Nepal ministers go unpaid as Maoists block budget

By Gopal Sharma

KATHMANDU (Reuters) - Nepal said on Friday it had no money to pay its ministers because parliament had failed to pass a new budget amid protests by the former Maoist rebels who dominate the legislature.

Maoists have disrupted parliament since July, preventing it from discussing the impoverished nation's new budget after a dispute over the firing of the army chief.

The stand-off means the Himalayan nation could see its administration shut down with the government eventually unable to pay even civil servants.

Finance Minister Surendra Pandey said government departments could not spend more than one third of total annual expenditure allocated to them before the new budget was passed.

"That limit for the salary of ministers is already over. They cannot be paid any more unless the budget is passed," he told Reuters.

The dispute also underscores the mistrust between the government and the Maoists, who waged a decade-long civil war until joining the mainstream under a 2006 peace deal.

They scored a surprise victory in last year's election and formed the nascent Himalayan republic's first government after the abolition of the 239-year-old monarchy.

But in May, Maoist chief Prachanda resigned as prime minister after President Ram Baran Yadav reversed a cabinet decision to sack army chief General Rookmangud Katawal on grounds that he had refused to take orders from the civilian government. Katawal has since retired.