July Analysis: Federalism 

After frequent upheavals, finally a government formation took place in Koshi Province under Chief Minister Uddhav Thapa. The local levels in Nepal have been struggling to come up with annual budget, hampering development activities. The first meeting of national coordination council was held to discuss several agenda directed at enhancing coordination among the states and federation to institutionalize federalism.

Timeline of major events

 

Date	Events
6th July	Uddhav Thapa appointed as Chief Minister
7th July	UML submitted a writ petition at the Supreme Court against the government formation in the Koshi Province
27th July	Supreme Court dismissed the appointment of the Uddhav Thapa
2nd August	Uddhav Thapa re-appointed as Chief Minister
2nd August	First ever meeting of National Coordination Council

 

The Koshi Crisis

The provincial government in Koshi has been going under turbulent crisis for over three months, firstly on the naming of the province, and the political turmoil regarding the appointment of Chief Minister. Koshi state government led by Hikmat Karki of CPN-UML lost its majority on June 30^th after Maoist withdrew the support of UML-led government.  For a 93 membered Provincial Assembly, 43 members are required for obtaining a majority. After the Maoists left the government, Koshi Chief Minister Hikmat Kumar Karki, lost the post in a vote of confidence with meagre of one vote. He obtained only 46 votes, with 40 from UML and 6 from Rastriya Prajatantra Party (RPP). The political fiasco was further triggered by the RPP, which had significant role in formation of Koshi government deciding to stay neutral. The crisis further evolved over the role of province assembly speaker, and province head. 

Controversial role of speaker and province head

 

On July 6^th Uddhav Thapa was appointed as the new Chief Minister by Parshuram Khapung, the head of Koshi province. Thapa was appointed in accordance with Article 168(2) of the constitution which states that in absence of majority in the State Assembly, the Province Head shall appoint member of the State Assembly as the Chief Minister who is capable of obtaining a majority with support of two or more parties. With the 47 signatures, 46 from provincial parliamentarians and one from Speaker Baburam Gautam, Uddhav Thapa led a new majority government. The inclusion of the Speaker drew vehement criticism from opposition parties as it is against the envisioned role of Province Speaker. A Speaker is not a person rather a neutral institution.
On July 7^th, the UML submitted a writ petition at the Supreme Court against the government formation in the province. UML alleged the process as unconstitutional. The UML demanded government formation under 168(3) of the constitution, as the Uddhav Thapa government under 168(2) was unconstitutional. There was a fiasco among the political parties pertaining to the provisions in constitution and the ways in their respective interpretation. Such role of Province Head and Speaker disregarding the provision in the constitution stirred tensions.

 

Supreme Court decision

 

On July 12^th, the Supreme Court refrained the Uddhav Thapa led-government from taking any long-term decisions, but declined to put back Hikmat Karki as a Chief Minister. The Thapa led government couldn’t make any appointments or introduce any new bills in the assembly until the judgement was rendered. The complexity of the petition and the concerns of legal questions demanded full bench of Supreme Court to resolve the problem.
On July 27^th, the Supreme Court dismissed the appointment of the Uddhav Thapa. The Court ordered to appoint a person who could get a majority within seven days. On the same day, the Chief Khapung of Koshi Province urged the parties to claim their support for the establishment of a new government in accordance with Article 168 (2) of the Constitution by August 1.

 

Victim of Power Politics at Federal Level

 

On August 1^st, the speaker of the Provincial Assembly Baburam Gautam resigned from the post which finally secured the Chief Minister seat of Uddhav Thapa. With his resignation, 46 votes; 29 from Congress, 12 from CPN (Maoist Centre), 4 from CPN (Unified Socialist), and 1 from People's Socialist Party could obtain majority among 92 membered Province Assembly. The statement from the speaker Baburam Gautam revealed that he resigned to solve the complicated situation of the province. Gautam's resignation made it possible to from the coalition of parties, which also included the Congress and CPN (Maoist Centre), to secure the necessary number of votes to establish a government. For the second time in a span of 27 days, Uddhav Thapa has been selected to lead the Koshi Province on August 2^nd. With three Ministers sworn in, Baburam Gautam, Pradeep Kumar Sunuwar, and Kamal Prasad Jabegu respectively joined Minister for Economic Affairs, Minister for Energy, Water Resources and Irrigation, and Physical Infrastructure and Transport Minister. Although the Chief Minister and few Ministers has been appointed, there could still be complication in appointing remaining Ministers. Since the establishment of the NC and CPN (Maoist Centre) collation at federal level, they wanted to ensure the same coalition in Koshi province as well.

