difficult. Indeed, politics in Nepal is very much instable and in addition to UML, other political parties are also facing destabilizing problems. NC seemed solidly unified in proposing Deuba to lead the next government but there is every possibility that differences related to the FourteenthGeneral Convention could take alarming proportions to convulse the party anytime soon. Further, with co-chairpersons of the JSP (Thakur and Yadav) expelling each other from the party and Thakur faction having supported Oli and Yadav faction backing Deuba, things look unmanageable in this party.It is undeniable that other political parties have also contributed to the existing fluid political situation but people cannot just help pointing a finger of accusation towards the ruling party and its leadership for failing to manage the country and the party even when the government continued to enjoy near two-thirds majority in the House for about 3 years. It is disheartening that numerous writ petitions were filed in the SC, challenging Oli’s controversial style of managing state affairs.

A total of 146 members of the dissolved House filed a petition at the SC, challenging the dissolution and urging the apex court to appoint Deuba as prime minister. President Bhandari, a titular head without any discretionary power, is vehemently attacked by the press. People argue that Bhandari and Oli worked hand-in-glove to breach the constitution. It is also said that Oli’s style of functioning has soured a bit the pleasant relationship that existed between two state organs. Indeed, the apex court has already stayed the implementation of the Citizenship Act Amendment Ordinance, issued a day after dissolving the House basically to placate the Thakur\Mahato faction of JSP. Another political blow suffered by Oli was on June 22 when the SC, in response to a writ petition, stayed the induction into the government of 20 ministers, leaving him with only four ministers. It may be interesting to note that Oli had reshuffled his Cabinet retaining only 4 ministers and inducting 8 ministers and 2 state ministers from jSP on June 10, just two days after the SC issued a show cause notice on the expansion of June 4 by the caretaker Prime Minister. Another crippling blow delivered by the judiciary pertains to an SC verdict that nullified decision of the hugely expanded Central Committee of the UML party, renamed as the Tenth General Convention Organizing Committee, to sack 4 rebelling members in Karnali provincial assembly, stating that the body created had no legal standing. This verdict rejuvenated a bit the struggling rival faction led by Nepal\Khanal and many observers feel that parallels could be drawn between this decision, which has politically weakened Oli, and the early March verdict of SC that nullified unification of the two parties(UML and MC), very uncomfortably placing Prachanda and Nepal, more specifically Nepal who found the verdict a bolt from the blue and had to struggle hard to put himself back on track to proceed with the continued battle against his formidable rival. Looking at these verdicts of the SC made over the last couple of months and the associated rise or fall in political influence alternately of the rival groups of UML, one is tempted to imagine the two factions sitting on each end of a see-saw, going up and down as desired by the court. The ultimate blow that Oli received was on 12 July when the apex court not only reinstated the House, twice in about 4 months but ordered the President’s office to appoint Deuba prime minister by the evening of 13 July and fixed 18 July deadline for convening the House session. The resurrection of the House was very much expected but directing the concerned to appoint Deuba, specifying the time, was a pleasant surprise even to NC\Deuba supporters. Deuba took the oath two hours later than the stipulated time because of the controversy over the contents of the appointment letter.

The SC probably may not be happy to be loaded with many political cases because these bring along lots of hassles such as the ones seen in the recent formation of the constitutional bench, which looked a bit complicated in the beginning, with divergent opinions coming not only from the lawyers involved but also from Justices who appeared publicly divided and went on record to express their disgruntlement on the issue. It was good that the issue subsided with the inclusion of senior most justices in it. Understandably,PM Oli also began to come down heavily on the SC in recent days and his supporters have taken to the street against its latest verdict, probably forgetting that SC, with some problems of its own making and accusations by see-sawing politicians, may not in future succeed in giving solutions to political problems. The ailing economy has also to be saved from sustaining irreparable damage.

In the midst of controversy about the size and timing of the budget, the budget for the new fiscal year 2021\22 (2077\78) was unveiled by the government through an ordinance, meeting the constitutional deadline. Contrary to the urging of many to bring a modest budget, the caretaker government made public a huge annual plan with an outlay of Rs. 1647.57 billion, which is 11.73 percent larger than the on-going budget (Rs.1474.64 billion) and is higher by 22.52 percent if the reviewed figure of Rs 1344.68 is taken into account. With priority accorded to battling the pandemic, revenue collection target (Rs.1024 billion) is just enough to meet the recurrent expenditure of Rs.1004 billion- Rs.678.61 billion kept as recurrent expenditure, Rs.386.71 billion and Rs.325.74 billion as equalization grant andRs.60.97 billion as a conditional grant to lower level governments. Funds under social security head have gone up by 33percent, which undoubtedly is not a bad thing to do, provided the government has the capacity to do so. The government also intends to borrow around Rs. 559 billion (Rs. 250 billion from internal source) and expects to collect Rs.63.37 billion as grant. Talking of foreign assistance, it is a well-known fact that the portion of grant has continuously decreased in the last couple of years, compared to the loan portion, which is a direct result of our very low grant utilization capacity, about 39 percent in the last couple of years. With declining direct foreign investment, unsatisfactory level of capital expenditure (about 60 percent this year) and the budget failing to address the problems of medium and small enterprises through specific stimulus packages, the wished growth of 6.5 percent is very unlikely to be achieved. Further, the devastating Covid-19 and our highly instable politics are certain to continue inflicting serious injury on our economy next year as well. We wish experienced Deuba luck in achieving political stability and paying some attention to the economy to arrest its deterioration.