New Federal Nepal- A glimpse

With the completion of general election Nepal has embarked in a new phase of federalism.

Following are the five key points regarding the federal structure as mentioned in the constitution.

  • Federal Government- Election for the Federal Parliament will elect 275 members for the House of Representatives- 165 from FTFP system and 110 from PR system. Apart from House of Representatives, Federal Parliament will also consist of National Assembly. Thus Federal Legislature will have two Houses known as the House of Representative and the National Assembly which shall also be called as Federal Parliament. Amongst the potential 59 members, 56 members of National Assembly will be elected by a committee consisting  of State Assembly, chairpersons and vice-chairpersons of the Village Bodies and Mayors and Deputy Mayors of the municipalities; whereas three members (consisting at least one female) will be nominated by the president on recommendation of the Government of Nepal (GoN).
  • Provincial/state Government- Provincial election will elect the State Government responsible for administering the governance of the concerned state. As per the constitution, each State Assembly will consist of certain number of members.  In this regard, the state members getting elected via FTFP system is twice as many as the number of members elected to the House of Representative (via FTFP system) from the concerned state.  Accordingly 60% of the members will be elected from FTFP system, whereas 40% through PR system.  For instance- As province 3 has 33 constituencies, 66 state members will get elected via FTFP system- accounting to 60% of the total members. The remaining 40% -accounting to 44 state members- will get elected via PR system. As a result State Assembly of province 3 will have 110 state members.  Each province/state will have a Chief of State as appointed by the president of the GoN. The Chief of State will be the representative of the GoN. State Assembly will have State Council of Ministers consisting of maximum 20% of the total number of members of the State Assembly, including the Chief Minister.
  • Local Government: Local level election will elect the local executives consisting of Village Executive or Municipal Executive. Village Executive will consist of Chairperson, Vice-Chairperson, Ward Chairperson elected from each Ward and other members as elected. Likewise, Municipal Executive will consist of Mayor, Deputy Mayor, Ward Chairperson elected from each Ward and other members as elected. As per the spirit of the constitution local level election in 753 local bodies has been successfully completed.
  • Revenue Model: The constitution provides authority to Federation, State and Local level to impose taxes on matter falling within their respective jurisdiction. The taxes collected will then be distributed to the State and Local level based on their expenditure and revenue capacity. Each state will then allocate the funds to its subordinate local level based on their expenditure and revenue capacity.  
  • Power structure: Law endorsed by the Federal Government may be applicable to the whole or part of the territory of the nation. Whereas, law endorsed by the state will be applicable to the whole or part of the state. Nevertheless, Federal Government will have a full authority to give necessary direction to any State on matter of national importance.  Likewise the GoN can directly or via State Government give necessary direction to Local and Municipal Executives.     

With the completion of the Federal and Provincial election Nepal will begin a new political chapter guided by the notion of federalism. As mentioned above there seems to be a multifaceted benefits of federalism, however economic cost of the system is of primary concern. Put differently, under federalism the ability of each state to thrive economically will be a major issue as they have to be self sustainable.  Likewise the adequate and equitable distribution of resources to each state can prove to be a major challenge for the Central Government. Furthermore, in a country where vandalism and violence over a minor issue is a routine task, it will be interesting to analyze the required coordination among Central, State and Local Government. 

Niraj K.C
Niraj is currently working as an economist beed and has over three years of experience working in the financial sector. He holds a in International Business and Economics from University of Hohenheim, Stuttgart, Germany with specialization in International Trade and Financial Econometrics. He is also a MBA graduate from Kathmandu University School of Management (KUSOM) with a major in Finance.
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