Governance Roadmap Proposes Overhaul of Nepal's Provincial Administration

Biratnagar. Nearly a decade into the implementation of federalism in Nepal, provincial governments continue to struggle to establish their political identity, remaining 80 to 90 percent dependent on the federal government for financial support.

The Governance Roadmap Committee, formed by the then Prime Minister Sushila Koirala on Poush 14, has submitted a report proposing reforms ranging from reducing the number of ministries to creating a digital province framework to empower provincial governments.

The 13-member committee, led by Secretary at the Prime Minister's Office Govinda Bahadur Karki, submitted the report on Chaitra 3, 2082, following the Gen-Z protests on Bhadau 23 and 24, 2082. The report asserts that the federal government's centralized mindset is the primary reason for the ineffectiveness of provincial governments.

‘Past academic research and studies by external development partners have identified a centralized mindset and structural rigidity as the main obstacles to provincial governance in Nepal,’ the report states on page 34.

Page 33 of the report highlights a severe shortage of staff in the provinces. ‘In the absence of umbrella laws like the Federal Civil Service Act, provinces are facing administrative paralysis with approximately 40 percent of positions remaining vacant,’ the report notes, citing the High-Level Administrative Restructuring Committee. Consequently, provincial governments are unable to accelerate their performance.

The report clarifies the extent of the provinces' economic weakness on page 33. ‘Reports from the Natural Resources and Fiscal Commission (2081) reveal that provincial financial dependency (80–90 percent) is high, and internal revenue mobilization is extremely low,’ it states.

Similarly, page 37 explains that the heavy reliance of provincial governments on federal fiscal transfers and grants has weakened their financial autonomy.

To address criticisms regarding bloated administrative structures, the committee suggests reducing the number of ministries. Page 40 of the report, under the section on institutional restructuring and strengthening, states: ‘Based on an objective analysis of the constitutional spirit and workload, legal arrangements should be made to limit the number of provincial ministries to 7.’

Furthermore, it proposes abolishing unnecessary offices, boards, and committees, and replacing district-level thematic offices with an ‘integrated service delivery model.’

The report proposes special arrangements to eliminate frequent staff transfers and uncertainty in career development. ‘To bring uniformity to career development, ensure professionalism, and maintain institutional memory, ministry-wise groups of provincial staff should be formed,’ the report mentions. This is expected to increase expertise and resolve the issue of frequent transfers.

The report identifies digital transformation as a key tool for reducing corruption and facilitating service delivery. Page 42, under digital governance and technology-friendly services, states: ‘Develop an integrated provincial service portal to make services hassle-free for citizens. Expand digital services to lay the foundation for paperless and faceless governance.’

Additionally, the report includes a plan to introduce digital tokens and file tracking systems to reduce service delivery time.

To curb the trend of end-of-fiscal-year spending without tangible results, the report emphasizes the implementation of a ‘Project Bank.’ ‘Make the project bank system mandatory to end the practice of selecting projects arbitrarily,’ it notes. It also proposes selecting projects based on cost-benefit analysis and implementing a result-oriented budget system to measure effectiveness.

Regarding the lack of trust and coordination between the federal, provincial, and local levels, the report emphasizes the need to foster a spirit of co-existence. ‘There is a crisis of trust between the three tiers of government, which weakens the spirit of cooperation and co-existence as per the essence of federalism,’ the report says. ‘To improve this, constitutional mechanisms like the National and Provincial Coordination Councils must be operated regularly and result-orientedly.’

The report presents a clear timeline for implementation: reducing provincial ministries to 7 within three months, resolving staffing complexities by issuing the Federal Civil Service Act within six months, digitizing services like driving licenses via an integrated portal within one year, and significantly reducing the 80–90 percent dependency on federal grants within three years.

Defining the future destination of provincial governments, the report emphasizes ensuring a ‘citizen-responsive, financially self-reliant, and agile provincial government through a strong legal basis, digital governance, and inter-governmental coordination.’

This roadmap aims to free provincial governments from the accusation of being a ‘white elephant’ and move them forward in line with the true spirit of federalism. However, its implementation depends on a shift in the federal government's centralized mindset and the political will of the provincial governments.