Challenges of local governance in Nepal

AbstractNo elections for local government consisting of 75 DDCs, 55 municipalities, 3915 VDCs of Nepal since 1997 although elections for constituent assembly and legislature Parliament did take place in 2008. This has resulted in lack of transparency and accountability and massive corruption even in home districts of President Ram Baran Yadav and Prime Minister Baburam Bhattarai according to Auditor General’s Report for the year 2068-69 (2011-12). Service delivery at the local level was affected and implementation of local level projects. Although insurgency did affect holding of local elections before 2005 when CPA (Comprehensive Peace Agreement) was signed, there is no convincing reason why it could not be done in six years after this period. Debate about kind of federalism suitable for Nepal and failure of constituent assembly to write a constitution and apathy of political parties are responsible for this state of affairs. It could be said that confusion about the number of states and autonomous areas to be formed and powers and responsibilities of the constituent units could also be another factor which led to non holding of local elections. On the other hand, lessons learnt in the past may have some relevance in present context. The success of community forests and user groups started in 1960’s has made Nepal a “global leader” in engaging local groups in forest management. The role played by “Mother Groups” in meeting United Nations MDG target about reducing maternal mortality and child survival rate should also be recognized.

The first ever elected constituent assembly (CA) of Nepal was dissolved in May 2012 without fulfilling its task which was to write a constitution. Its original mandate of two years was extended to four years. Nepal was declared a federal republic after elections to CA in 2008. The main issue which led to dissolution of CA was the kind of federalism Nepal should have and how many states should form it. There were proposals to make seven to fourteen federal states with or without right of self determination based on identity and capacity. Preparations for elections to second CA are being made expected to be held in November 2013. This is one of the few examples in the world where elections are being held for a second CA after failure of the first one to write a constitution. The only example in the world is in France where elections were made for more than one CA. On the other hand, France is a unitary and not a federal state. The challenge of local governance in Nepal at the level of village, district and municipal level has received less attention than it deserves primarily due to debates about the kind of federalism Nepal should have, insurgency, delay in writing the constitution by the CA and apathy on the part of political parties ruling the country in post- 2002 years.

Nepal was ruled by leaders of five Prime Ministers from Nepali Congress, CPN (Maoist), CPN(UML) after elections to CA in 2008. These included Girija Prasad Koirala, Pushpa Kamal Dahal, Madhav Kumar Nepal, Jhala Nath Khanal and Babu Ram Bhattarai. There is now an election government headed by Khil Raj Regmi, Chief Justice of the Supreme Court who has not resigned from his previous post and continues to head both executive and judicial branches of the government. There have been no elections to local government since 1997. It is ironic that no such elections have been held for thirteen years including the period when Nepal was declared a republic. When elections to CA were held in 2008 the local elections could also have been held at the same time. There was nothing to prevent local elections in the period 2008-13 when the country was being ruled by governments of political parties. There was a CA and legislature parliament in existence for four years in the period 2008-2012 when the political parties could have taken initiative in holding elections. Actually, initiative in holding elections should have been taken as far back as 2002 when the term of local government bodies had ended. The primary reason for this state of affairs in the period 2002-2005 was insurgency in the country, royal takeover of the government and lack of proper environment in holding elections before signing of Comprehensive Peace Agreement (CPA).

National Plans and Local Government

The Three year Approach paper for the period 2010/11-2012/13 prepared by National Planning Commission recognizes the need to outline clear base for the selection of development programs with the direct participation of local people. It is aware “benefits of limited economic growth have not reached to all areas and to all classes of people.” It also recognizes lack of quality in completed projects, ineffective project selection process, lack of institutional development of local bodies, lack of implementation of Local Self Governance Act, lack of financial discipline in local bodies and duplication of work done by both Governmental and non-Governmental bodies. Its strategy is to establish accountable local body by carrying out devolution of political and administrative rights to local bodies and in strentghening devolution of authority and increasing capability of local bodies. It also envisages to make local bodies accountable. It expects that the periodic plan, capacity development plan and transportation master plan of all DDCs and municipalities would be ready by the 2012/13. This could not be done as the local bodies were without elected officials by the end of plan period in 2013.

