Central planning versus federalismThe National Planning Commission is a relic of the centralised planning era of Panchayat.
Nepal's nascent federal polity has been constantly under attack mainly from two rather opposing poles of politics. Former royalists saw the country's entry into federalism as the most responsible factor for the abolition of the 240-year-old monarchy. Ultra-left nationalists, who despite having accepted adult franchise, view federalism as a conspired "expansionist design" for the ultimate disintegration of Nepal. A proposal to abrogate the federal system by Rabindra Mishra, a co-chair of the Bibeksheel-Sajha Party—the self-proclaimed alternative political force of Nepal that is yet to debut in the federal Parliament—created a sort of social media storm last week. Mishra, too, in fact, is inherently a royalist. At the opposite end, Samyukta Janamorcha, a small radical communist faction and now part of the five-party ruling alliance, has been opposing federalism since it took centre stage in the national political debate in 2006.
Apart from these innate detractors due to their essentially anti-democratic orientations, federalism has also come under constant attack from very unassuming political quarters claiming, on the face of it, to be defenders of the polity; like the Nepali Congress and the CPN-UML, the parties that have taken turns forming the government.
Central planning antithetic
Last week, the coalition government headed by Nepali Congress President Sher Bahadur Deuba appointed economist Biswo Poudel as the vice-chairman of the National Planning Commission. It has happened at a time when it is already considered too late to liquidate this remnant of autocratic heritage or, if not, overhaul it in a fashion that contributes to the consolidation and operation of the current federal system of governance.
Apparently, the National Planning Commission, conceived in 1956 and baptised several times since then, is an archaic relic of the centralised planning era of the Panchayat dictatorship. Historically, the very idea of central planning, since its conceptualisation by the then Soviet Union in 1929 under Joseph Stalin as an instrument to consolidate his grip on fiscal resources, remains abhorrently antithetical to the federal principles of devolution of power to the potential beneficiaries of the development plans and projects. Even in Nepal, during the six and a half decades of its existence, the National Planning Commission has acted as an overarching mechanism in selecting development projects in the interest of influential politicians of the day at the centre and forcing the exchequer to allocate the budget for the same. The travesty is that it acts like an "omniscient and omnipresent" saviour in selecting projects even for far-flung and remote districts, the ground realities of which are barely known to its decision-makers.
Also, the first elected government after the promulgation of the current federal constitution headed by KP Sharma Oli that ruled for three and a half years not only continued with the National Planning Commission to the detriment of the institutionalisation of federalism, but deliberately infringed upon the powers that had been unequivocally devolved to the sub-national governments by the constitution. During Oli's premiership, the chief ministers of the provinces, despite their party and personal loyalty to him, constantly exhibited the temerity to cry foul at the federal government for its interference, not supporting the lower tiers of governments and often stifling their independence to govern as enshrined in the constitution.
Article 234 of the constitution has made provision for an Inter-State Council headed by the prime minister "to settle political disputes arising between the centre and the province, and between provinces". It comprises the minister of finance and the chief ministers of the provinces as ex-officio members. But Oli rarely took any initiative to regularly hold its meetings and address the concerns of the provincial governments. The council even failed to draft its working procedure during his rule. Instead, whenever any situation of federal-provincial conflict arose, he tangibly exhibited an intent at recentralisation and often reiterated throughout his tenure that the "provinces are mere administrative units of the centre; not independent governments in themselves".
With regard to development administration, the provinces also committed blunders by imitating the federal government's centralised planning exercise by instituting their own respective planning commissions in the provincial capitals which, for all practical purposes, compromised the freedom of the local governments to carry out their own plans and independently present fiscal bills in their "legislatures" known as municipal assemblies. The federal and provincial governments both shirked their key responsibility to empower the local governments so as to enable them in project selection, budget planning, allocative efficiency and transparent public procurement practices.
The Constitution of Nepal 2015 does not recognise the National Planning Commission. Instead, it has made a provision for the National Natural Resource and Fiscal Commission under Part 26. In line with universal best practices in federalism, its mandate is to devise formulas for fiscal assignment problems in all five major aspects of federal public finance, namely expenditure assignment, revenue assignment, grant assignment, royalty assignment and loan assignment.
Constitutionally, the National Natural Resource and Fiscal Commission is and should be the most important commission in the federal scheme of things. But, in practice, in a clear detriment to constitutional aspirations, the National Planning Commission still rules the roost and grossly overshadows the National Natural Resource and Fiscal Commission. It has obvious consequences on the future of the federal budget systems and entire fiscal federalism operations. It is untoward on the part of the government to ignore the long ongoing debate to liquidate the National Planning Commission and strengthen the National Natural Resource and Fiscal Commission in the interest of the federal polity of the nation that is yet to take firm root. This debate had started in Nepal much before the Indian government converted its National Planning Commission into the NITI Ayog in 2014.
Integrity in question
An additional quotient is the aberration in intellectual integrity among those learned economists seeking appointment to the National Planning Commission that has also effectively disserved federalism. Whether federalism or mere decentralisation, the importance of "close to the people" and "participatory" development planning can never be overemphasised. But ironically, those economists, educated at educational institutions in the democratic West that put all-out emphases on decentralised and people-centred development, are not even morally hesitant to taking up key positions in institutions like the National Planning Commission that have not only become redundant, but also, by its very concept and design, directly infringes upon the constitution's federal separation and balance of state power.