Book: On Fiscal Federalism

Dr. Som Lal Subedi, secretary of Ministry of Local Development and Federal Affairs, recently published a book that gives the entire picture of Nepal’s municipal fiscal situation

Sept. 14, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -7 September. 12- 2014 (Bhadra 27, 2071)

There is no dearth of experts on federalism and decentralization. What is lacking is an expert with knowledge and experiences of working at the grass root level.  By publishing a book, Fiscal Decentralization in Nepal, Dr. Subedi has shown how it makes a difference in implementing an academic concept in reality.

Nepal has been harping on the agenda of decentralization and devolution of power for over half a century and many books and scholarly works have already been published in that regard. However, there are many mismatches in theories and implementation. Dr.  Subedi’s book shows complication of theories and challenges of implementation.  His long experiences of working in various capacities under Ministry of Local Development and Ministry of Finance are reflected in the book.

At a time when Nepalese politicians are harping on devolution of power as agenda of politics and identity, Dr. Subedi’s book  shows the important parts of the fiscal management towards perfect federalism or decentralization.  Managing the resources is an important aspect of federalism and decentralization.

At a time when Nepal is in the process of state restructuring and Nepal’s Constituent Assembly has been debating how to make Nepal’s federation functional and workable financially, the book published by Dr.Subedi is significant and important.

In the last decades many books have already been published on fiscal decentralization and fiscal federalism, yet, Fiscal Decentralization in Nepal, a Municipal Perspective, is the first of its kind which analyses the entire scenario of municipalities of Nepal.

Based on intensive research of fiscal aspects of Nepal’s municipalities, Dr. Subedi discusses the economic and social imperatives of Nepal’s municipalities and their institutional capability and efficiency in terms of their geographical areas.

“This is a rare book on Nepal’s fiscal decentralization, especially focused on the functioning of municipalities. It is rich with first hand data, personal experience, empirical research and contemporary literature on the subject presented in a coherent conceptual framework,” writes Professor Krishna Khanal.  “This is a treasure of fiscal decentralization.”

Divided into seven different chapters, the book covers all aspects of fiscal decentralization like conceptual framework, policy and legal framework, institutional capabilities, analysis of fiscal decentralization and municipal taxation and problems and prospects of fiscal decentralization and municipal taxation in Nepal.  This book deserves to be read by all.

In the words of former vice chairman of National Planning Commission and Nepalese ambassador to United States Dr. Shanker Sharma, "The book on fiscal decentralization by Dr. Som Lal Subedi provides a comprehensive analytical account of fiscal decentralization practices in Nepal with focus on municipalities. It examines the key issues that are needed to design and evaluate an appropriate fiscal decentralization program and offers valuable and practical recommendations. The research carried out in this book is rich and robust.”

Professor Khanal and Dr. Sharma’s statements speak volumes. These statements are testimony to show the importance and relevance of the book in the present context.

“This book comes out with so much of information about fiscal management and use of resources at the municipal level.  Based on intense study, the book is a treasure for those who want to study fiscal decentralization in Nepal,” said chief secretary Leelamani Paudyal commenting on the book. “The book clearly points out federalism or decentralization is not just a transfer of power from center to province or local units but it is also about the sharing of the resources equally to better the service delivery.”

As Nepal is in the stage of state restructuring from a unitary to federal setup, there is the need to have greater understanding  of fiscal decentralization as it is the main thrust in both federal and unitary state of governance. “In the context of holding the local elections in November and promulgation of new constitution by February 2015, the author has done justice by publishing the book in this crucial time,” said deputy prime minister and minister of Local Development and Federal Affairs.

The author also emphasizes that capacity of local bodies is critical to carry out the assigned service to the people. Dr. Subedi argues that there is a mismatch between expenditure assignments in Nepal. The book also pinpoints the weak implementation of Local Self Governance Act in general and fiscal decentralization in particular. This book has analyzed the fiscal decentralization in Nepal and highlighted the municipal perspectives based on four pillars of fiscal decentralization and suggested the role to be assigned to local governance in federal context of Nepal.

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