Nearly a decade after federalism, local governments still struggle with structural and jurisdictional bottlenecks. Delays in drafting essential framework laws by federal and provincial governments have led to jurisdictional ambiguities and hindered power devolution. Financial and human resource constraints, including limited internal revenue sources and inadequate support from federal-province governments, further challenge local functions.

As the dust settles on this ambitious reformation, the gap between policy intentions and ground-level execution becomes apparent. This discrepancy is particularly evident in critical sectors like health and agriculture, where policies often fail to translate into tangible improvements for the populace.

Health sector struggle

Health care is a cornerstone of community welfare, and local governments often prioritise it in their annual policies and programmes. However, the ground reality starkly contrasts this vision as health centres lack basic medical equipment like sphygmomanometers and stethoscopes. The dysfunctionality of these simple tools is not just an oversight but a systemic neglect.

The root of this problem is inadequate budget allocation in the health sector. The World Health Organisation (WHO) standard suggests that at least 10 percent of the government budget should be dedicated to health, yet allocations often fall below this. This shortfall is not merely a numerical issue but a failure of prioritisation. The consequence is a lack of resources for even the basic administrative needs—stationery, maintenance and utilities—that cripple health centres’ functionality. The centralisation of programme management further exacerbates these issues, as local health initiatives often depend on federal conditional programmes, limiting local governance’s scope.

The constitution aims to empower local governments, but effective health sector management is challenging. The federal government’s ambitious initiative to build hospitals demonstrated poor coordination. Of the 753 local levels, 655 lacked basic hospitals. In November 2020, the KP Sharma Oli-led federal government began constructing in over 300 municipalities. Despite a two-year goal, only 27 were completed by mid-2024, as per media reports. By January 2024, 282 municipalities hadn’t submitted the detailed project report to the federal Ministry of Health and Population, and many couldn’t acquire the necessary land.

Pralad Karki, chief administrative officer of Indrasarowar Rural Municipality, noted that while they planned to build a five-bed hospital with federal support, the requirement to own three ropanis of land made it impossible. Many local governments are ill-equipped to handle the financial burdens of new facilities. Considering factors such as the human development index, geographical location and the demands of external service on health institutions, inter-municipal cooperation could help establish basic hospital programmes. The decision-making process often bypassed local input, revealing a critical flaw while implementing federalism.

The government mandates that 98 (local: 44, province: 32 and federal: 22) types of medicines be provided free. The federal government also allocates budgets for local governments through conditional grants to procure free medicines, but the latter has not ensured a year-round supply. Procurement often involves issues like non-compliance with laws and prioritising cost over quality. Complaints about ineffective medicines and lack of transparency are common, impacting economically disadvantaged and marginalised communities relying on these services. Improving the quality of medicine is essential for better health outcomes and preventing financial burdens on vulnerable populations.

Neglected agriculture

Agriculture, a sector on which a significant portion of Nepal’s population depends, suffers from a similar fate. The rhetoric around agricultural development is robust, with local governments frequently touting it as the economic backbone. However, such visions remain unrealised due to inadequate budget allocations. For the fiscal year 2024-25, the municipality allocated only 0.85 percent of its budget to agriculture.

Farmers face challenges from market access to fair pricing. Middlemen dominate supply chains, often leaving farmers with meagre returns for their products. While some local governments have attempted to address these issues—Dhurkot Rural Municipality of Gulmi, for example, planned to support farmers by purchasing unsold products at fair prices—such initiatives often falter.

The reasons include a lack of proper infrastructure, poor planning and a disconnect between policy and practical needs. The rural municipality’s FY 2023-024 plan included setting support prices, guaranteeing the purchase of products and providing vehicles and resources to transport goods to the market. However, farmer groups were hesitant to participate due to negative experiences with a municipality-operated cooperative that failed to compete with local shops and buy perishable goods, which led to a lack of trust and interest.

The disconnect between planning and execution is evident in the failure of cold storage facilities, which were meant to help farmers store and sell their products at better times. Such failures are not isolated incidents but symptomatic of a broader issue: Inadequate feasibility studies and lack of foresight in project planning. Grant programmes managed ad hoc by elected officials, often based on political connections, have resulted in wasting state funds.

Agricultural subsidies provide resources and incentives that are vital for enhancing production. However, governance challenges such as political misuse of funds, inadequate information dissemination and unfair distribution favouring those with political connections exist. Transparency issues also arise, with subsidies often going to non-existent firms and payments made without clear policies or proper assessments.

Underlying issues

Effective governance requires clear legislation; however, delays by federal and provincial governments in drafting essential laws have created jurisdictional ambiguities. Although local governments have the constitutional right to make laws, slow progress compels them to rely on ad hoc decisions and secondary legislation, neglecting the needs of critical areas. Local representatives have suggested the appointment of legal officers to bridge the gap, noting a lack of enough human resources as a critical factor for the delay. The local levels that employed legal officers on a contractual basis managed to draft relatively more laws, emphasising the importance of adequate staffing in addressing legislative needs.

Addressing these challenges requires aligning budget allocations with policy priorities and ensuring adequate funding for health and agriculture. This commitment should go beyond symbolic gestures, translating into substantial financial support and ensuring these funds are used effectively and transparently. Robust monitoring and evaluation systems can identify inefficiencies and corruption.

It is essential to create attractive conditions for professionals and invest in financial management and technical skills training for local officials to tackle human resource challenges. Local governments should also establish rigorous feedback mechanisms for community concerns to ensure policies and programmes address local needs. A concerted effort across all government levels is needed, with federal and provincial authorities facilitating genuine devolution through legislative reforms and practical support to successfully implement health and agriculture-related programmes.