Constitution and Governance Framework

Inter-governmental relations in Nepal's federal system

Nepal's Constitution (2015) creates three tiers (Federal, 7 Provincial, 753 Local) under Article 56, with powers listed in Schedules 5 to 9. The tiers are distinct, not hierarchical, but must work together on the principles of cooperation, coexistence and coordination (Art. 232).

A. Constitutional and legal arrangements

(a) Principle of relations (Art. 232): relations among the three tiers are based on cooperation, coexistence and coordination.

(b) Distribution of powers: Schedule 5 (federal), 6 (provincial), 7 (federal and provincial concurrent), 8 (local) and 9 (federal, provincial and local concurrent). Residual powers rest with the federation (Art. 58).

(c) Federal directions (Art. 232): the Government of Nepal may give directions to a province on matters of national importance, and the province must comply; federal law also regulates cooperation, legal assistance and dispute settlement between provinces (Arts. 233 to 235).

(d) Coordination bodies:

• Inter-Provincial Council: chaired by the Home Minister, with the Chief Ministers; settles political disputes between the federation and provinces and between provinces.
• Provincial Coordination Council: chaired by the Chief Minister, coordinating the province with the local levels.
• District Assembly and District Coordination Committee (Art. 220): coordinate the local levels within a district and link them to the province and federation.
• National Natural Resources and Fiscal Commission (Art. 250): recommends the sharing of revenue and natural resources and the grants.

(e) Fiscal arrangements (Arts. 59, 60, 250): the three levels have their own revenue powers; the federation shares revenue with provinces and municipalities. Federal fiscal equalisation grants, conditional grants, complementary grants and special grants are given under the Intergovernmental Fiscal Arrangement Act, 2074.

(f) Other statutes: Local Government Operation Act, 2074, which sets out local powers and their relation with the province; Intergovernmental Fiscal Arrangement Act, 2074.

B. Review of the current situation

Positive aspects

• Elected local governments (since 2017) have brought services closer to citizens: registration, social security allowances, basic health and education.
• Fiscal transfers are rule-based, using formulae from the Commission.
• Provincial governments have formed laws, ministries and planning commissions.
• Coordination councils (Inter-Provincial Council, Provincial Coordination Councils) have met on federal matters.

Weaknesses

• Overlapping concurrent powers and slow enabling laws (e.g. police, civil service, education acts) create confusion and conflict.
• Heavy fiscal dependence of provinces and local levels on federal grants; weak own-source revenue.
• Delayed or conditional transfers and project-wise federal programmes undermine local autonomy.
• Weak capacity, staff shortages and delayed staff adjustment.
• Coordination bodies meet irregularly and have little effect on implementation.
• Political interference and unclear roles among the three tiers.

C. Way forward

Complete the missing federal laws, clearly demarcate concurrent powers, regularise the councils, strengthen own-source revenue and capacity, and release transfers on time so that cooperative federalism works in practice.

Constitutional Development of Nepal

Nepal's constitutional history falls into three broad phases:

1. Pre-1951 (Rana period): Nepal was governed by royal decrees and the Muluki Ain (1854). No written constitution existed; power lay with the Rana Prime Minister.

2. 1951–1990 (Constitutional monarchy):

• Government of Nepal Act, 1948 – first written constitution, never fully implemented.
• Interim Constitution of Nepal, 1951 – introduced after the fall of the Rana regime; established a constitutional monarchy.
• Constitution of the Kingdom of Nepal, 1959 – first constitution enforced through a general election.
• Constitution of Nepal, 1962 – introduced the partyless Panchayat system; all powers vested in the King.
• Constitution of the Kingdom of Nepal, 1990 – restored multiparty democracy after the Jana Andolan I; sovereignty vested in the people, with a constitutional monarch as head of state.

3. 1990–present (Federal democratic republic):

• Interim Constitution of Nepal, 2007 – issued after Jana Andolan II; stripped the King of executive powers.
• Constitution of Nepal, 2015 (amended 2016 and 2020) – promulgated by the second Constituent Assembly on 20 Asoj 2072 BS (20 September 2015); declared Nepal a federal democratic republic.

Features of the Present Constitution of Nepal, 2015

1. Sovereignty vested in the people – Article 2; Nepal is an independent, indivisible, sovereign, secular, inclusive, democratic, socialism-oriented federal democratic republican state.
2. Federal structure – Three tiers of government: federal, 7 provinces and 753 local levels, with distribution of legislative, executive and judicial powers (Schedules 5–9).
3. Parliamentary system – Bicameral federal legislature (House of Representatives, 275 members; National Assembly, 59 members); executive power vested in the Council of Ministers headed by the Prime Minister.
4. Constitutional monarchy abolished – The King/Queen is no longer head of state; the President is the ceremonial head of state and the Prime Minister the head of government.
5. Secularism – Nepal is a secular state; the state protects religion and promotes religious tolerance (Article 26).
6. Fundamental rights – 31 fundamental rights guaranteed in Part 3, including equality, freedom, right to education, health, employment, social justice and the right to constitutional remedy.
7. Inclusive and proportional representation – Guaranteed representation of women, Dalits, indigenous nationalities, Madhesis, Tharus, Muslims and other minorities in state organs.
8. Independent judiciary – Supreme Court, High Courts and District Courts; judicial independence and the right to judicial review.
9. Rule of law and constitutional supremacy – The Constitution is the fundamental law; any law inconsistent with it is void.
10. Directive principles and fundamental duties – Part 4 (directive principles) and Part 5 (fundamental duties) guide state policy and citizens' obligations.
11. Provision for amendment – Article 274; the Constitution can be amended by a two-thirds majority of the federal legislature (with special procedures for certain provisions).
12. Single citizenship with federal identity – One federal citizenship, with provincial identity cards.

Conclusion: Nepal's constitution has evolved from absolute monarchy to constitutional monarchy and finally to a federal democratic republic. The present Constitution of 2015 institutionalises federalism, secularism, inclusiveness and fundamental rights, making it the most progressive constitution in Nepal's history.