Provincial governments across Nepal are preparing to allocate billions of rupees for projects selected by lawmakers in the upcoming fiscal year, continuing a practice that critics say bypasses a Supreme Court ruling that halted the Constituency Development Fund.

The apex court ruled against the Fund amid widespread misuse. Although the court stopped the Constituency Infrastructure Development Programme, commonly known as the lawmakers’ development fund, from fiscal year 2023-24, several provinces have continued allowing lawmakers to influence budgets by recommending projects for annual spending plans.

Sudurpashchim, Karnali, Lumbini and Bagmati provinces are preparing to incorporate projects chosen by provincial assembly members into the budget for fiscal year 2026-27, as in previous years.

Sudurpashchim allocates Rs2.23 billion

The Sudurpashchim government is preparing to earmark Rs2.23 billion for projects selected by lawmakers in the upcoming fiscal year 2026-27.

According to the Chief Minister’s Office, directly elected lawmakers have been allocated a project ceiling of Rs50 million each, while proportional representation lawmakers have been allotted Rs30 million each. The 53-member provincial assembly consists of 32 directly elected and 21 proportional representation members.

Lawmakers have been instructed to submit lists of projects matching their respective allocations.

“Members are free to propose projects of their choice,” said a ruling Nepali Congress lawmaker, speaking on condition of anonymity. “We have been asked to submit projects of of to Rs50 million.”

The province followed a similar arrangement in the current fiscal year, allocating Rs50 million each to directly elected lawmakers and Rs30 million to proportional representation members. In the previous year, the allocations stood at Rs40 million and Rs20 million respectively.

The Supreme Court suspended implementation of Sudurpashchim’s constituency development fund in fiscal year 2023-24, when the provincial government earmarked Rs30 million per lawmaker. Before the ruling, successive governments openly distributed funds to legislators under various development programmes.

Questions have long been raised about the transparency of projects recommended by lawmakers. Critics accuse legislators of directing funds towards small, fragmented projects designed to reward supporters and strengthen political patronage networks.

“Lawmakers tend to push projects aimed at their own supporters,” said Prabhuram Chaudhary, a resident of Bhajani. “It is often unclear how projects are selected or who truly benefits. It feels like decisions are made through political connections.”

Provincial lawmakers have repeatedly argued that they lack meaningful authority over development planning and budget allocation despite being elected representatives.

As pressure mounted ahead of budget preparation, the Ministry of Economic Affairs and the Ministry of Physical Infrastructure Development temporarily suspended public meetings. A notice posted at the ministries’ main entrances said meetings had been halted due to the ministers’ workload.

Undersecretary Dhan Bahadur Rokaya acknowledged that the ministry had faced growing crowds seeking approvals for local projects and budget allocations. Chief Minister Kamal Bahadur Shah has also said the upcoming budget will exclude projects costing less than Rs2.5 million.

Lumbini expands lawmakers’ role

The Lumbini provincial government has asked provincial assembly members to recommend projects worth Rs40 million each for inclusion in next year’s budget.

The move has triggered criticism from local governments, which argue that project selection should be based on recommendations from municipalities and rural municipalities rather than individual lawmakers.

Local leaders say lawmakers have effectively been given discretionary authority over projects worth Rs40 million. They have demanded equal treatment and warned against encroachment on local government powers.

Several local governments have warned that they may refuse to cooperate with implementation if lawmakers continue to intervene in project selection.

In the current fiscal year, directly elected lawmakers representing Lumbini’s 52 constituencies were authorised to recommend projects worth Rs37.5 million each, while proportional representation lawmakers received project ceilings of Rs11 million.

For the upcoming fiscal year, the government plans to increase those ceilings to Rs40 million for directly elected lawmakers and Rs20 million for proportional representation members.

Lumbini has followed similar practices since fiscal year 2022-23, building on an approach first introduced under former chief minister Shankar Pokharel in 2019-20.

The province’s 35 proportional representation lawmakers have repeatedly accused the government of discrimination, arguing that they should receive allocations equal to those of directly elected members.