 

Instable Provincial Governments

Since the formation of provincial governments in 2017, there has been frequent changes in Chief Ministers; Uddhav Thapa being the fifth Chief Minister of Koshi Province in past seven years. Although, Nepal have been practising federalism for seven years, the provincial governments have been victim of the shifting coalition politics in federal level. The political instability in federal government has had affected the provincial governments. It’s not only in Koshi Province rather frequent changes in provincial governments are seen in all other provinces in Nepal. With exception of Lal Babu Raut and Trilochan Bhatta, who successfully served five-year chief minister in Madesh and Sudurpaschim Province respectively, all other provincial government have undergone turbulent political crisis.

Disputes among local level representatives delays Annual budget in Madesh Province

Out of 38 local level failing to present budget on time, more than half are from Madesh Province. They are expected to present the annual budget by June 25^th every year. But in Madesh Province the tussle among Mayor and Deputy Mayor has put down the fiscal governance and development activities in limbo. Mayors are Deputy Mayors are engaged in dispute over resource utilization, project selection and budget allocation among others. While some local levels budget declaration been stuck due to political rift between different parties failing to reach a consensus, in some local levels the tussle among the Mayors and Deputy Mayors has hindered timely budget formulation.
It is not for the first time, looking at the past six years record, local governments have failed to present budget in the desired timeframe. The past records also cite the similar reason as lack of consensus among parties. Lack of appropriate training in local level regarding budget management, the conflict of interest among representatives, and self-interest of the elected representatives in local units have also intensified such problem. Also, provinces have miserably failed in managing budget and implementation of development works. The provinces have unsatisfactory performance in terms of budget utilisation, and the situation is daunting in terms of capital expenditure. The bleaker picture of fiscal federalism is evident in World Bank report entitled Nepal Fiscal Federalism Update which recommends developing a fiscal federalism roadmap, improving budget credibility, enhancing the ability of staff in both the local and provincial government to perform tasks associated with PFM, among others.

Inter-state chief minister meeting and First National Coordination Council meeting held

Inter-state Council was established under a constitutional provision to settle disputes arising between federal and provincial governments. According to Article 234 of the Constitution, the Inter-provincial Council was formed under the chairmanship of the prime minister, with the members of the home minister, the finance minister and the chief minister of the seven provinces. The first three Inter-state Council meetings took place on Nov 2018, March 2019, and April, 2019, after then such meetings have not taken place. Amidst long silence of Inter-state Council, an informal Inter-state chief minister meeting was held in Pokhara on 30^th June. The meeting of Chief Ministers submitted a 17-point joint letter to the Prime Minister. The discussion focused on making necessary laws for effective federalism practice. The PM has also pledged that Federal Police Act will be tabled in Parliament soon. There were also concerns regarding the necessity of structures and institutions from federal level to be transferred to the provincial level. A similar meeting was held earlier in Pokhara on August 2018.

Also, on August 2^nd, first ever meeting of National Coordination Council was held in Pokhara. A National Coordination Council is supposed to coordinate and communicate between the Federal, State and local governments. As per Article 235 of the Constitution the Federal, Province and Local Level (Coordination and Inter-relation) Act-2077 was enacted. The Act provides for the formation of a 20-member National Coordination Council under the chairmanship of the Prime Minister. It discussed upon various issues as seen in implementation of federalism. The meeting concluded with six main agendas: the ambiguity in the implementation of federalism, legislative matter, manpower management and service delivery, integrated record system of National Statistic, acquisition of land and procedure for conducting Council meeting. There has still been monopoly of federal government and central mind-set in Nepal when conducting administrative activities. Although late, such events and meetings should be taken in positive note.