A Glimpse of Nepalese Federalism

Abstract

Nepal has a long history of a unitary system in which the discourse of federalism was started by the ‘Moist People War’ (1996-2006); geared up by the United People’s Movement (April 2006); owned by the Comprehensive Peace Agreement/Accord (CPA) signed by the Maoists and the Government of Nepal (24 November 2006); established by the Madhesh Movement (2007); and codified by the Constitution of Nepal (2015) through the Constituent Assembly, ultimately. The Nepalese federalism has even adopted the core principles of republicanism, ethnic diversities, equality and non-discrimination, affirmative action, social inclusion, secularism, decentralization of state power and financial power, distribution of source of revenue, autonomy, self-rule, and shared rule, etc., among others. For this purpose, there are federal, provincial (7), and local levels governments (753) operating; several legal, institutional, procedural, and practical initiatives have been taken by the governments, and while some progress has been made, however, there are several remaining responsibilities yet to be addressed including the ‘traditional unitary mindset’ for localizing and sustaining federalism in the country.

 

Nepal: Journey from Unitary State to Federalization

It is usually said that the Maoist-led ten-year-long (1996-2006) ‘people war’ founded the federalism discourse in Nepal. However, there are different perspectives on it. According to Maoist Chairman Prachanda, his party had started to formulate the ethnic and regional fronts with an assumption of its significant role towards ‘people war’ within at its beginning (DLFN, 2006:7); when the war reached its climax they realized that addressing the issues of class, ethnicity, region, gender and caste discrimination in the unified and collective way was a significant reason to gear up the ‘people war’” (Prachanda, 2007a: 400-401). He further clarifies, that around 2003, his party proposed ethnic as well as regional identity-based autonomy with self-determination as a basic policy of the upliftment and liberation of people from class, caste, ethnic, regional, and gender-based discrimination and exclusion along with the party policy ‘Democracy of 21^st Century’ (Prachanda, 2007b: 416). In reverse, the outsiders’ views are quite different from the Maoists’ perspectives on the ‘people war’ and the intention to raise issues of federalism such as, “the Maoists developed a policy for ethnic autonomy, probably as a strategy for political and military support from different ethnic groups” (Aalen and Hatlebakk, 2008:2). According to Bishnu Raj Upreti, “they (Maoist) strategically utilized the ethnic ‘feeling of injustice’ to expand their ‘people war’ by promising to establish an ethnic-identity-based federal system which they practiced during wartime (Upreti, 2010:15).” Likewise, “the Maoists have not missed the opportunity to capitalize on the ethnic fracture born out of the resentment vis-à-vis the perceived hegemony of one religion (Hinduism), one language (Nepali) and one nationality (Khas-Arya) to mobilize supporters. Elimination of ethnic discrimination has emerged as a significant plank in the CPN (M) political agenda” (Boquérat 2008:10). Hence, the views of Maoists’ own-selves and others conflict with each other on the ‘intention of raising issues of federalism’, whatever the views, there is no doubt that the federalism discourse for the first time in Nepal had emerged during the Maoist conflict era (Kisan, 2022).

After the second People’s Movement (April 2006), which was accomplished by the joint efforts of Maoist and Seven (Political) Parties Alliance (SPA) based on the 12 points-understanding signed between Maoist and SPA on 5 November 2005 (in Delhi, India). Then, the Comprehensive Peace Agreement/Accord (CPA) was signed by the Maoists and the Government of Nepal (GoN) on 24 November 2006 which comprised the democratic and progressive restructuring of the conventional state (CPA, 2006). Incorporating the basic features of the CPA, the Interim Constitution of Nepal was promulgated on 15 January 2007 but failed to address the issue of federalism that had been repeatedly committed by several proclamations, decisions, and agreements, and even in CPA before by the Maoist, SPA, and Government of Nepal. Consequently, the movement started in Terai-Madhes right after the promulgation of the Interim Constitution with the slogan of “the state restructuring based on ethnicity and region” (Gautam 2008:185) and “a whole Terai-Madhes as one province” (Yadav 2008:115). It played a significant role in reinstating the federal discourse in the country. Immediately, Prime Minister Girija Prasad Koirala, addressed the issue in the name of the Nepalese people on 7 February 2007 and promised “to convert Nepal into a federal democratic nation” which was another departure on the journey of federalization of Nepal (Kisan, 2022).