President of MIREST (Media Initiative for Right, Equity, and Social Transformation in Nepal) has written that a large proportion of total registered voters above the age of 18 had never participated in local elections (New Spotlight, 8/3/2013). People have thus een deprived of right to participate in local governance and decision making process. A survey done by MIREST in seven pilot district consisting of Sankhuwa Sabha, Sindhuli, Sunsari, Morang, Dang, Humla, Kanchapur, three municipalities (Khandbari, Itahari and Ghorahi) and three VDCs in each of seven pilot districts found that people wanted local interim elections. It was also found that that the influence of political parties was declining and that of User Committee was increasing. There was also lack of accountability. It found that service delivery in such local bodies as DDC, VDC defunct. The participation of citizens was also very low.

Situation of local government units in Nepal in 2013

There is rampant corruption in many of the local bodies. Documents relating to local projects in Dhanusha and Bara districts in the Terai in the year 2068/69 had disappeared. Auditors from Auditor General’s Office visiting these districts returned without performing their tasks (


, 25/3/13). No steps could be taken by the concerned ministries addressing irregularities as documents weren’t made available. Both MOLD and Chief Secretary were informed about non-availabilities. In Bara DDC Office documents showing irregularities amounting to Rs 120 million were not found according to Auditor General’s Office. Some of the documents were sent to CIAA(Commission for Investigation on Irregularities ). There were irregularities in the construction of road being constructed to the village of President Ram Baran Yadav. CIAA has filed irregularities amounting to Rs 11.3 million and had filed suit against 87 persons. Two district engineers and sixteen employees of DDC have been suspended. Field visits by CIAA staff found that progress reports were prepared on paper when no work had actually been done. A road where gravelling was supposed to be done according to progress report found no such work had actually been done. It was also found that different government departments had funded one project. In the construction of 825 meter Sapahi-Hardinath it was found that it was found that the length of road was only 800 meters. Contractors were paid in areas where no work was found to be done after field visit. (


, 20/4/13).

VDCs in Rautahat are reported to be without Secretaries who have been staying in district headquarter at Gaur. Service seekers have to visit district headquarters to avail themselves of village level services (


, 23/5/13). There have also been complaints about quality of works performed in projects being implemented by local governments. One such report writes about building of substandard roads by VDCs and DDCs in rural areas which were often environment unfriendly. It opined that roads in Grorkha and Tanahu have shown that ropeways in rural areas could transform rural life with relatively little investment. (


, 12/4/13). Malangawa municipality in Sarlahi is reported to be without an executive head who is officiating in the absence of elected mayor.The executive head appointed by the government asked for a transfer as there was lack of budget to pay salaries of staff from municipal resources and some projects were being implemented in previous years without funds on a credit basis whose payment was due. There was reluctance on the part of government officials to be transferred to this post. (


, 18/4/13)

Secretary of Banauli VDC in Mahottari district was found to have embezzled Rs 217,000 by preparing forged papers in distributing allowances for 124 elderly citizens and CIAA has filed a case in Special Court. (


, 20/4/13). The income of VDCs in Kathmandu district is more than most other districts due to land registration fees and other taxes which are source of revenue to the local government. Many government officials want to get transferred to local government offices in the district. There are irregularities amounting to more than Rs 100,000 in each of VDCs in the district. Examples of embezzlement include overspending DSA and spending without documentary proof. Auditors present their reports and no action is taken on these. (


, 20/4/13)

One of the major problems found in local government offices is the reluctance of those settling advances taken from the government in time. The municipal government of Pokhara sub-metropolitan city has decided to stop payment of salary to those staff who have taken advance from the municipal government and have not settled it even after six months in spite of repeated requests. The municipal government has recovered Rs 5.6 million out of a total arrear of Rs 10 million. The Ministry of Federal Affairs and Local Development had sent directives to recover the advance amounts by the end of fiscal year which ends in June. (


, 3/6/13).

