Millenium Challenge Corporation (MCC) has become a burning political issue in Nepal. MCC is said  to be an innovative and independent U.S. foreign assistance agency that is claimed to lead the fight against global poverty. The corporation was created by the U.S. Congress in January 2004.

It is said that MCC provides time-limited grants promoting economic growth, reducing poverty, and strengthening  institutions. MCC's investments support stability and prosperity in partner countries, and along with that, the program also enhances American interests.

In the draft of Millenium Challenge Compact, Section 1.1, the objectives are mentioned as: 'The goal of this Compact is to reduce poverty through economic growth in Nepal, and ' …MCC’s assistance will be provided in a manner that strengthens good governance, economic freedom, and investments in the people of Nepal', is stated in the same part of the Section.

Similarly, in Section 2.1 (a) of the Compact, it is mentioned that an objective of the program is to 'increase electricity consumption by facilitating power trade and by improving the
availability and reliability of electricity supply in Nepal’s electricity grid; and by facilitating power trade'.

Likewise in 2.1(b) of the draft, 'maintaining road quality across the strategic road network' has been written as its another objective.

Regarding funding and resources for the program, it is stated in Section 2.1 of the compact that upon entry into force of that compact in accordance with Section 7.3, MCC will grant to the Government, under the terms of this Compact, an amount not exceeding Four Hundred Fifty-Nine Million Five Hundred Thousand United States Dollars, about 55 billion NRs, for use by the Government of Nepal to implement the Program.

Section 7.3 says,'This Compact will enter into force on the date of the letter from MCC to the Government in an exchange of letters confirming that MCC and the Government have completed their domestic requirements for entry into force of this Compact and that the conditions precedent to entry into force in Section 7.2 have been met to MCC’s satisfaction.

In Section 7.2, Compact's legal and procedural requirements, to be fulfilled by the Goveernment of Nepal before taking the compact into implementation, are mentioned.

Section 8.1of the Draft-Compact demands the Government of Nepal to ensure the full and expeditious cooperation of all relevant Government entities to ensure that all land acquisition, site access, and forest clearance required to implement the Compact is provided in a timely manner, and consistent with all MCC policies.

Similarly, the Compact contains 7 Anexxes starting with Annex I in which the programs and projects like Electric Transmission Project and Road Maintenance Projects, along with the beneficiaries of the projects, are widely described. The Electricity Transmission Project is claimed to benefit at least 23 million people that are currently believed to be connected to the electricity grid. Likewise, the Road Maintenance Project is told to benefit approximately 924,000 individuals spread over the local administrative units crossed by the proposed five road segments. In Annex I (c), the provision of establishing MCA-Nepal and forming a Board of Directors, including the Finance Secretary of the Ministry of Finance, is mentioned.

In Annex II, multi-year finnancial plan has been summarised, whereas, in Annex III, Compact Monitoring and Evaluation procedures are written. Annex IV demands to fullfil Conditions to Disbursement of Compact (CDF) stating that the Government (or MCA-Nepal) must have delivered to MCC an interim fiscal accountability plan acceptable to MCC, and a Compact CDF procurement plan acceptable to MCC emphasizsing that the Government should have provided a schedule and procedures, acceptable in form and substance to MCC.

Annex V of the draft places additional conditions to the Government of Nepal requiring to submit a plan, in form and substance acceptable to MCC, and consented to by the governments of India, memorializing (i) key financial and technical terms for the construction of the New Butwal-Gorakhpur cross-border transmission line, and (ii) operational principles for the New Butwal-Gorakhpur cross-border transmission line. It has also placed a demand to designate the Electricity Transmission Project as a National Pride Project.

Further in Annex VI, different terms and phrases used in the draft are defined.

Annex VII, the last Annex, has metioned about taxes from Schedule-A to Schedule-K. MCC has strictly demanded to exempt the bodies, individuals and goods, relating to the MCC's program and projects, from any kind of taxes.

Schedule A of the Annex states, 'Goods and services procured by MCA-Nepal or procured and supplied by any Exempt Entity or any Exempt Individual will be exempted from VAT or VAT will be refunded if it has been paid. It further writes that MCA-Nepal, any exempt entity, or any exempt individual will be able to sell, purchase, or import goods and services in connection to the compact without paying or collecting VAT. The draft also wants ensurance In refunding the VAT if it has already been paid in any circumstances.

In all the other Schedules from Schedule B to Schedule K, are the descriptions of the demands of CMC to exempt all its activities from each and every current taxation systems of Nepal, while running the projects.
In Nepal, two opposite arguments have been colliding since long about the MCC's programs, objectives and procedures. The present government led by KP Sharma Oli along with the main opposition party, Nepali Congress, are in favour of clearing the road for the MCC's projects, whereas, several other parties like CPN (Maoist Center) have found defects in it being potentially harmful for Nepal and its sovereignity, national integrity and national pride. In the all-party meeting held in an initiation of prime minister KP Sharma Oli on Saturday, the MCC agenda was brought into dicussion. In the meeting, Mr. Oli urged the Speaker of the House of Representstive, Agni Sapkota, to present the draft in the meeting of the House, scheluded to sit on 7 Baisakh, so as to decide on it. He further threatened Mr. Speaker saying if he did not do so, the Speaker's alternative would be looked for.

The Government of Nepal and the MCC had signed the agreement on 29 Bhadra, 2074. However, the program has been halted from being passed from the House because of contradictory versions of the political parties about its overall impact. The program requires to be approved from the House before it can be launched.

Although the proposed budget of nearly 55 billion Nepalese Currency is an average amount when looked at from a national perspective, the ongoing disputes look as if the nation were going to gain or lose 55 billion US dollars. Giving more emphasis to a general issue is a waste of time. If there are defective provisions likely to challenge national, racial, tribal, religious or environmental aspects of Nepal, that can be solved by designating a team of experts, representented from each of the concened groups, in order to find problems hidden in it. After the study, the short and long-term impacts of the program will be visible. It will also set ground for the implemention of the program more effectively.