Before the election of the Constituent Assembly (CA) and during the constitution-building processes (2008-2015), the government of Nepal conducted various dialogues with several struggling groups/forces and reached understandings/agreements for materializing federalism in the upcoming new constitution by the CA.[1] At the same time, the Maoists and the SPA also reached a 23 point-understanding on 23 December 2007 and “declared that Nepal will be a federal republic nation.” All those efforts and understandings ultimately led the GoN to agree on the third amendment of the Interim Constitution on 28 December 2007 incorporating the provision of “The Federal Republic of Nepal”. The Constituent Assembly’s first meeting held on 28 May 2008, made a fourth amendment to the interim constitution, and declared Nepal a federal republic. On 20 November 2015, the Constitution of Nepal was promulgated and ensured a final stamp of Nepal as a federal, democratic, republican country.

 

Constitutional Principles and Commitments towards Federalism

The Constitution of Nepal (2015) has adopted the general principles of federalism, republicanism, and parliamentary democracy (Articles 4, & 56); social inclusion and proportional representation (Articles 4, 38, 40, & 42); multiethnic, multilingual, multi-religion, and multi-cultural and geographical diversities (Article 3); equality, non-discrimination, and affirmative action (Article 18, 24, 38, 40 & 42); secularism and rights to religion (Article 4 & 26); decentralization of state power, financial power, and distribution of source of revenue (Article 57, 59, & 60) respectively. Moreover, it has adopted the principles of autonomy and self-rule, multiparty democracy, civil liberties, fundamental rights, human rights, adult franchise, periodic elections, full freedom of the press, independent judiciary, and the rule of law, and other areas. (preamble). It has further enlarged the scope of fundamental rights and included citizens’ duties for the first time.

From the preamble to its various parts, articles/sub-articles, clauses/sub-clauses, explanations, definitions, and annexes/schedules, the constitution commits to the federalization of the country by safeguarding the basic features of federalism, such as a “federal democratic state (Article 4)”; “the three levels of state structure as such federal, provincial, and local federal units (Article 56); “distribution of the state power among and within three levels of the state (Article 57), residual powers (Article 58), and financial powers” (Article 59), and “distribution of sources of revenue” (Article 60) respectively. Moreover, parts 7 to 10 of the constitution provisions the federal executive and legislature including legislative as well as financial procedures whereas parts 13 to 16 provisions the provincial executive, and legislature, including legislative as well as financial procedures, and parts 17 to 19 provisions local executive, legislature, and financial procedures refer to federal principles.

 

Power-sharing

Part 20 of the constitution exclusively provisions the interrelations between the federation, provinces, and local levels that explicitly mention the interrelations and coordination methods and mechanisms among and between the executives, legislatures, trades, etc. of federal, provincial, and local federal units.

In line with those commitments, Schedule-5 included 35 exclusive powers of the federation, Schedule-6 included 21 exclusive powers of the province, Schedule-7 included 25 concurrent powers of the Federation and Province, Schedule-8 included 22 exclusive powers of the local levels, and Schedule-9 included 15 concurrent powers of the Federation, Province, and Local levels, explicitly. According to these Schedules in the Constitution, after including both exclusive and concurrent jurisdictions, the federal government can legislate on 75 issues; provincial governments can legislate on 61 issues; and local governments can legislate on 37 issues; while providing a detailed list of jurisdictions, retains residual rights with the federal government (Article 58) (DRC, 2020:2).

 

Demarcation of Federal Units, Forms of Government and Parliament

For the implementation of the constitutional commitments of federalization of Nepal, the country has been divided into the federal level, 7 provinces including 77 districts, and 753 local levels/governments (6 Metropolitan Cities, 11 Sub-Metropolitan Cities, 276 Municipalities, and 460 Rural Municipalities that comprise 6743 wards altogether) as three levels of federal units.

The constitution has been transforming Nepal as a multiparty, competitive, federal, democratic, republican, parliamentary form of government based on pluralism (Article 74) which applies to the formation of federal and provincial governments whereas the local governments look somehow presidential model with the executive body directly elected by the adult-franchise via first past the post (FPTP) electoral system (Article 215).

There are three tiers of parliaments as the main lawmaking bodies of the country: federal parliament (House of Representatives/HoR and National Assembly/NA), provincial assemblies in all 7 provinces, and local legislature in all 753 local levels. The federal parliament is bicameral whereas provincial and local assemblies are unicameral in their existing forms.

