Article 232 of the constitution clearly states that federalism in Nepal is based on the principles of cooperation, coexistence and coordination as it visualises a non-hierarchical relationship between the federal units. Further, the constitution spells out the spheres of government as autonomous (exclusive functional assignments) and interdependent upon each other through concurrent functions. The constitution provides the sub-federal units (provincial and local governments) extensive powers to prepare and execute an annual budget, formulate and implement laws, policies and plans on any matters within their respective jurisdiction.

According to Article 235 of the constitution, Parliament is to make necessary laws to maintain coordination between the federal units. In accordance with this provision, Parliament has enacted a law entitled Federal, Provincial and Local Level (Coordination and Interrelationships) Act. This Intergovernmental Coordination law provides the basis of inter-governmental relationships between the spheres of government, guidelines to prepare legal documents, policies and plans, a basis for drafting laws for exclusive and concurrent powers, formation of the National Coordination Committee, sectoral committees, settlements of inter-governmental disputes, and so forth.

Informal relations

In fact, intergovernmental relations are to be refined through experience and practice as opposed to being directed by the constitution and laws. We can see examples of this in classical federal countries like the United States, Switzerland, Germany, Canada and Brazil. Although the Intergovernmental Coordination law has just been approved by Parliament in Nepal, some provisions came into practice before the law was ever enacted. Further, there have been better practices than what is written in the law as well.

For example, the prime minister has directly and indirectly discussed with the chief ministers of the provinces, while the speaker/deputy speaker of the House of Representatives and the chairman/vice-chairman of the National Assembly have consulted with the speaker/deputy speaker of the provincial assembly on various federal issues. The thematic committees of Parliament, have also started the practice of interacting with the thematic committees of the provincial assemblies. The federal sectoral ministries have also started to discuss with their provincial counterparts.

The United States, Canada and Brazil do not have any constitutional or legal arrangements for intergovernmental relations. However, there is no rift in intergovernmental relations in these countries. In Switzerland and Germany, some good aspects of intergovernmental relations are written in the constitution. In Germany, the legislature bridges the gap. The constitution has given mostly legislative rights to the federal government and executive power to the provinces (Landers). The Landers implement the policies, rules and laws made by the federal legislature. In Switzerland, the constitution contains the principles of intergovernmental relationships. The constitution stipulates that the federal government and the provinces (Cantons) should respect and assist in the implementation of each other's rights.

The role of the bodies that strengthen the relationship between the various levels of government is crucial in forming common views on issues of common concern among the federal units and to resolve disputes, misunderstandings and differences of opinion. The more active these institutions are, the more effective the implementation of federalism will be. However, this does not mean that federalism is strengthened solely by having such institutions.

There are many intergovernmental relations institutions in Nepal. They include the Constitutional Bench, Inter-Provincial Council, National Natural Resources and Fiscal Commission, District Coordination Committee, Intergovernmental Fiscal Council, Provincial Coordination Council, National Coordination Committee and sectoral committees. The first four of these institutions are bodies mentioned in the constitution itself. The rest were created by law.

The constitution provides for the formation of a Constitutional Bench in the Supreme Court to resolve disputes between the federal units. The Inter-Provincial Council is a dispute resolution body between the federal and provincial governments or between different provincial governments. The National Natural Resources and Fiscal Commission also has a responsibility to make suggestions in case of disputes between different spheres of government over the use of natural resources. The District Coordination Committee is responsible for delivering developmental coordination between various spheres of government working in the respective district.

The fiscal council seemed to be a bit more active among the newer institutions created by law. However, its last meeting was held more than a year ago. The council is a forum to discuss fiscal issues between federal, provincial and local governments. The Provincial Coordination Council is another important forum for intergovernmental relations as it facilitates planning and budgeting issues between provincial and local governments. Earlier, this provision was included in the Local Government Act. The Intergovernmental Coordination law has scrapped this provision from the Local Government Act and included it in the Intergovernmental Coordination law.

The Intergovernmental Coordination law also includes the provision of a National Coordination Committee and sectoral committees. These are newly created institutions and have not been activated yet. Sectoral committees are the bodies that strengthen the thread of inter-level relations. Such committees are formally and informally active in almost all federal countries.

Are they necessary?

A few weeks ago, I had a working paper published from the Andrew Young School of Policy Studies at the University of Georgia in the US in which I have elaborated all the Nepali intergovernmental relations institutions discussed here. Regarding the justification and necessity of these institutions, Professor Roy Kelly from Duke University had questioned whether they are really necessary. Similar to Kelly’s version, I had questioned the effectiveness of these institutions at the State Affairs and Good Governance Committee of the House of Representatives on June 7, 2020. As Kelly said, I don't think much is needed.

Whatever intergovernmental relations institutions we have, we should work to make them more active, fruitful and exemplary. The more active and effective these institutions are, the more the chances of success in the implementation of federalism.