Auditor General’s Report

The Fiftieth Auditor General’s Report of Nepal has shown that how extensive and widespread are in the Ministry of Federal Affairs and Local Development which amounted to Rs 3.54 billion. There was no improvement in the irregularities from the level of ministry to DDC and VDC. Twenty Four DDCs have transferred revenue from unspent funds from electricity royalty amounting to 106.4 million to their internal account instead of having it “frozen” as is required if it is not spent by the end of fiscal year. Two DDCs didn’t audit their expenditures. DDC of Siraha didn’t have its funds audited saying it had sent all its documents to CIAA. As it is required to limit expenditures to 10 percent of the total revenue in the last month of fiscal year, seven DDCs spent from 66 to 84 percent of the revenues in the last month of the fiscal year. Although tendering is required in the purchase of equipments and other items there were instances when several DDCs such as Jumla and Dhading purchased directly without tenders from traders. Gorkha DDC had given funds amounting to Rs 200,000 to a service center for purchase of furniture under Constituency Development Programme on the recommendation of a member of CA. When personnel from Auditor General’s office visited the Service Center two months later no furniture was found there. Another member of CA from Gorkha had recommended Rs 100,000 for constructing a museum in his constituency. However, a field visit team from Auditor General’s Office could not find any museum in the site. Gorkha DDC had sanctioned funds amounting to Rs 197,000 for constructing library in a school which was found to be non-existent. It may be remembered that Gorkha is the home district of Prime Minister Baburam Bhattarai at the time such recommendations for non-existing buildings were made. The Auditor General’s Report asks what kind of action will be taken by concerned ministry against technical and administrative staff of DDC.

Auditor General’s Report states that no monthly audit is done in most of VDCs and DDCs as required by law although there are internal auditors in many of these offices.26 DDCs in the year 2067/68 levied contract tax on sand, concrete and stone amounting to Rs 310 million but didn’t collect VAT which they were supposed to collect themselves which they were required to collect. The biggest source of irregularity in local governments is about social security allowance. Twenty out of 36 DDCs in Dhankuta district have distributed social security allowance amounting to Rs 60.1 million without verifying the number and identity of beneficiaries.

Due to lack of elections in the local bodies, they have been administered without representative government. They have been administered either by nominees of the government or political parties and bureaucrats. One article published in a local daily opined that local level projects have suffered due to lack of accountability and transparency in the absence of elected representatives of the people. Local government bodies during the Panchayat years were given constitutional status. Although 1990 constitution was supposed to be more democratic didn’t even define local bodies.

The most important reason why local elections couldn’t be held in the period 2008-12 when CA was attempting to write a constitution was the issue of federalism and the number of states that would form in Nepal. As the boundaries of the proposed states were not certain and how many districts they’d include and if some districts would be divided, elections to DDC might have been made uncertain. In addition, there were proposed “autonomous areas” for such minority ethnic groups as Dhimal, Meche, Sangthal, Yakkha, Chepang, Dura, Kumal, Danuwar, Pahari, Thami, Majhi, Baram, Thakali, Chhantyal, Surel, Sunuwar, Jirel, Yolmo and Byasi. Many of these ethnic groups didn’t form a majority of population in their respective “autonomous areas”. Similarly, the number of VDCs in each of the constituent units (provinces or autonomous areas) was not determined. These could have contributed to reluctance on the part of all concerned including the government, CA and Election Commission to hold local elections.

The issue of devolution of powers to federal, provincial and local governments could also be one of the factors that created uncertainity in holding local elections. Some people might argue that it was pointless to hold local elections when the powers and responsibility of units of local government were not yet determined or approved by CA.

However, elections for both CA local governments could have been held in 2008 and the same could be said for the second elections to CA supposed to be held in 2013. This issue has not yet been resolved and this should not be a factor in not holding local elections for more than eleven years.

There was a network of elected bodies at the local level as far back as 1960’s which has now been replaced by local bodies having no elected representatives which could be considered to be a “regressive” step in “New Nepal”. Decentralization Act enacted in 1982 included provision for User Groups . According to Bihari Krishna Shrestha, two kinds of Users Groups could be considered to be world class achievements. These include Forest User Groups in 1988 which now number 1800. This led to reversal of denudation of Nepal’s forest resources and Nepal was considered to be a textbook example of success of community forestry. The creation of a nationwide network of Mother’s Groups (Aamaa Samuha) which now number 52,000 including female community health volunteers responsible to them was one of the major factors in reducing maternal mortality and increasing child survival rate in meeting Millenium Development Goals of the United Nations. This has put Nepal in the top world ranking. (The People’s Review, 3/5/13)  

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