Doing Business in Federated Nepal: Global Experience and Lessons

Nepal Economic Forum (NEF) along with Adam Smith International and Jindal School of Government and Public Policy held a neftalk about what federalism means from the economics perspective. NEF brought together experts in economics and public finance to discuss the models from the success and failed stories from countries in moving to a decentralised model. Key issues on budgeting, delivery of public services, taxation and what they mean for businesses and households across the country were discussed at the event. Doing Business in Federated Nepal: Global Experience and Lesson to Nepal was a moderated panel discussion bringing together a diverse group of speakers. Lejla Catic, Public Finance and Governance Expert who has also been advisor to Government of Bosnia noted that having a strong accountability framework in place ensures effective fiscal decentralisation and pointed out that the balance between expenditure and revenues will be a key challenge in the federated structure. Rajeev Malhotra, Professor, Jindal School of Government and Public Policy, India highlighted that there should be a clear division of roles and responsibilities between the three tiers of government in terms of functions, funding and functionaries for the federal set up to work effectively. Shankar P. Sharma, Former Vice Chairperson, National Planning Commission, Nepal stressed that Nepal is in its initial stage of unbundling of the federal structure. He emphasised that the Constitution of Nepal is consistent with international standards on fiscal decentralisation. While he noted that challenges on functionaries exist, he underscored that federal restructuring has a lot of opportunities for provincial and local governments. Sujeev Shakya, Chairperson, Nepal Economic Forum closed the discussions by marking that competition between the provinces and local governments will be the way forward to making the federated structure work for Nepal