Currently, Nepal is undergoing a process of change from a unitary to a federal system of governance for providing a proven space for diverse castes and ethnic groups and their equal access and control over political powers. As the mono-inclusive type of centralized and authoritarian order remained adverse to inclusion of Dalits, Indigenous Nationalities, Madeshis, gender and deprived regions at state apparatus for centuries, the reversal from the unitary state is afoot constitutionally. State powers are constitutionally divided between a central government and local political constituents in a federalism. The combination makes a federation. When the allocation of authority is divided among the center, province (state) and local governments constitutionally, the self-governing status of local governments is entrenched and cannot be revoked by a unilateral decision of the central government and provincial governments. As long as the fate of local governments is given to the mercy of central and state governments, local democracy can not be sustained, whatever political system is installed in the country. 


There is no denial of the fact that providing more autonomy to local governments enhances chances of success of democracy taking root at primary venues. For deepening democracy, citizens want a provision that all powers should be held at local governments except the powers allocated for the center and provinces. In connection with the devolution of powers, most countries in the world provide legislative, executive, and judiciary, financial and administrative powers between local governments, regions or states and central governments constitutionally. Countries like England, China, the Philippines and Tanzania have formed state structures devolving more power and autonomy to local autonomous regions and provinces. The Zanzibar autonomous province of Tanzania elects its own president. Two systems in province in China and the Mindanao autonomous provinces of the Philippines are examples of similar forms of power sharing. The autonomous provincial governments of Wales, Northern Ireland and Scotland in England can issue and use their own currency. Denmark, Sweden, Norway and Macedonia are among most popular countries in the world to the cause of decentralization. India, America, Australia, Switzerland and South Africa with federal system of governance have attached importance to local governments, sharing power and authorities.


It is known to all that the absence of local representatives since 2002 in local bodies has been leading to development and administrative paralysis in Nepal. Either the bureaucracy or all party mechanism is leading local bodies on a cyclic order. Leadership of the country is reluctant to legitimize local governments through election. It is a mere symptom of how syndicate of political nominees is an in-built aspect of the local governance system.  Going back to 1960s, no interruption is found towards legitimacy of local bodies through holding periodic elections since 1961 to 2002 which is rarely available in South Asia watching over the case of Nepal. The challenge for Nepal is to create a system of good governance that supports, promotes and sustains human development to realize the highest potential and well-being of all, thus eliminating poverty and all other forms of exclusion. Effective local governance requires decentralization of two types: vertical decentralization or transfer of authority, functions, responsibilities and resources from the central government to local governments; and horizontal decentralization or the empowerment of local communities to determine, plan, manage and implement their policies. Local governments should be given rights and accountability on management and mobilization of local resources through participation of local people in the planning process within given liberal political framework. In order to flourish cultural pluralism of Nepali society at primary venues of local democracy, more autonomy must be guaranteed to local tiers of governance constitutionally.


The CA Committee on ‘State Restructuring and Distribution of State Powers’ has proposed three tiers of governance - Center, Province and Local Government. It has proposed Autonomous Region, Protected Region and Special Region parallel to the local bodies that indicate overlapping and ambiguity on rights, roles and accountabilities between local bodies and special structures. Those special structures are to oversee exploration of mines and management, development of culture and script additionally compared to local governments. The very committee has proposed the right of provinces on local resources. This threatens autonomy of local governments causing reliance on provinces.  Likewise, the 'State Restructuring High Level Recommendation Commission' has proposed nine provinces and one non-territorial unit. It has been more obsessed with division of powers between the center and provinces. It seems to be similar with CA Committee on 'SRDSP' on other matters mentioned above.


In Nepal, there are approximately 300 market centers including small towns and municipalities. On the ground, the creation of 300 Municipalities or Municipal Governments could be more practicable. The 3915 Village Development Committees (VDCs) are better to reduce to 700 Village Governments on basis of eligible criterions such as administrative and geographical proximity, majority of caste/ethnic and lingual settlements, shared watershed, availability of natural resources, infrastructures and possibility of local economic development.


The local governments should be given autonomy on taxation, inter governmental fiscal transfer and distribution of revenues.  A constitutional provision of providing 'equalization grants' to local governments also should be provisioned on the basis of Human Development Index (HDI).  As the local self-governments are constitutional parts of the federal system, suggestions and feedbacks on behalf of them should be mandatory in terms of policy formulation and distribution of fiscal resources. A High Level Fiscal Commission needs to be constituted at federal level along with equitable representation of local governments for policy feedbacks. 


With reference to Nepal, the motto of federalism is not only to transfer/divide powers from center to provinces to make a dent in existing power structures, but also to make local governments as ingredients on division of powers. The imagination of making the local governments as the appendage of the center or provinces can not allow for the evolution of democracy at the local level. The proposed federal system of governance must be able to put the people at the center of politics locally, only the empowered people can share power through the democratic process and the freedoms formed by the democratic order.


(BK is a Ph.D. Scholar at Tribhuvan University and is currently working at Nepal Center for Contemporary Studies, NCCS, as a Researcher).