Last week, a delegation led by Deputy Speaker Menuka Khand KC met Chief Minister Chet Narayan Acharya seeking larger allocations for proportional representation lawmakers.

Acting in her capacity as coordinator of the Lumbini Province Women Lawmakers’ Network, KC urged the government to increase funding for projects recommended by provincial assembly members.

“The government itself is discriminating against provincial lawmakers,” she said. “This disparity must end, and equal allocations should be provided.”

Under provincial guidelines, lawmakers may recommend projects in education, health and agriculture. Individual projects must be worth at least Rs2.5 million.

The provincial government is preparing to allocate roughly Rs2.08 billion for directly elected lawmakers and Rs700 million for proportional representation members under the scheme.

Of the 87 provincial assembly seats in Lumbini, only 83 are currently occupied. Local government representatives have criticised the programme, saying lawmakers often prioritise projects that serve political supporters rather than genuine development needs.

“Since local governments are responsible for implementation, project selection should also come from local governments,” said Bishnu Kumar Giri, chair of the Lumbini chapter of the National Association of Rural Municipalities. “Political interference in project selection has repeatedly caused implementation problems and forced budget returns, ultimately hurting citizens.”

Provincial government spokesperson and Health Minister Ramji Ghimire defended the policy, arguing that lawmakers maintain direct links with voters and are well placed to identify local priorities.

“Lawmakers remain closely connected to the people and understand smaller local needs,” he said. “Although lawmakers recommend projects, implementation remains the responsibility of local governments and requires coordination with them.”

Bagmati prepares over Rs4 billion in lawmaker-selected projects

The Bagmati provincial government has also set project ceilings for lawmakers ahead of the 2026-27 budget.

Directly elected lawmakers have been asked to submit projects worth Rs50 million each, while proportional representation members have been assigned ceilings of Rs30 million.

The province is preparing to channel more than Rs4 billion through projects selected by its 104 serving provincial lawmakers.

Six of the Bagmati province’s 110 assembly members had resigned to contest the March 5 parliamentary elections. Those who resigned include Yubaraj Dulal, Prakash Shrestha, Aman Kumar Maskey, Kundan Raj Kafle, Basanta Manandhar and Sunil KC.

Despite the vacancies, the provincial government is preparing to allocate more than Rs4.3 billion for projects selected by lawmakers.

A senior official at the Ministry of Economic Affairs and Planning said the budget framework has already been drafted, setting ceilings of Rs50 million for each directly elected lawmaker and Rs30 million for each proportional representation member.

“The budget has been prepared based on allocating Rs50 million to directly elected members and Rs30 million to proportional representation members,” the official said.

According to ministry officials, Bagmati has followed a similar model in previous years, effectively replicating the structure of the now-defunct lawmakers’ development fund. Provincial lawmakers were formally asked to submit project proposals within their allocated ceilings for inclusion in the next fiscal year's budget.

Officials involved in budget preparation said many lawmakers have already submitted project lists, while others are still in the process of doing so.

Projects recommended by lawmakers will be entered into the province’s project bank through implementing agencies under the relevant ministries. Under provincial guidelines, infrastructure projects must be worth at least Rs5 million and social sector projects at least Rs3 million to qualify.

A provincial assembly member said the government has requested project proposals worth Rs3 billion from 60 directly elected lawmakers and another Rs1.32 billion from 44 proportional representation members.

Provincial government spokesperson and Minister for Economic Affairs and Planning Prabhat Tamang denied that lawmakers were being given direct control over budget allocations.

“We have not distributed budgets to lawmakers,” he said. “They have merely been given options to prioritise projects in their constituencies. Their input is being sought to help determine which projects from the project bank should receive priority.”

Lawmakers dominate development spending in Karnali

In Karnali province, lawmakers have long exercised significant influence over budget allocation and project selection.

Provincial assembly members not only hold formal authority to recommend projects funded by various ministries but also engage in intensive lobbying ahead of each budget cycle to secure projects for their constituencies.

