NATIONAL 6 -(Spotlight Weekly)]

Call For Financial Autonomy

Local level leaders demand more financial autonomy for the District Development Committees

BY AKSHAY SHARMA

Although the Local Governance Act was passed by the Parliament two years ago, District Development Committees (DDCs) have said they are yet to have financial autonomy to run their projects and programs.

As the efficiency of DDCs (and other local governments) remains weak, it is very difficult for them to become players in the establishment of a well functioning inter-governmental fiscal system.

Decentralization is not new to Nepal. Even during the Rana regime, the decentralization of authority was done by appointing Subbas, who were officials responsible for their departments. The rulers in Singha Durbar preach about decentralization but don't want to share their power, said critics. At a time when the communities in rural areas have to survive within themselves without any help from the outside world what will this new "decentralization " be like?

The seventh annual general meeting of District Development Committees in the capital last month provided a forum to discuss decentralization issues. Even leaders of the leading political parties agree that there have been wide gap in translating the concept of decentralization into reality in the country.

"Distribution of rights is democracy. Since time and tide wait for no man the decentralization of authority from Singaburbar must be carried to the grass roots. The current status of decentralization in Nepal is still in the "bullock-cart" stage. This 'tortoise pace' won't work in this century and our reaction time to anything has been too slow," said Madhav Kumar Nepal, general secretary of the main opposition CPN (UML). "We do not seem eager to decentralize authority. There are laws that need to be revised that stop us from accomplishing the task. Corruption in the country has never been punished The Prime Minister and the concerned officials should look upon these issues more stringently. And we should have a better monitoring system on the abuse of authority."

The Local Self-Governance Act (LSGA, 1998) set up the framework for an expanded set of service responsibilities for all the local government bodies in the country including Districts Development Committees (DDCs), Village Development Committees (VDCs) and municipalities. As the LSGA is quite broad, it leaves a great deal of leeway for defining the local role for the DDC, say experts. For some the role of DDCs is seen as that of advising central ministries on local priorities (also described as de-concentration).

Others envision something along the lines of devolution of service delivery and tax responsibilities (revenue sources identified for municipalities by the LSGA Act include taxes on houses and land, rent, business, activity, vehicles, property, entertainment, advertisement, parking and service charges for drinking water electricity, water taps, public telephones, solid waste management, sanitation, sewerage development and other facilities.)

The decentralization strategy, that was revised in 1992, is being implemented since June last year. "The overall objective is to support local self-government unit. It is important that the process of decentralization be transparent. We should strengthen the management, train people and there should be effective transparency," said Robin Griggs of DASU (Danish Advisory Support Unit, DANIDA) addressing the Nepal Workshop on Fiscal Decentralization held from 19 to 20 October , 2000.

A key topic of debate and discussion was focusing on the "assignment" issue and the closely related question of capacity for DDCs (and other local government) to become players in the establishment of a well functioning intergovernmental fiscal system.

Far from being unique to Nepal, this is the same "sorting out" process that many other countries are addressing. This is true regionally, worldwide and in developing and transition countries alike, said experts during the workshop.

Top officials also agree that there is a need to empower local level bodies to meet major development challenges such as poverty reduction. "Poverty is a major issue that needs to be targeted. If we are looking forward to decentralizing power to have stronger grass roots institution we must give them authority. DDCs (local institutions) are the backbone of the country," remarked Prime Minister Girija Prasad Koirala at the function. "Woman participation en mass is essential in today's world and steps need to be charted accordingly to reach the goal we have set."

How effective will this new theme, decentralization for productive employment and higher income for the poor, be remains to be seen. For Nepal, decentralization may emerge as one of the key areas for the achievement of the county's broader reform objectives of economic development and growth, and poverty alleviation. The workshop, organized by Federation of DDCs, Nepal in Cooperation with SDC (Swiss Development Committee) , DASU(DANIDA) and World Bank, was participated in by chairmen or representatives of all 75 districts in the country.