Nepal | November 27, 2020

Practicality of federalism: How long before it is fully functional?

DINESH PANT
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Given the dubious history of the viability of three-tier federalism in other countries, too, it can be predicted that sooner or later either the province or local level will become dysfunctional

Illustration: Ratna Sagar Shrestha/THT

With the formation and operation of the elected legislative bodies and governments at federal, provinces and local levels, Nepal’s political transition towards a federal democratic republican state, as per the constitution of 2015, has been considered successfully completed.

The major shift in Nepal’s contemporary public administration is its restructuring into a federalised form through reduction in the number of existing ministries (from 31 to 23) and central departments through integration and handover of some 8,000 centrally-run offices to seven provincial and 753 local governments and adjustment of more than 100,000 central and local staff in the new set-up.

Likewise, some essential laws to execute federalism have been issued. Three cycles of annual programming and budgeting in a federalised form have been completed in all the three tiers of the state. However, the required transformation of public administration from a unitary to a federal set-up has been very slow. It is, thus, time to reflect on the major pitfalls of the administrative federalisation process.

Firstly, provinces continue to be handicapped in delivering the expected services and undertaking development works due to the unclear organisation set-up and inadequate laws, staff and physical facilities. They are unable to recruit the needy staff for both provincial and local offices, despite having the provincial public service commission in place, due to lack of a federal law for civil service administration, on the basis of which they have to design their own laws for administering provincial and local services.

Before the provincial and local governments can sustain themselves, the federal government has started reducing its grants (conditional and equalisation) to them. Of its total budget of Rs 1,474 billion for this fiscal year, the federal government has allocated merely 4% to the provinces and 7% to the local levels, compared to 6.7% and 14.5% respectively last fiscal year. Common citizens have to bear the irrational tax load of the provincial and local governments due to their competition in charging different taxes haphazardly.

Secondly, the inter-governmental relationship has increasingly deteriorated because of the slow and reluctant move of both the federal government and parliament in making new laws required for enabling sub-national governments to function smoothly by exercising constitutionally devolved exclusive and concurrent authorities.

Conflict between the federal and sub-national governments has frequently surfaced in the handover of the regional, divisional and district offices (related to land revenue, land survey, education, health service, irrigation, energy and roads) from the former to the latter. Federal authorities have not stopped creating parallel offices in the provinces and districts to carry out their field level functions, like roads and irrigation.

Thirdly, provincial governments complain that both the chief district officers and district police do not listen and report to them, nor are they consulted by the federal government for frequently transferring the centrally deputed secretaries, affecting their administrative and development functions. It seems that the centrally designated 77 CDOs continue to be the main authorities for maintaining security, law and order.

Fourthly, there are some serious perceptual gaps between the federal government and sub-national governments in seeing each other’s roles and positions. If Article 232 of the constitution is considered, the present three tiers of the state are not provisioned on a hierarchical basis, as if the federation has control over the lower tiers.

The federal government officials tend to hold the view that both provincial and local governments, being less capable to design and execute both laws and development projects, need to be delegated power gradually as their capacity builds up. Provinces have also complained that the federal government with a unitary mindset is deliberately delaying required law making and withholding organisations and staff to maintain its supremacy and keep them weak.

It is not difficult to foresee the future scenario in Nepal’s drive towards federalism.

Public service delivery will continue to be disrupted for long at the provincial and local levels– also affecting the delivery of the federalism dividend, if any. Some political leaders, particularly from Province 2, will keep fighting back for the constitutionally devolved authority. For some time, sub-national governments will keep enjoying the benefit of the doubt for their low performance due to the unsupportive behaviours of the federal government.

The practicality of the existing three-tier federalism will be tested by the level of inter-governmental conflict over use of constitutionally devolved authorities and natural resources and their capacity to generate new resources without a tax burden to the people for doing basic functions.

Considering the dubious history of viability of threetier federalism in other countries, too, it can be predicted that sooner or later either the province or local level (province being more likely) will naturally become dysfunctional.

Even if Nepal’s federalism does not meet any fatal accident, it has a long way to go for being fully functional — politically, economically, fiscally, administratively and emotionally.

Pant, a former Executive Director of the Nepal Administrative Staff College, writes on governance issues


A version of this article appears in print on November 09, 2020 of The Himalayan Times.


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