After the federal and provincial elections slated for next month are completed, the country will formally move from a unitary system of government to a federal system. Previously, local governments were given limited rights. This time, they will be given constitutional responsibilities. However, there are going to be many problems in the effective implementation of federalism since it is a completely new concept for us. Basically, these problems will be related to provincial management. 

Setting up structures

The constitution provides state power to the provinces. State power means functioning through three bodies, namely the legislature, executive and judiciary. The legislature here means the provincial parliament, which makes laws. The provinces function on the basis of these laws. The executive means the provincial council of ministers. It will have the responsibility to issue general directives and regulate the governance of the province. Similarly, the judiciary is related to the courts and justice. High courts and other judicial institutions fall under the purview of the judiciary. The judiciary punishes the guilty when the laws are violated. These institutions should be established at the initial stage so that the provinces can deliver basic services properly.

The provincial legislature is expected to consist of 550 members. Provincial parliament buildings need to be built. The provincial executive makes the programmes and policies and executes the laws passed by the provincial legislature. The chief minister in every province will be appointed on the basis of a majority 

in the provincial legislature, and the council of ministers will be formed under his or her chairmanship. Similarly, institutions related to the judiciary include the high court and residential buildings for the officials.

As per the constitution, the head of the province will appoint the chief minister and the council of ministers. He or she will perform a presidential role in the province. The government should appoint a person who is capable of protecting the constitution and possesses sufficient knowledge about federal-provincial issues. The Ministry of General Affairs (MoGA) has proposed having seven ministries at the provincial level. The government should approve these ministries at the earliest. However, officials at the Office of the Prime Minster and Council of Ministers (OPMCM) have proposed establishing around 10 ministries and eight departments at the provincial level.

They have said that at least Rs15 billion will be needed to erect the required buildings, and that around 6,000 officials will have to be hired to staff the legislative, executive and judicial branches. As per the constitution, the provinces will have 21 exclusive functions. Similar to the main state organs, the legislature, executive and judiciary, other subordinate state organs need to be created at the provincial level. For example, the first provincial responsibility is related to police administration and maintaining law and order. To maintain provincial security and law and order, a police administration institution is essential. 

Currently, there are three security related institutions at the national level under the Ministry of Home Affairs. They are the Nepal Police, Armed Police Force and National Investigation Department. Likewise, there are immigration, prison management, police record management and national ID management at the department level.

Further, regional and local level police units have been formed under the deconcentration model. Like at the Home Ministry and its decentralised organs, there will need to be similar organisations at the provincial level. For example, the Province Police Headquarters will be a vital one. Similarly, the Armed Police Force and Provincial Investigation Department are important at the provincial level.

Similarly, the second exclusive functional responsibility of the provinces is related to banks, financial institutions, cooperatives and foreign assistance. Within the financial system, sub-responsibilities such as provincial reserve fund, other government office funds and accounting systems are included. Currently, at the central level, the Financial Comptroller General’s Office (FCGO) is in place. The FCGO is responsible for overseeing all government expenditure against the budget, tracking revenue collection and other receipts and preparing consolidated financial statements of the government. An institution like the FCGO is also required at the provincial level. Basically, these institutions need to be based at the provincial headquarters or nearby.

Managing challenges

Other institutions that need to be created at the provincial level are radio, FM and TV stations, revenue collection and mobilisation agencies, civil service administration, public utilities, universities and hospitals. Other responsibilities include inter-provincial and district council management, trade management, highway and vehicle management, service commission, land administration and implementation, natural resource management, language, culture and religion management, forest, water and environment management, agriculture, livestock and industrialisation and guthi management.

For the effective implementation of these constitutional responsibilities, some responsibilities may need two or more institutional structures, and others may not require that many. However, according to a rough estimate, we need an additional 21 administrative structures. According to officials at the OPMCM, it will cost a minimum of Rs6 billion to build these structures. Similarly, we will need a total of 7,000 employees to staff them. Therefore, a total of Rs21 billion is required to build the minimum provincial structures and 13,000 employees are needed to perform the functional responsibilities. The amount of money required is not a huge amount, but a large recurrent budget will be needed to operate the institutions.

The recently elected local level representatives are experiencing many problems. Basically, these problems are related to policy, laws, staffing, financial resources and administrative buildings. Regardless of the conditions in which local governments existed in the past, they had some revenue sources, employees and office space.

However, the provinces will have to start from scratch. They neither have an institutional setup nor any staff and financial resources. In such a situation, the government should be serious about making arrangements at the provincial level. The coming days will be very difficult if the government fails to manage the potential challenges.

Devkota is a fiscal federalisation and local government analyst