Interrelationship between Federation, Province & Local level

 

Constitution of Nepal, 2072 states that State powers of Nepal shall be used by the federal, province and local level in accordance with constitution.Article 232 of the constitution states that the federation, provinces and the local level shall enjoy relations based on the principles of cooperative, coexistence and coordination. The interrelationship between federation, province and local level is given below:

1.   Political and Executive interrelationship

·     Member of National assembly are elected by election committee consisting members of provincial parliament, chairman/mayor and vice chairman/deputy mayor through single transferable voting system.

·     Inter Provincial Council on the chairmanship of Prime minister to settle the political disputes arising between the federation & state and between the states.

·     Provincial coordination council on the chairmanship of chief minister to maintain the coordination among the province and local level on subjects pertaining to functional harmonization, strategic partnership in planning and management, definition and implementation of concurrent rights and utilization and allocation of natural resources.

·     Government of Nepal can issue necessary directives, pursuant to the constitution and prevailing laws, to the provinces & local government on matters of national importance and matters to be coordinated among the provinces and it shall be duty of them to abide by such directives.

·     President can reprimand provincial council of ministers and can suspend or dissolve provincial assembly. Suspension can be up to 6 months.

·     Matters related to altering the boundaries of a province and amendment of the rights & jurisdiction of provinces as mentioned in schedule 6, needs to be endorsed by majority in respective province assembly.

·     Do not interfere in one another jurisdiction & autonomy, but should assist in implementation of legal system, judicial & administrative decision and order & directives of federal units.

·     Cannot obstruct & levy of any tax and discriminate on mobility of people, export/import of goods, expansion of services and transportation of goods from one province or local level to another province or local level.

·     Provisions related to the local level executive other than those related in constitution shall be according to the law drafted by federal parliament.

 

2.   Legislative Interrelationship

·     Enactment of federal law on coordination between federation, province & local level by the federal parliament.

·     Federal law can be made to be applicable all over the Nepal or within any part of Country. Similarly, Provincial law shall be formulated to applicable within province or some parts.

·     If two or more provinces make a petition before the federal parliament to make laws on any subject in the schedule 6, federal parliament can formulate such laws which shall be enforced in respective provinces.

·     In the matter of exercise of concurrent rights, all federal units can formulate laws and policies without being inconsistent to the federal law & policy. Up to the extent, provincial law is inconsistent to the federal law, it shall be void. Similarly, law formulated by local level will be void, if it is inconsistent with the federal law & provincial law.

·     Federal parliament can make law for the province incase provincial assembly is dissolved, and federal rule shall be imposed.

·      For the operation and management of local level, provincial assembly can formulate law (renumeration, assembly operation and employees).

·     While formulating laws regarding revenue by the provinces, consistency and harmony should be maintained between the provinces.

·     Government of Nepal can provide model & draft of laws to assist province & local level for formulation of the laws.

 

3.   Judicial Interrelationship

·     Under the jurisdiction of local level, for the dispute resolution, there is a provision of one judicial committee headed by deputy mayor or Vice chairman.

·     The decisions made by judicial committee can be appealed against concerned district court.

·     If dispute arises between federation, provinces and local level on the matters of jurisdiction of power & authority, resolution of conflict is done by constitutional session of supreme court.

 

4.     Administrative Interrelationship

·     State policy to develop and expand harmonious & cooperative relations by sharing responsibility, resources & governance between the federal units.

·     As a matter of transition, GON will allow civil servants working in government service to adjust in accordance with the law at the federal, province and local level.

·     Intergovernmental transfer of civil servants.

·     Federal law to provide guidance and standard for recruitment by provincial public service commission. Provincial civil service act and local level civil service act should follow the guidance, principle and standard of federal civil service act.

·     The personnel & office management of local level will be according to the provincial law.

 

5.     Fiscal Relationship

·     With the consideration of criteria of capacity of revenue and necessity of expenditure, National Natural Resource and Fiscal Commission to recommend GON and province government to distribute fiscal equalization grant and conditional grant to respective province and local level.

·     Under intergovernmental fiscal transfer, there is a provision of complementary grants & special grants.

·     Federation will be able to formulate guidelines, standards, policy and laws on financial matters which shall be applicable to province and local level.

·     While formulation of economic & fiscal policy by province & local level, they should follow economic and fiscal policy of GON.

·     Revenue (VAT & excise tax) and royalty distribution between federal units will be as per federal law.

·     Provision of intergovernmental fiscal council for necessary consultation and coordination between federal units.

·     GON may, as pursuant to sub-article (2) of article 232 of the constitution, give necessary directives to state council of ministers on fiscal matters to be coordinated among the states an it shall be duty of concerned state council of ministers to abide by such directives.

·     Provision of single tax administration system. The tax revenue or non-tax revenue to be collected by more than one level of government shall be collected by one unit by taking maximum 2% fee as administrative cost.

·     Arrangement for equitable distribution of benefits from the use of development of natural resources.

·     Government of Nepal can provide loan to Province and local government.

 

6.     Relationship on service delivery and development

·     Criteria for program implementation and service delivery to be according to the standard and quality issued by federal & province government.

·     Federation can transfer technology in the field of innovation & research activities and can provide training on such matters.

·     Local levels can implement joint programs on mutual partnership with each other.

·     Program implementation and development activities from conditional grant, complementary grants and special grant.

·     Government of Nepal to assist province & local level on implementation of program by making agreement with development partners.

 

7.     Information sharing & reporting

·     Local level should submit the quarterly statement of income & expenditure to MOF and province within 15 days of expiry of such period.

·     On the basis of financial details of province & local level, GON to prepare integrated financial report and publish it by the end of Poush.

·     State and local level shall submit statistics of projection of income & expenditure of next fiscal year by the end of poush each year to ministry of finance.

·     GON and state government on consultation with NNRFC by the end of falgun of current fiscal year shall avail to state & local level, the particulars of estimated source of fiscal equalization grant & revenue to be provided in next fiscal year.

·     Exchange and reporting of various other information in accordance with law.