 

Initiatives, Achievements, Challenges and Remaining Responsibilities

Initiatives

Initially, the Ministry of Law, Justice, and Parliamentary Affairs identified 110 major subjects of lawmaking for the federal government, 22 for provincial governments, and 6 for local governments including reviewing and making compatible 315 existing laws and 270 regulations in line with the spirit of the newly promulgated constitution (GoN, 2016a:1-2). Moreover, the federal government formed a “Directive Committee on the Implementation of Federalism and Administrative Restructuring” at the convenorship of the Prime Minister and a “Coordination Committee on the Implementation of Federalism and Administrative Restructuring” at the convenorship of the Chief Secretary of the Government of Nepal in 2016. Furthermore, based on the decision of the coordination committee, five different thematic working groups were formed to discuss the exclusive as well as concurrent rights/power of federal, provincial, and local levels mentioned in the respective schedule including other constitutional safeguarding in this regard (GoN, 2016b:3). Additionally, the National Assembly of Federal Parliament formed a “special committee on the study and monitoring of the implementation of federalism” on 3 June 2022 and the committee, after extensive consultation with federal, provincial, and local levels governments and concerned agencies, which has submitted a comprehensive report including a set of 99 recommendations in which the federal, provincial, and local levels of government need to take to further initiatives to implement federalism on the ground. Based on the report and continuous follow-up by the committee the Government of Nepal has passed a “Working Procedure for Implementation of Federalism, 2022” on 14 October 2022.

 

Achievements

Formation of 7 provincial and 753 local entities; devolving previously centralized state power and functional responsibilities among the three tiers of federal units; smooth functioning of the constitutional bench of the Supreme Court; establishing and functioning of the financial transfer mechanism, and establishing the National Natural Resources and Fiscal Commission (NNRCF) for revenue sharing and royalty distribution from natural resources and a fiscal transfer system are the key achievements (FPS, 2022:60-70). Likewise, until December 2022, amending 431 existing federal laws, releasing 47 ordinances, and enacting 121 new federal laws including key laws[2] for making compatible with the essence of federalization of the country are other achievements. Likewise, at the end of their first cycle (November 2018 to December 2022), the provincial governments enacted 240 laws, and local governments (until May 2018-2022) enacted 2989 (this data does not cover all local bodies) laws altogether by using their autonomous rights safeguarded by the constitution (schedule No. 5, 6, 7, 8, & 9) to all federal units of the country. Likewise, there are 97588 civil servants integrated into the new federal setup at the federal (39,960/41%), provincial (13,821/14%), and local (43,807/45%) levels (DRC, 2019:8-9) which are crucial for smooth service delivery and development initiatives at all levels.

Moreover, there are established and functioning necessary provincial institutions such as the Office of the Chief of the State (however, the ‘political biases in the appointment of them and their non-neutral role’ are being highly criticized) (DRC, 2022:4), the Office of the Chief Minister and Council of Ministers and Ministries[3], Inter-State Council (Article 234), Provincial Assemblies (Article 175/176); District Coordination Committees (Article 220); Provincial Public Service Commission (by provincial laws), Finance Controller Office; Province Coordination Council (by federal law) Provincial Policy and Planning Commissions, Provincial Centers for Good Governance, Provincial Staff College, (by provincial laws), etc. provisioned by the constitution and provincial laws, respectively (FPS, 2022:60-70). Similarly, provincial universities, academies, authorities, councils, boards, and development committees are being established by the provincial laws, however, due to the conflict/overlapping with federal laws and unclarity in work procedures those institutions have not yet functioned effectively (DRC, 2022:11). In addition, problems and ways of solution are localized, and positive competition in development within and amongst the local, provincial, and federal levels have increased (Devkota, 2023). However, the criticism of untransparent financial behavior that came up during the first tenure of the local governments is a challenge for localizing federalism.

 

Challenges

Although these initiatives and efforts have been made, the challenges remain ahead in implementing federalism, such as the inadequacy of physical infrastructures in the provinces, lack of initiation of transferring property rights from the federal to the provincial governments, lack of employees across all seven provinces, prevailing centralistic mindset, overlapping provincial laws with federal laws, lack of proper coordination and cooperation among the three tiers governments, etc. (DRC, 2019:13-21). Moreover, the constitution separates the exclusive and concurrent jurisdictions for the three levels, while residual rights rest with the federal government. But, in many instances, lists for exclusive and concurrent jurisdictions are unclear or in conflict with each other. Therefore, it is not easy for laws to be enacted at local and provincial levels – especially when it pertains to areas of concurrent jurisdiction (DRC, 2020:27-28).

