The government has addressed some of the demands of the disgruntled Madhes-based parties by amending the Constitution, but the dispute over revising the federal boundaries has not yet been sorted out. Meanwhile, a fresh debate on restructuring the local bodies (LBs) has begun. The government has been busy creating new municipalities by merging village development committees (VDC) and, in this context, restructuring the LBs has emerged as the central issue on the local governance front.

Legal provision

The constitution has a provision for having a three-tier system of government—federal, provincial and local. Article 56 (4) states that there will be local governments (LGs) in which “gaon palikas” will replace VDCs while the existing municipalities will remain unchanged. The existing district development committees (DDCs) will be replaced by district councils. As per the constitution, the district council will coordinate between the gaon palika and the municipality. The LBs restructuring commission can be formed within six months of the promulgation of the constitution. Its key role is to determine the number and territory of the gaon palikas, municipalities and protected or autonomous regions.

The constitution has granted 22 types of rights to the LBs, ranging from collecting local taxes to handling education, health, drinking water, road, agriculture, irrigation, cooperative, environment, hydropower, wildlife, mine, language, culture, energy and disaster management. Various aspects such as population, geographical area, administrative appropriateness, population density, historical, cultural and linguistic aspects of the locality, infrastructure development, utilisation and potentiality of natural resources and other matters should be taken into consideration while restructuring LBs. Different parameters should be prepared for different geographical regions, namely the Tarai, hills and mountains, due to their differing population densities. The government has increased the number of municipalities from 58 to 217 and slashed the number of VDCs from 3,915 to 3,157. After the LBs have been restructured, the number of VDCs and municipalities should be limited to 1,000 and nearly 200 respectively.

Homework needed

The municipalities that the government has declared in the last one year were a result of public demand. We have no option but to convert urbanised VDCs into municipalities, but it will be unjust to do so without proper homework. A high-level commission is going to be formed, and its suggestions should be considered before making any announcement. We have to consider certain principles while creating municipalities.

For example, Lazy Lake municipality in Florida, US has a population of 24 persons and is 0.06 square kilometres in size. Despite that, it was declared a municipality because it originally contained single-family homes  in a small housing development surrounding a lake named Lazy Lake, and on the basis of the ecological division, the Local Self-Governance Act has specified a population of 10 to 20,000 to be declared a municipality. Like Lazy Lake, we should also create local governments (gaon palika or municipality) for the social, economic and cultural development of endangered castes and ethnic groups and the preservation of protected areas even though the population is very small.

Settlement development

Great attention should be paid while restructuring regions with small populations and incomes and obstacles for infrastructure development due to geographical complexities. VDCs are often scattered in hilly and mountain regions, and it is extremely difficult to provide services like road, electricity, drinking water, education, health and transportation in far-flung areas. Such areas should be shifted into settlement areas by providing all the services. This way, the number of VDCs can be reduced considerably. More than 80 percent of the VDCs are not financially sound, and only 50 percent of the municipalities are self-sufficient while the rest depend on government grants. Therefore, it is better to amalgamate the LBs that are not self-sufficient. A large number of LBs alone does not ensure services to the local people.

While restructuring local bodies, an organisational and managerial structure based on classification should also be prepared. For example, municipalities can be classed into capital city, metro city, sub-metro city, municipality and sub-municipality. Likewise, gaon palikas can be classed as rural or urban. For instance, Mexico City, Washington DC and New Delhi are capital cities which are constitutionally recognised as capital metro cities. They are not under the control of the provinces and have been granted the same rights as the provinces. Similarly, the Kathmandu Valley could be made a capital city. It will not be so easy after the province demarcation and division of rights have been accomplished. However, it could be possible in the context of forming a federal commission to change the demarcation of the provinces.

International experience

Some countries in Europe have decreased the number of municipalities to a large extent. For example, between 1962 and 2009, Denmark has reduced the number of municipalities from 1,388 to 98. Similarly, Sweden, Greece and Britain had 2,281, 5,774 and 2,008 municipalities in 1950 respectively. In 2009, these countries had reduced the number to 290, 1,034 and 435 respectively. Municipal amalgamations have also taken place in South Africa, Israel, Australia, Canada and Japan. Again, the process has been driven by economic forces, seeking to increase efficiency instead of supporting low-capacity administrations in tiny municipalities.

Similarly, we should cut down the number of VDCs and municipalities, and smaller municipalities should be amalgamated into larger ones. For example, a single metro city can be developed by merging Dhulikhel, Banepa, Panauti and Panchkhal in  Kavre district. Likewise, the small municipalities around Biratnagar, Janakpur, Pokhara, Bharatpur, Butwal, Nepalgunj, Dhangadhi and Bhimdutta can be merged into them to create metro cities. Like in other countries, there is also a high possibility of making Kathmandu a capital city by merging all the municipalities into it.

Devkota holds a PhD in fiscal decentralisation and is a former member of the Local Bodies Fiscal Commission