Furthermore, local bodies deliver various public services—primary schools, primary healthcare, access to drinking water, local roads connecting service centres and markets, and extension services for small farmers. Overall, local bodies play an important role in pro-poor growth by enhancing public service. They establish a system for sustainable economic development at the local level, which is monitored through regular interactions with the people they serve.

Centrally controlled

But when it comes to the state of local bodies in Nepal, the situation is unfortunate. Local elections have not been conducted since 2002. As a consequence, local bodies have been devoid of elected representatives. These bodies have been functioning under the full control of centrally appointed government personnel for more than a decade. Hence, it is imperative to discuss how local services can be delivered effectively and how the voice of denizens can be addressed properly in the absence of elected representatives in local bodies. In this regard, this article compares the standard principles of local bodies with the drawbacks of practices and policies and suggests appropriate ways for the delegation of rights and authorities.

According to the first principle of local self governance, elected representatives must be present at the local level. Similarly, the second principle argues that senior staff (Local Development Officer and Executive Officer, in our case) are required to be appointed locally by the local bodies. Other principles include: discretion to raise revenue, expenditure responsibilities, downward accountability, planning and budget autonomy, transparency, effectiveness in monitoring and evaluation, and hard budget constraints. However, local bodies in

Nepal have not been able to function according to these established principles and norms.

In Nepal, the Local Self Governance Act (LSGA) 1999 provides local bodies with limited financial autonomy, along with the right to collect tax revenues, service fees, and fines. But more than 23 sectoral Acts have clauses contradicting this provision, among them are the Education Act, the Forest Act, the Environment Conservation Act, the Judicial Administration Act, the Local Administration Act, the Land Revenue Act, the Mines and Minerals Acts, the Public Roads Act, the Statistics Act, the Sports Development Act, the Vehicles and Transport Management Act, the Water Resources Act, the Solid Waste Management Act, the Consumers Protection Act, and the Animal Health and Services Act. These contradicting Acts have adversely affected the effective implementation of LSGA provisions. In such a situation, it would be unfair to characterise local bodies as not providing effective services to the people.

Dwindling share

Besides, the government has been discriminating against local bodies with regards to resource allocation. In the fiscal year 2009/10, the share of local grants compared to the total budget of the government was 5.76 percent, which came down to 2.9 and 2.4 percent in 2013/14 and 2014/15 respectively. At the same time, there are numerous conditions to even unconditional grants, contradicting established principles, and dozens of manuals and guidelines issued by the government, giving a hard time to local bodies. Employees of local bodies bitterly complain that the government is bypassing them in local level governance and that it does not pay due attention to establishing a service commission for the management of staff at the local level.

Despite the fact that the LSGA provides funds, functions, and functionaries to local bodies, its implementation has not been satisfactory. For example, the Decentralisation Implementation Plan (DIP), which was prepared and approved in 2002, has not been implemented yet. The DIP should have been an important step towards effective implementation of local self governance, as it had committed to amending the Acts contradicting the LSGA within the first year of its approval. Furthermore, the plan had also identified sectors for devolution with a specified timeframe and strategy, which is still pending. The major reason behind this is that during the 15 years of the LSGA, the Decentralisation Implementation and Monitoring Committee (DIMC), chaired by the prime minister with the main objective of implementing the LSGA properly, has not been actively functioning. There has not been any meeting since 2009, and prior to this, only four meetings were held.

It is well known that many service delivery functions of local bodies overlap with the central government. Local bodies are also either overfunded or underfunded. Their systematic, institutional, and individual capacities are weak and internal control mechanisms and audit systems poor. Specifically, there is a lack of synergy among the programmes being implemented at the local level due to weak coordination, cooperation, communication, and networking among the agencies providing services.

At present, the local bodies have not been able to utilise their maximum fiscal authority. The main reasons behind this are the absence of elected representatives, contradicting sectoral Acts, and a lack of coordination with other stakeholders. Owing to the lack of sufficient resources, local bodies are dependent on grants from the centre. Furthermore, decentralised governance in Nepal has not been able to find a balance between functions, funds, and functionaries to produce better results for local democracy. In fact, there is a mismatch between functions and funds, paralysing local bodies.

Misplaced priorities

So it is surprising that federalism and provincialism have received so much attention in the discussion of state restructuring whereas local government has been given a low priority. Even in the various Constituent Assembly committee reports, the role of future local governments has been minimised and very few rights for local governments have been proposed. For example, most of the expenditure and revenue assignments presently enjoyed by local bodies have been proposed for provincial governments. At this period of constitution writing and state restructuring, it is wrong to ignore the fact that local bodies are governing bodies that are closest to the local people. Therefore, local bodies should be provided with the maximum means and resources.

The primary spirit of federalism is to equip the people with rights to ensure that they can determine their own fate. However, to what extent rights and authority should be delegated to local governments depends on the interest and necessity of the local people themselves. Principally, in federalism, the central government clearly states that constitutional and legal provisions of income and expenditures should be mandated to lower units. To manage and carry out each and every level of governmental activity, economic means and resources are necessary. If a nation is economically sound and self-dependent, such a system can work in a way that is both sustainable and satisfactory to the people.

Devkota holds a PhD in fiscal decentralisation and is a former member of the Local Bodies Fiscal Commission and can be reached at [email protected]