State Re-structuring and Federalism in

Nepal

Resham Kandel
Presentation Outline
¨ State restructuring concept and practices
¨ Principles of federalism and bases of state-
restructuring
¨ constitutional provisions of power sharing in Nepal
¨ Challenges and opportunities
¨ Way forward
Concept of state re-structuring
¨ Re-distribution of state power (political, economic,
administrative) in different tiers of government.
¨ Re- design governance structure and mechanism.
¨ Political, economic, social and administrative
transformation through decentralized, inclusive and
proportional representation.
¨ Customization and configuration of state machinery.
¨ Out of four components of state, sovereignty and
government are to be restructured.
Approaches of restructuring
¨ Devolution of power within unitary system: France,
Indonesia, Denmark, Sweden, Norway, Japan etc.
¨ Federalism:
n Coming together: USA, Canada, Australia
n Holding together: South Africa, Ethiopia, Nepal

¤ Gradual and Big bang

Why State- restructuring ?
¨ To eliminate racial, regional, gender and economic
discriminations to form an equitable and just society
¨ To abolish feudal system
¨ To mainstream marginalized community
¨ To ensure inclusion, diversity management and
development
¨ To logically conclude the peoples’ movement and
¨ To empower the people
Bases of state re-structuring
¨ Democracy and sovereignty: Human rights, representation,
free, fair and frequent election, accountability mechanism.
¨ Division of state power
¨ Autonomy and ownership
¨ Service delivery and balanced development
¨ Access and control over resources
¨ Distributive justice
¨ Inclusion and positive discrimination
¨ Unity with diversity
Bases of state re-structuring in Nepal

¨ Identity: ethnicity, culture, language, history and

geography
¨ Competency: economic relations and
competence, infrastructure development, natural
resources and access to public services
Components of state restructuring
¨ Governance mechanism
¨ Electoral system and representation
¨ Socio economic transformation
¨ Control and ownership over government
Federalism in Nepal
¨ Unitary to federal
¨ Centralized to decentralized
¨ Exclusive to inclusive
¨ Top down to collaborative approach of
development
¨ Power transfer to power sharing modality
Features of Nepali federalism
¨ Based on diversity management
¨ Co-operative federal model (Inter locked)
¨ Symmetric federalism
¨ Triple tier federal structure
Constitutional Provisions
 Interrelationship among the tiers of Governments -
Vertical and Horizontal (Judiciary – Unitary system)

Federal Federal
Federal Judiciary
Parliament Cabinet

Provinci Provincial
Parliament
Provincial
al Judiciary
Cabinet

Local Local Judicial

Local Council Executive Committee
 System of Federal Governance
13 Constitution

Federal
Government Provincial Local
(GoN) Government Government

Ministries, DCC
Departments, Provincial Ministries, Rural/Urban
Regulatory Bodies Departments, etc.
Municipalities

Federal Offices/ Divisional/Distri -Division/Section/Unit

Projects ct Offices Service Center
- Ward Office

Principle: Cooperation, Co-existence, Coordination

 Metropolitan Cities -6 Sub-Metropolitan Cities - 11
14 Kathmandu, Lalitpur, Bhaktapur,
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Pokhara, Birgunj, Biratnagar
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गाउँ पा&लका/नगरपा&लका: ७५३
नगरपा&लका: २९३
गाउँ पा&लका: ४६०
िज5ला सम9वय स&म<त: ७७
कूल वडा संAया: ६७४३

Municipalities: 276 Rural Municipalities 460

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२ ८ १३६ १२७१ १३६ १३६ १२७१ २५४२ २५४२ ६६२७
३ १३ ११९ ११२१ ११९ ११९ ११२१ २२४२ २२४२ ५८४३
४ ११ ८५ ७५९ ८५ ८५ ७५९ १५१८ १५१८ ३९६५
५ १२ १०९ ९८३ १०९ १०९ ९८३ १९६६ १९६६ ५१३३
६ १० ७९ ७१८ ७९ ७९ ७१८ १४३६ १४३६ ३७४८
७ ९ ८८ ७३४ ८८ ८८ ७३४ १४६८ १४६८ ३८४६
कु ल ७७ ७५३ ६७४३ ७५३ ७५३ ६७४३ १३४८६ १३४८६ ३५२२१
४६० २ ९२०
गाउँ का.पा.
नगर २९३ ३ ८७९
का.पा.
िज.स.स. ७७ ७७ ७७ ० ७ ६९३
कू लज0मा ३७७१३
Allocation of competencies
Ø Schedule 5- List of exclusive rights of federal
government (35)
Ø Schedule 6- List of exclusive rights of provincial
governments (20)
Ø Schedule 7- List of concurrent rights (federal and
provincial governments- 25)
Ø Schedule 8- List of exclusive rights of LGs (22)
Ø Schedule 9- List of concurrent rights (Federal,
Provincial and Local- 15)
Exclusive rights of central level
¨ International relationship and co-operation
¨ Monetary related issues
¨ Defense
¨ Custom duty, VAT and Income tax
¨ Mega infrastructures, national policies, plan and
standards.
¨ Central administration
Major roles of provinces
¨ Province level policies and plans
¨ Provincial infrastructure development, health,
educational promotion
¨ Taxation like provincial business, transportation and
natural resource based.
¨ Provincial administration and civil police.
¨ Provision of provincial parliament.
Local governance
¨ Constitution has envisioned wider roles and
responsibilities to local level.
¨ Direct election of Mayor/ deputy Mayor and Ward
chair/ members
¨ Local assembly as local parliament ( minimum 27 to
maximum162 members based on size and
population of local level)
Cont…
¨ Executive Board under the chair of Mayor( 9 to 36)
¨ Representation of women, indigenous, minorities and
backwarded communities.
¨ Women's representation at local level is
overwhelming (i.e. around 41%)
Rights and responsibilities of local
assembly
¨ Discussion and approval to local law
¨ Approval of periodic plan, annual program and
budget
¨ Discussion over local issues pertaining to local
development and service delivery.
Rights and responsibilities of local
government ( executive)
¨ Drafting and implementation of local plan, policy
and budget
¨ Service delivery : regulatory services, primary
health, agriculture, veterinary, forestry etc
¨ Engagement on development related activities.
¨ Local tax management
¨ Judicial role as mediator.
Inter –Governmental Relation

¨Legislative/ Legal
¨Executive/ Administrative

¨Judicial

¨Financial

¨Developmental/ Service Delivery

Guiding Laws/ Acts to PGs and LGs
¨ Constitution of Nepal
¨ Local Government Operation Act 2074
¨ Public Procurement Act 2064
¨ Inter-Governmental Fiscal Management Act 2074
¨ Model Provincial/Local Planning Guideline 2075
¨ Local Level Planning Directive 2074
¨ Sectoral Acts/ Regulations/
Directives/Guidelines/Standards
¨ Model Acts/ Regulations
Major Challenges and Way Forward

¨ Mindsets and common understanding

¨ Institutional mechanisms (systems and
procedures) at Provincial and Local Level
¨ Capacity (Individual and Institutional)of Provincial
and local governments
¨ Intergovernmental coordination
¨ Local Participation and accountability