 

Remaining Responsibilities 

The “special committee of the National Assembly-Federal Parliament on the study and monitoring of the implementation of federalism” has identified and released 99 recommendations in 13 different thematic areas as remaining responsibilities in implementing federalism in Nepal. The recommendations are mostly related to fiscal federalism, administrative transformation, inter-level coordination, institutional development, and good governance. (FPS, 2022:60-70).[4]

 

Conclusion

The experience of implementing federalism in Nepal is very short and only dates to 2015, and there is still time to thoroughly review it, compare it with other older federal states, and reform it as needed. However, a widespread centralistic mindset of some traditional policymakers and implementers from federal to provincial and even the local levels has contributed not only to delay but to its non-implementation. Similarly, delaying the enactment of key federal laws; infrastructures, and institutions development; financial and human resource arrangements; the lack of vertical and horizontal coordination between the provincial and local governments/institutions; duplications in enacting laws, policies, plans, programs, and activities between and among the provincial and local levels have created obstacles to the implementation of federalism. Most importantly, the lack of demonstration of the high performance of provincial governments in spending the development budget during their first tenure (2018-2022) and the increasing graph of administrative costs in provinces are largely criticized as negative implications of federalism that contribute to increasing anti-federalist milieu in the country. It shows that sustaining federalism in the country of Nepal is tough and a steady process, requiring political commitment and elites dedicated to implementing and making federalism work.

[1] The GoN reached the agreements with representatives of indigenous peoples on 7 August 2007, Madhesi People’s Rights Forum on 30 August 2007, and Churia Hills National Unity Society on 13 September 2007.

[2] Local Government Operation Act, 2017; Intergovernmental Fiscal Arrangement Act, 2017; Administration of Justice Act, 2017; Financial Procedure and Fiscal Accountability Act 2019; Employees Adjustment Act, 2017; Federation, Provinces, and Local-Levels (Coordination and Interrelationship) Act, 2021, etc.

[3] There are altogether 78 Ministries established until the end of the first tenure of provincial government in provinces which is criticized widely by the people.

The share of own-source revenue collected in FY2022 and deposited in the treasury single accounts was highest in the FGS, covering 69.8 percent of the total own-source revenue collected across the authorities.  In comparison, Southwest and Hirshabelle each accounted for only 0.9 percent of the total own-source revenues collected.

[4] Related to clarity of jurisdiction and constitutional amendment (2), ensuring the rights of women and other marginalized groups (3), formation of joint committees and implementation of committee directives (2), implementation of the recommendations of the Constitutional Commission (1), federalism implementation plan (2), decentralization plan (1), Good governance, service delivery, and implementation of fundamental rights (7), building an equitable society (1), administrative federalism (19), institutional structure (8), inter-level coordination and collaboration (9), fiscal federalism (33), miscellaneous (11).

Suggested citation: Kisan, Yam Bahadur. 2024. ‘A Glimpse of Nepalese Federalism’, 50 Shades of Federalism

 

Bibliography and Further Reading

Aalen, Lovise and Magnus Hatlebakk. 2008. Ethnic and fiscal federalism in Nepal. Bergen: CMI-Chr. Michelsen Institute, Norway. pp 1-19.

Boquérat, Gilles. 2008. “Ethnicity and Maoism in Nepal.” April 24, 2008. https://southasiarev.wordpress.com/2008/04/24/ethnicity-and-maoism-in-nepal/

Chalaule, Ankalal. 2021. Federalism in Nepal: A Bibliography. Kathmandu: Democratic Resource Center.

CPA. 2006. Comprehensive Peace Agreement. Kathmandu: Government of Nepal, Ministry of Peace and Restructuring.

Devkota, Khim Lal. 2023. A paper presented on “Federalism, Intergovernmental Relationships and Parliamentary Special Committee’s Report” on 10 February 2023, Kathmandu.

DLFN. 2006. Dalit Mukti ko Prashnama Prachandapath (Prachanda Path: A quest for Dalit liberation). Kathmandu: Nepal Dalit Mukti Morcha (Dalit Liberation Front Nepal). pp 7.

