Authority without accountability: Deuba government’s blatant indifference to ‘financial crime’ by Finance Minister

Prime Minister Deuba’s reluctance to investigate the alleged involvement of an outsider to change tax rates in the fiscal policy by the Finance Minister shows accountability is at stake in Nepal.

NL Today

  • Read Time 4 min.

Kathmandu: Nepali Congress, a political party that claims to be the largest democratic force of the country, has been steadily losing its democratic image.

Under the leadership of its president Sher Bahadur Deuba, the country’s mechanisms to hold state actors to account for their actions have eroded. The Prime Minister himself appears to be deliberately protecting wrongdoers of his cabinet members for the sake of his personal gain.

Protection of alleged “financial crime” by Nepal’s Finance Minister Janardan Sharma, also a leader of radical communist party CPN (Maoist-Center), by the Prime Minister is a glaring case to show how rule of law has been diluted and wrongdoings are ingrained in the system.

What actually happened?

On 13 June, 2022, a Nepali vernacular daily Annapurna Post published a news report stating that the Finance Minister involved an outsider to change tax provisions in the budget draft just a few hours before the budget was presented in Parliament on May 29.

In the report, Annapurna Post has written that Sharma forced the Ministry officials to follow the instructions of an outsider–a former government officer–to make changes in the tax rates in the budget draft. The changes, according to experts, have benefitted certain business groups, and such changes eventually hit consumers.

It has been reported that Raghunath Ghimire, a former non-gazetted officer of the government, tweaked the tax rates at the behest of Sharma to benefit certain business groups. The report mentions that another Chartered Accountant (CA) was also involved in the process. But his identity is not yet revealed. 

What are the reactions?

Right after the news emerged, the government has been heavily slammed by experts, the general public and the opposition parties. 

Nepali Congress, who is leading the five-party alliance government, however, has maintained silence about the issue. Reportedly, Prime Minister Sher Bahadur Deuba has been backing the controversial move by the Finance Minister and has assured to safeguard his position. 

The alteration in the budget draft, according to experts and politicians, is a financial crime, and the Finance Minister should immediately step down from the ministerial post on moral grounds.

Speaking at the parliament, Surendra Pandey, a former finance minister said, “the Finance Minister should resign from the post on a moral ground. After facing a serious charge, the Finance minister is expected to clarify about it in the House. Even lawmakers of ruling parties have questioned his role in the alteration of tax rates and even after all these, he still expects to hold the post,” he questioned in a House Session.

Leaders from the ruling alliance are pretending as if use of outsiders in the fiscal policy preparation is nothing serious. Main opposition CPN-UML too has not created the pressure required to probe the alleged involvement of outsiders in the budget writing process.

“When the provisions require even the ministers and secretaries to put their communication devices in lockers during the discussions on tax rates in course of preparing the budget before it is presented in parliament, the Finance Minister has been accused of violating the norms by tweaking the tax rate in collusion with the unauthorized persons he brought with him,” he said.

Economist Keshav Acharya says the finance minister should have immediately resigned. “He should have resigned on moral grounds in the process of suspending the governor.” “But he did not. Now another serious issue has come into the light. If the news is true, Sharma should immediately step down.” 

A former government secretary on condition of anonymity told Nepal Live Today: “It is a crime, a financial crime. How can the alliance assure that a minister, who is always dragged into controversy, works for the benefit of the nation, and not for the benefit of certain groups? Sharma must be sacked if he doesn’ step down.” 

Main opposition CPN-UML has demanded a parliamentary probe into the matter, but it is less likely to happen given the Prime Minister’s reluctance even to discuss the matter. 

Likely repercussions

It is certain that the whole episode will have grave repercussions for the entire democratic value system of the country. Blatant disregard for the rule of law and failure to respect parliamentary process will result in a situation of anarchism, according to Dr Bipin Adhikari, constitutional expert and political analyst.

Maintaining absolute confidentiality of budget documents is a norm of our parliamentary system and it is a legal obligation too, he said. “Leaders who breach the norm of confidentiality should be held accountable.” According to him, the strategic silence and deliberate attempt of the Prime Minister to cover up serious allegations of financial crime by a cabinet minister is a very wrong precedent the Nepali Congress-led government is trying to set.

Either the PM himself should take responsibility for the entire process and defend the innocence of his cabinet member before the parliament or he should immediately pave the way for the fair and transparent investigation process by ousting the minister alleged to be involved in financial crime, he added. 

“The PM often takes an alliance government as an excuse for the compromise. It is, however, not justifiable. Same set of laws and rules apply to the government and ministers, whether they are part of the alliance government or single party one.”

If the allegations are not investigated and resolved properly, it will also send the message that our parliament as an institution is ineffective to ensure rule of law, he said.