Under provincial procedures governing project selection, any project worth more than Rs5 million must first be registered in the provincial project bank before it can be included in the budget.

District-level recommendation committees, chaired by the senior-most directly elected provincial lawmaker in each district, are responsible for screening projects. The committees include provincial assembly members, district coordination committee chiefs and deputy chiefs, and local government chairs and vice chairs, while heads of sectoral government offices serve as member-secretaries.

Only projects endorsed by these committees can proceed through ministries and ultimately enter the project bank, according to Ashok Nath Yogi, a member of the Karnali Provincial Planning Commission.

Local sectoral offices register project proposals submitted by ward offices, municipalities and lawmakers between mid-July and mid-December. After conducting field inspections and preliminary screening, qualifying projects are forwarded to district committees by the end of January.

“The district recommendation committees, which are formed under the leadership and participation of lawmakers, send project lists to ministries by mid-March,” Yogi said. “The commission then includes those projects in the project bank before they are prioritised and incorporated into the budget.”

Yogi argued that projects selected and monitored with lawmakers’ involvement have delivered stronger results.

However, critics disagree.

Civil society activist Narendra KC said lawmakers have become deeply entrenched in every stage of the process.

He said lawmakers control the process because they lead the committees that select projects, adding that they are involved from the paperwork stage to the final selection. “Lawmakers are part of every step, from submitting project forms to selecting them,” he said. “The project bank system has further increased their control over development planning.”

Pitambar Dhakal, former dean of Mid-West University, said lawmakers’ strong influence over development projects has increased financial disorder. He said that under the former infrastructure development fund, lawmakers received limited budgets and used them to meet supporters’ expectations. “After the court scrapped that programme, lawmakers have gained more control over development planning,” he said. He added that the introduction of the project bank has, however, reduced the role of middlemen.

Officials involved in budget preparation say political pressure intensifies every year.

“The biggest pressure comes from lawmakers themselves,” said an undersecretary at the Ministry of Economic Affairs and Planning. “About a week before the budget, many officials feel compelled to switch off their phones. We also tighten access to ministry buildings. Even now, lawmakers crowd the ministry almost every day.”

Ministry spokesperson Chetan Kumar Timilsena defended the process, saying district-level recommendation committees that include lawmakers are helping facilitate project selection as per the guidelines. “They operate strictly within the procedures,” he said. “Since they are in direct contact with the public, they are also familiar with local needs, which makes the recommendation process easier.”

Former chief minister and provincial assembly member Raj Kumar Sharma said the project bank has made budget selection more transparent, systematic and evidence-based.

“Lawmakers are not the only actors involved,” Sharma said. “Technical offices conduct evaluations and prioritise projects. The committees simply recommend projects that meet the established criteria.”

Another lawmaker, Kal Bahadur Hamal, said provincial lawmakers play a constructive role in overseeing and monitoring development projects through the district recommendation committees.

Karnali’s provincial assembly has 40 members, including 24 directly elected and 16 proportional representation lawmakers.

By fiscal year 2023-24, the province had allocated Rs6.52 billion under infrastructure development and special infrastructure programmes linked to lawmakers, of which Rs5.4 billion had been spent.

Karnali began allocating funds through a provincial infrastructure development fund in 2018. During the first three years, the province spent Rs1.6 billion annually, providing Rs40 million to each lawmaker. Under former chief minister Jeevan Bahadur Shahi, the model was revised to allocate Rs40 million to directly elected members and Rs10 million to proportional representation lawmakers.

However, a Rs1.12 billion allocation made under the programme in fiscal year 2023-24 was never implemented after the Supreme Court halted the scheme.

Karnali’s budget for the current fiscal year stands at Rs32.99 billion. The provincial government is preparing a budget of roughly similar size for the coming fiscal year.

Minister for Economic Affairs and Planning Rajeev Bikram Shah said ministries have been given spending ceilings about one percent higher than those in the current fiscal year.

“Ministries are now in the final stages of budget preparation,” Shah said. “We hope the budget will meet public expectations.”