DRC. 2019. Formation and Functioning of Provincial Institution at the Federal Structure. Kathmandu: Democracy Resource Center. Pp. 8-9.

DRC. 2020. The interrelationship between the three levels of government in Nepal’s Federal Structure. Kathmandu: Democracy Resource Center. P 2.

DRC. 2022. Provincial structure of Nepal and its functioning (In Nepali). Kathmandu: Democracy Resource Center. P 4.

FPS. 2022. A Report of the Special Committee of the National Assembly-Federal Parliament for the study and monitoring of the implementation of federalism in Nepal, 2022. Kathmandu: Federal Parliament Secretariat, Singh Durbar. Pp 60-70.

Gautam, Bhaskar. (editor) 2008. Madhesh Bidroha Ko Nalibeli (A Detailed Description of Madhes Revolt). Kathmandu: Martin Chautari. Annex b. pp 184-187.

GoN. 2008. The Interim Constitution of Nepal. Kathmandu: Ministry of Law, Justice and Parliamentary Affairs, Law Books Management Committee.

GoN. 2015. The Constitution of Nepal. Kathmandu: Ministry of Law, Justice, and Parliamentary Affairs, Law Books Management Committee.

GoN. 2016a. The status of identification, prioritization, and enacting laws for the implementation of the constitution of Nepal (A study report in Nepali). Kathmandu: Government of Nepal, Ministry of Law, Justice, and Parliamentary Affairs. Pp. 1-2.

GoN. 2016b. A report on jurisdiction extension of solo and concurrent rights of the federation, provinces, and local levels included in schedules 5, 6, 7, 8 & and 9 of the constitution of Nepal (A study report in Nepali). Kathmandu: Government of Nepal, Coordination Committee on implementation of federalism and administrative restructuring. P. 3.

Karki, Buddhi and Rohan Edrisinha. 2014. The FEDERALISM Debate in Nepal, Vol I & II. Kathmandu: UNDP Nepal.

Kharel, Aswasthama Bhakta. 2022. Models of Federalism and Nepal’s Practices. Kathmandu: Central Department of Political Science, Tribhuvan University.

Kisan, Yam Bahadur. 2022. Federalism and Dalit.  In Pranab Kharel, (edi.). 2022. Reading Nepali Transition (2006–2015). Kathmandu: Martin Chautari.

Prachanda, Puspa Kamal Dahal. 2007a. “A Brief Overview of Tenth Years-Long Great People’s War (in Nepali)”. In Prachanda Selected Works, Vol. 1. Kathmandu: Janadisha Prakashan Nepal. pp 371-404.

Prachanda, Puspa Kamal Dahal. 2007b. “A Quest for the Expansion of People’s Democracy in the Twenty-first Century (in Nepali)”. In Prachanda Selected Works, Vol. 2. Kathmandu: Janadisha Prakashan Nepal. pp 391-416.

Rawal Thapa, Dil Kumari (edi.). 2020. Nepal’s Constitution and Federalism Vision and Implementation. Kathmandu: The Asia Foundation.

Roy, William Bahl. Andrey, Timofeev. & Serdar Yilmaz (editors). 2020. Implementing Federalism: The Case of Nepal. Atlanta: Georgia State University.

Smith, Robert Brian, and Nucharee Nuchkoom Smith. 2022. Implementation of Federalism in Nepal: The Devil is in the Detail. Armidale NSW-Australia: University of New England.

Tamang, Seira (edi.). 2023. Nepal’s Federal Conundrum: Negotiating a Strong Federal System on Weak Democratic Foundations. Kathmandu: Martin Chaurati.

Thapa, Deepak and Alexander Ramsbotham (editors). 2017. Two steps forward, one step back: The Nepal peace process. London: Conciliation Resources. Accord // ISSUE 26 // www.c-r.org

Upreti, Bisahu Raj. 2010. “Ethnic Federalism and Potential Conflict”. The Republica. (2010-02-20 00:15:52).

Yadav, Ram Naresh. 2008. “Madhesi Revolt in Sunsari-Morang (In Nepali)”. In Bhaskar Gautam (Editor) 2008. A Detail Description of Madhes Revolt (In Nepali). Kathmandu: Martin Chautari. Pp 103-116.