FEDERALISM : Bane or Boon

  6 min 13 sec to read
FEDERALISM : Bane or Boon

The time has come to initiate discussions and debates on the merits, demerits and impact of federalisation of the country.


Federalism and secularism were the two major agendas espoused by the Maoist party during their ten-year long war waged against the established political system after 1990. The other political parties like CPN (UML) and Nepali Congress accepted and owned this demand as part of the 12 point agreement signed between the seven party alliance and Maoist party in 2005. The political parties who coalesced these elements in their manifesto later, touted them as being the panacea for all the evils of under-development and poverty.

Out of the almost 200 countries around the world, only 25 have adopted the federal system of government. In such a system, there are clear distinctions of the role and responsibilities of the central, provincial and local governments within their territorial jurisdiction with the central government having territorial jurisdiction all over the country while the provincial governments and local governments exercising rights and duties within the sub-national geographical spaces; and such authorities are sanctioned by the supreme law of the land.

On the other side of the spectrum, many countries following the unitary form of government, have also resorted to delegation and devolution of authority to the locally elected representatives to bring the delivery of services to the door steps of the people and address local developmental issues more effectively with a wider participation of its stakeholders.

Following the promulgation of the new constitution in September 2015, Nepal has completed the process of constituting three level of governments with the first ever election of all levels of government held in 2017.Office bearers of these political bodies were elected and started functioning with all the pomp and grandeur that followed. But the moot question is whether the people who voted them into power feel comfortable with the state of governance that they are experiencing within the new federal system. Largely, the answer is negative. There is a lot of disgruntlement and dissension with the public feeling that their ordeals have not been addressed but have rather been aggravated under the new political set up in the country. 

The primary reason for the growing dissent is the incidence of heavy taxes on their limited income and small businesses.

The provincial and the local government has been mandated by the constitution to levy taxes, duties and surcharges in various activities and local products; a common farmer is compelled to pay tax on the sale and transportation of farm products and farm animals like goats, cattle and chickens. Small enterprises like cottage and small industries are also not spared. The level of fees and charges for vital registration is exorbitantly high while mandatory requirements for certification of the local municipality for a wider range of governmental transactions has enticed those municipalities to impose higher rates and disproportionate fees and charges from clients. The universal principle of imposing charges and fees commensurate to the level of services is being completely ignored by all tiers of government. 

The second reason is related to the use of resources thus collected from the people under different headings. The doling out of highly remunerating perks and emoluments to all elected representatives who make decisions for such perks by themselves has become a big joke.

In addition, a large amount of resources are allocated for purchasing luxury vehicles, including four wheeler SUVs, motor-bikes, and accessories like fuel, maintenance and drivers which add to the comfort of local leaders. Gone are the days, particularly in the Panchayat era, when the people's representatives were not paid any salary or perks while serving the people on a voluntary basis. There were many political leaders during that period who lost their property and land due to their continued engagement in politics. The situation is now just reversed as politics has been made as a business and the means of gathering property by any means. 

The third reason is corruption, nepotism and cronyism. The big corruption scandals have surfaced at all levels of government over the last two years. The local level office bearers are very much enticed to pour a large portion of their budget into the construction of local roads. The hidden interests of the leaders in this case are three fold; first, to mobilise the excavator and bull-dozer that they or their crony owns and operates. The budget allocated for road construction is largely funneled back to them as payment for hiring the excavator, bull-dozers and tippers. Second, they form a user's committee made up of their henchman and party workers who will function as de-facto contractor and do not pay taxes to the government.

Thirdly, the roads and bridges are mostly aligned for facilitating the movement of party leaders and cadres to connect to their places, irrespective of any rationale for making investment in such infrastructures. 

The upper echelons of the major political parties boast of the institutionalisation of the federal system in the country but the system is becoming unpopular as this has brought in hardship and frustration. The much desired dream of promoting prosperity and happiness through increased employment and income opportunities under a new political set up has become more than farcical.

The number of young people leaving the country for employment has not come down. The wider understanding is that the dividends of the federal system is being meted out to the cadres and leaders of the political parties to the discontent of the working class, farmes and low paid workers in the public and private sectors. 

There is growing dissension among the people against the governance structure under the federal system.  Some smaller political parties are banking on this exasperation.

Janmorcha Party led by Chitra Bahadur KC has been rallying against the federal structure from the very beginning while Sajha Party, headed by Rabindra Mishra, passed a resolution in its convention last month stating that there should be a referendum on the issue of federalism and secularism which was not the demand of the people during the second people's movement of 2005-06. The party has rightly captured the imagination of a large number of people who are not comfortable with this arrangement made in the constitution. People often complain that provincial governments have no business in a country that has a land size of one-eighth of Tibet, China and a population size of one-seventh of UP, India. The negative impacts on the economic social and cultural fabric of the country are enormous in comparison to the benefits. Hence, the time has come to initiate discussions and debates on the merits, demerits and impact of federalisation of the country.

Such a debate can provide useful feedback for introducing amendments to the constitution, in accordance with the will of the people. The true democratic process can take hold only if the culture of deliberation can be initiated at the earliest with the aim of continually improving the governance system in the country. 

(Ojha is former Secretary at Ministry of Commerce, Supplies and Industries.)

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