With the establishment of the newly elected local governments (LGs) being handed full authority, development has now become the responsibility of the LGs. For this the central government (CG) in its budget for the year 2017/18 has set aside 225 billion rupees to be provided as grant to the LGs. The LGs will now have to focus on everything ranging from building infrastructures to managing natural resources with their own plans. But how much and how well the local concerns will be reflected in their responses is yet to be seen. Similarly, how will they share responsibility to meet national commitments made by CG in the global fora.  The early signs from a few cases of the declared projects are not very encouraging.

This year is important for development because for the first time the LGs will be planning and implementing their own development plans without having to wait for approval and orders from the CG. LGs will formulate the plans and mobilize technical people to design and implement their development work. They will put forth their demands for fund and the workforce from the CG. But, this is where problems seem to surface from.

For those in the CG, who have been exercising power in planning and implementing projects including fund management so far, it will mean giving up the power and adjusting to a new system where one has to learn the rules of the game. They will have to start listening to those who listened to them in the past. It’s a complete reversal of the wheel, a situation for which one year may not be enough to get accustomed to.  A longer transition, however, would mean less time left for the elected leaders of their 5 year tenure to deliver on the promises they made to their voters. They would like to do things as fast as they can. Therefore, even in absence of any program the newly elected leaders in some municipalities announced popular programs such as increasing the allowances of the senior citizens and making public parks.  The CG objected to this and sent circular preventing the LGs from using the grant on any project that they feel like spending on. The CG is busily working on making the rules for the LGs, which the LGs argue is not in line with the constitutional provision that provides the LGs full autonomy in exercising their rights to formulate rules and plan activities.

The thing might get messier in the days ahead, because the LGs need support of engineers and resource managers (experts), who are with the technical departments of the CG.  Since the administrative restructuring has not happened yet, it is not clear how the LGs will get help from these technical departments. The financial federalism is directly linked with how the administrative restructuring will shape out, and if one takes the word of the chief secretary of the CG, financial federalism is a difficult task.  Now, the LGs have money but no plan, no technical workforce nor legal frames and guidelines to implement the projects. The natural resource and financial commission that is supposed chart the legal basis has yet to be formed. Technically the LGs can hire their own staff, but the CG has to adjust over 70,000 of its staff and therefore will ask the LGs to rely on CG for the entire workforce it needs. And this brings to another problem.

While deputing its staff to the LGs, the easy way out for CG would be to send the district staff to the LGs. The staff that the districts had earlier will now have to be distributed among the LGs, which are anywhere between 5 (Mustang) to 17 (Morang) in the district. This simply means the number of staff will not be sufficient to be deputed to all the LGs. And who will they (the deputed staff) be accountable to – the LG or the parent ministry- is another puzzle to solve. Naturally, the CG staff will want to maintain the status quo and stay under the command of the ministries. Most agencies and the people responsible within the CG are clueless about how it would be settled. Due to lack of sufficient homework and consultation, a well intended act of devolving power to the LGs through federal structure and give the required impetus to the local development, could end up with numerous compromises which might dampen the spirit of the whole restructuring.


With support from Irene

Until next