STATE RESTRUCTURING AND FEDERALISM. Trilochan Pokharel, NASC,

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1 STATE RESTRUCTURING AND FEDERALISM Trilochan Pokharel, NASC,

2 2 Declaring a federal republic in an interim constitution was easy: choosing which version to implement in Nepal is the hard part. Federations, January 2011

3 Outline of presentation 3 Grounds and basis for state restructuring Principles of federalism Progress in state restructuring and federalism in Nepal Contentious debate

4 Grounds for state restructuring 4 NASC, Trilochan With due Pokharel respect to Prof. Pitambar Sharma

5 Grounds 5 अग रग म ज तLय, भ षक र स क तक प हच न (र य म व म व) - ह कर न अवसर? - प हच नक व प? - अग र धक र? - अ पस ख यकक अ धक रक यब थ पन?

6 Grounds 6 समत म लक, सम व श वक श - द र त आlथर क वक श र व त र? - जन ज वक म (गर ब नव रण, र जग र, आय, शक ष, व य) य पक स ध र? - प र क तक र अ य त-स धनक उपल धत र प रच लन? - प रप रक अ तर प र द शक आ थर क ल न-द न? - वक शक अवसरह म सम न र सम-पह च?

7 Grounds 7 सब भ द त ल तह स म श क त वक द रकरण/ नक ष पण - व य त र आ म नणर यक अ धक र? - प रश स कय र व य वक द रकरण र नक ष पणक व प? - व म व, अ धक र र द य व?

8 Why federalism? 8 Bringing state closer to people Increasing people's participation Preventing tyranny by division of power at different level Managing unity in diversity Improving governance Promoting trade and commerce Managing conflict

9 Countries with federalism 9 25 countries 40 percent population

10 Countries ch]{lg6gf, c:6«]lnof, cl:6«of, a]lnhod, af]l:gof P08 xh{uf]legf, a flhn, Sofg8f, sf]df]/;, Olyof]lkof, hd{gl, ef/t, O/fs, dn]l;of, d]ls;sf], dfoqmf]g]l;of, gfoh]l/of, kfls:tfg,?;, ;]G6 ls6\; P08 g]le;, :k]g, blif0f clk msf, ;'8fg, :jl6\h/nof08, ;+o'qm c/j Old/]6\;, ;+o'qm /fho cd]l/sf, e]g]ho'nf, g]kfn -<_

11 Characteristics of federalism 11 More than two tiers of government Division of legislative, executive, judiciary and financial powers Inclusive and representative federal institutions (eg upper house) Written constitution with division of power (no unilateral amendment) Institutions for inter-governmental cooperation and coordination Inter-governmental dispute resolution mechanism

12 Differences in federal system 12 Social diversity Number of federal units and size Division of power Centralized and decentralized Foreign affairs and supremacy Governance system

13 Principles of federalism 13 Integrative federalism (Coming together ) - USA, Switzerland Devolutionary federalism (Holding together )- India, Belgium, Spain NEPAL

14 Coming together 14 Independent territorial entities come together for: building strong nation promoting strength economic prosperity protecting each other

15 Holding together 15 Address social diversity Take state closer to people Maintain regional balance of development

16 Attributes of federalism Self rule Shared rule

17 Progress in Nepal 17

18 Basis for federal structure 18 Identity ethnic, linguistic, cultural and historical continuity Feasibility economic interrelationship and sustainability, infrastructure, availability of resources and administrative convenience

19 Proposed structure 19 Centralized structure Symmetrical Three tiers of government Fiscal commission for redistribution and equalization

20 Division of powers 20 Exclusive power Concurrent power Residual power In Nepal: Federal list Province list Local list Special structure list Concurrent list

21 21 Revenue collection by and areas Central government Provincial government 1. income tax 1. Custom (Bhansar) 2. property tax 2. Antasulka 3. Professional tax 3. VAT 4. Malpot 4. Institutional tax 5. Fee tax 5. Fee of passport, visa, 6. Registration fee post, tourist, and other services 7. Vehicle tax 8. Entertainment tax 9. Advertisement tax 10. Tourist fee 11. Agriculture income tax 12. Other services tax

22 Which institution earns from what sources? 22 Provincial government Local govt./autonomous area 1. Income tax 1. Rent tax 2. Property tax 2. Property tax 3. Professional tax 3. Vehicle tax 4. Malpot 4. Malpot tiro 5. Fee tax 5. tourism 6. Registration fee (land and house) 6. Advertisement tax 7. Vehicle tax additional to autonomous area 8. Entertainment tax 7. Registration fee(land/home) 9. Advertisement tax 8. Fee tax 10 Tourist fee 11. Agriculture income tax 12. Other services tax

23 Contentious Issues 23 Name, number and boundaries of provincial units Governance structure Preferential right Election process Independence of judiciary Transitional planning

24 Contd 24 Special structure Structure of civil service (not planned yet) Strengthening local bodies (not discussed properly) Focused on ism than system Focused on structure, not in process Uniting nation Focus on self-rule ignoring shared rule

25 Public opinion

26 Federalism with mutliple identity states Federalism with single ethnic identity Unitary government 2 1 0

27 Why CA failed? 27 Power politics rather than politics on nationalism Blaming game, attempt to downsize opponents Ownership of agenda (whose brainchild)? Lack of internalization (education) of federalism among stakeholders Election result projection Weak institutional capacity of political parties Non-disintegration movement (initiated from far-west) Interference???

28 Finally 28 Thinking Federally!!!

29 29 Thank you for your attention

Solutions for Full Length Test - 1

Solutions for Full Length Test - 1 1 - B 2 - C 3 - D 4 - C 5 - A 6 - A 7 - A 8 - D 9 - D 10 - A 11 - A 12 - B 13 - B 14 - A 15 - A 16 - A 17 - D 18 - C 19 - C 20 - A 21 - A 22 - D 23 - C 24 - D 25 - D