The 2015 constitution provides 22 exclusive political and administrative rights to local governments (see list alongside). Similarly, there is a long list of concurrent powers the three tiers of government can implement in coordination.
That is why it is often said Singha Durbar (the central administrative body) has reached villages, which means people can now get all services at their doorsteps without, unlike in the past, the need to visit Kathmandu. But as local governments are set to complete their first five-year term, they are still grappling with grave legal, budgetary and human resources problems.
The constitution authorizes them to draw up laws, policies, plans, and annual budgets, just like the federal and provincial governments, but in the past five years they have struggled in these tasks.
Former government Secretary Gopi Nath Mainali says local governments are yet to fortify themselves to be able to fully exercise their constitutional rights.
“The constitution provided them the right to self-government, but local leaders and politicians are yet to fully grasp this idea. They are unclear about how they should operate,” says Mainali.
In these five years local governments paid little attention to building a robust system and continued to rely on the federal government for resources.
Subnational governments get federal money under four headings: fiscal equalization, conditional, special, and complementary grants. There is a clear demarcation on the spending of these allocations.
In the fiscal year 2021-22 alone, the federal government allocated Rs 362.63 billion to the provincial and local governments. According to the Ministry of Finance, around 18 percent of the federal government’s total budget was allocated to support local governments.
But over the years, Mainali says, local bodies did little to generate their own revenue and resources.
“They [local governments] have failed to collect taxes, their key revenue source. They did not want to collect taxes out of fear of losing voters,” says Mainali. “Budgetary constraints at the local level can’t be resolved from the center. Local governments need to expand their economic activities.”
Hom Narayan Shrestha, chairman of the National Association of Rural Municipalities in Nepal (NARMIN), does not subscribe to Mainali’s views.
He says it is continued centralization of resources that has hampered local governments from the start.
“While the constitution decentralized the duties, the federal government centralized resources, paralyzing the functioning of local governments,” he says.
The association has been fighting for budgetary independence of local bodies by drawing the attention of political leaders on the huge gap between the local level’s rights and resources.
To function independently, local governments need human resources from diverse fields, but the federal government has failed to appoint administrative officers in many places, according to Shrestha.
The adjustment of civil servants in the three-tier of government was tardy and often controversial. The process of forming the provincial Public Service Commission dragged on for a long time.
Similarly, the federal government did not offer training and orientation on formulation of laws and other programs. Although some non-governmental organizations did train elected officials in some places, the training was insufficient.
In many areas, the performance of local governments is unsatisfactory. For instance, a study by the Ministry of Federal Affairs and General Administration shows 88 percent of local governments don’t have separate departments for waste management. Likewise, many have been unable to create municipal police.
Shrestha says these issues could be resolved, provided the center provides sufficient funds and resources.
“With enough funds we can hire experts to perform highly-technical tasks. We can ask the Public Service Commission to provide the human resources—but only if we get enough money,” he says.
Local governments have also been entrusted with the right to conduct their own census and collect records, but they are still relying on the data produced by the Central Bureau of Statistics (CBS).
Dissatisfied with the census conducted by the CBS, Khandadevi Rural Municipality in Ramechhap district recently deployed its own team to carry out the local census. Similarly, Chandra Nath Municipality in Jumla district is conducting its own census. But the majority of local units across the country say they lack resources to carry out their census duties.
The resource woes of local bodies have also hit sectors like health, education and environment.
Schedule 8 of the constitution mentions that basic and secondary education shall remain the sole jurisdiction of local governments and conditional grants from the federal government shall be spent on teachers’ salaries and other expenditures. But Shrestha says the center has been allocating less budget in education compared to what it used to when the country was a unitary state.
“The federal government has curtailed the spending rights of local units,” he says.
The constitution also allows local governments to develop and implement local curricula, so that children can be educated in their mother tongues. Again, there has been little progress in this area.
As per the law, local governments need to conduct Environmental Impact Assessment (EIA) before launching an infrastructure project, but more than half of them have no experts for the task. As a result, many are undertaking infrastructure projects without the EIA, which could have serious environmental consequences down the line.
Health is another area where sub-national bodies are failing to perform their duties. Although every local unit is required to have a 15-bed hospital, government data shows only 12 percent of them do so. Even then, these hospitals lack specialized doctors and technical staff, and patients are still compelled to visit cities for even basic treatment.
Many local units across the country are in the process of building hospital buildings, but they cannot run smoothly without enough trained health workers.
Despite having to work with limited funds and resources, some local governments are optimistic things will turn around. They say the first five-year term was spent learning the ropes of self-governance and building a foundation for future local governments.
Fiscal transfer in 2021-21
Amounts in Nepali rupees (in 1,000s)
Source: Natural Resources and Fiscal Commission
Exclusive rights of local bodies
· Municipal police
· Cooperative institutions
· Operation of F.M. stations
· Local taxes
· Management of the local services
· Collection of local statistics and records
· Local level development plans and projects
· Basic and secondary education
· Basic health and sanitation
· Local market management, environment protection and biodiversity
· Local roads, rural roads, agro-roads, irrigation
· Rural Municipal Assembly, Municipal Assembly, District Assembly, local courts
· Management of mediation and arbitration, local records management
· Distribution of house and land ownership certificates
· Agriculture and animal husbandry, agro-products management, animal health, cooperatives
· Management of senior citizens, persons with disabilities, and the incapacitated
· Collection of statistics of the unemployed
· Management, operation, and control of agricultural extension
· Water supply, small hydropower projects, alternative energy
· Disaster management
· Conservation of watersheds, wildlife, mines, and mineral
· Protection and development of languages, cultures and fine arts