Unit 3: Fiscal Federalism of Nepal
3.1 Structure of State and Distribution of State Power
The federal frame (the verified constitutional architecture): Art 56 (the three-tier structure: the federation-the provinces-the local); Art 57 + Schedules 5-9 (the power lists: the federal (Sch 5), the provincial (Sch 6), the concurrent fed-prov (Sch 7), the local (Sch 8), the all-three concurrent (Sch 9 — the revenue faces)); the fiscal dimension (Arts 59-60): the fiscal powers’ distribution + the revenue-source distribution + the NNRFC’s recommendation machinery + the equalization-grant architecture (the expenditure-need-and-revenue-capacity basis — the verified texts). The fiscal federalism’s logic: the functions’ assignment (who does what) → the finances’ assignment (who taxes what) → the transfers’ bridging (the gaps’ filling).
3.2 Intergovernmental Fiscal Arrangement
The arrangements’ machinery: the Intergovernmental Fiscal Arrangement Act 2074 (the framework statute: the revenue-sharing-and-grants’ rules; the borrowing’s coordination; the fiscal-discipline’s faces); the NNRFC (the transfers’ recommender — 3.8’s depth); the National Natural Resources and Fiscal Commission-Ministry-and-NRB’s coordination; the intergovernmental bodies (the IGCC-type forums: the centre-province-local coordination’s institutional faces); the vertical-and-horizontal imbalances’ management (the rich-poor provinces’ equalisation).
3.3 Revenue Sharing
The shared revenues’ design (the IGFA Act’s frame): the VAT-and-excise sharing (the divisible pool: the VAT-and-domestic-excise’s distribution among the three levels — the formula-based shares); the royalty sharing (the natural-resources’ royalties — 3.4’s detail); the local’s own-and-shared taxes (the local list’s taxes + the integrated-property-tax faces); the sharing’s principles (the derivation’s face (the origin’s share) vs the need’s face (the equalisation’s logic)); the NNRFC’s formula (the population-are-and-development indices’ weighting lore).
3.4 Distribution of Royalty obtained from Natural Resources
The royalties’ sharing (the verified constitutional frame + the IGFA’s rules): the natural-resources’ royalties (the mines-and-minerals; the forest; the water-and-electricity; the mountains (the mountaineering fees)) — the distribution’s design: the federal-provincial-local shares (the origin’s weight (the producing area’s share) + the national’s share); the constitutional principle (Art 60’s verified rule — the natural-resource investment-and-return shares; the NNRFC’s recommendation role (the 250-251’s verified function: the natural-resource investment/return shares + the dispute mitigation)); the Natural Resources Law course’s depth (LAW5708) and the Rivers-and-Sea companion (LAW5707).
This is a preview. The complete Fiscal Law notes — full unit, Exam Focus box and model questions — are in the PDF / full version. Get the complete notes →