Federalism in Nepal: How the Three-Tier Government Works Since 2015

Federalism in Nepal is the system of shared and self-rule established by the Constitution of Nepal 2015 (2072 BS), promulgated on 20 September 2015 (3 Ashwin 2072). It converted Nepal from a centralised unitary state into a Federal Democratic Republic in which sovereign authority is exercised at three levels rather than from Kathmandu alone. This was one of the defining achievements of the decade-long peace process that followed the end of the 1996-2006 civil conflict and the 2008 abolition of the monarchy.

Article 56 of the Constitution states that Nepal shall have three main levels of structure: federal, provincial and local. Crucially, these tiers are described as exercising powers in a relationship of 'coordination, co-operation and co-existence' rather than in a strict hierarchy, so a province or local unit is not simply a branch office of the centre. Each tier has its own directly elected legislature, its own executive, and its own defined areas of law-making power.

The old administrative geography of 14 zones and 75 districts (with more than 3,900 village development committees and municipalities) was dissolved and rebuilt. In its place came 7 provinces, 77 districts and 753 local units. The first elections under the new structure were held in 2017, giving the federal system its first set of elected representatives at all three levels.

The three tiers of government in Nepal are the federal (central) government, the provincial governments of the seven provinces, and the local governments of the 753 local units. Every tier has a directly elected assembly and an executive drawn from that assembly, and every tier can pass its own laws within the subjects assigned to it by the Constitution.

The federal tier consists of a bicameral Federal Parliament (the House of Representatives with 275 members and the National Assembly with 59 members), the President as head of state, and the Prime Minister as head of government. The provincial tier consists of seven provinces, each with a unicameral Provincial Assembly, a Chief Minister who leads the provincial cabinet, and a Governor (Pradesh Pramukh) appointed by the President to represent the federation. The local tier consists of the 753 local units, each with an assembly, a mayor or chairperson, and wards.

Districts still exist as a coordinating layer through District Coordination Committees, but they are not a separate law-making tier of government. Nepal's model is therefore best described as a three-tier federation, not a four-tier one, even though the 77 districts remain important for administration, courts and record-keeping.

Nepal has 753 local levels (local units), and this is one of the most commonly searched civics facts in the country. They break down into four types based mainly on population and infrastructure: 6 metropolitan cities (mahanagarpalika), 11 sub-metropolitan cities (upa-mahanagarpalika), 276 municipalities (nagarpalika) and 460 rural municipalities (gaunpalika). Together these replaced the more than 3,900 local bodies that existed before federalism.

Each local unit is further divided into wards, the smallest elected unit of government and the point where most citizens interact with the state for tasks such as birth, death and marriage registration, recommendations, and small local infrastructure. Nationwide there are 6,743 wards. Every ward elects a ward chairperson and four members (at least two of whom must be women, and at least one a woman from a Dalit or minority community), reflecting the Constitution's inclusion provisions.

The classification thresholds and the operating rules for local governments come from the Local Government Operation Act 2074 (Sthaniya Sarkar Sanchalan Ain), enacted in 2017. The six metropolitan cities are Kathmandu, Pokhara, Lalitpur, Bharatpur, Biratnagar and Birgunj. The number 753 has been stable since 2017, though some units have been reclassified (for example upgraded to a higher category) over time.

The division of power in Nepal's Constitution is set out in five lists, or Schedules, attached to the document. Schedule 5 lists the exclusive powers of the federation (about 35 subjects), Schedule 6 lists the exclusive powers of the provinces (21 subjects), and Schedule 8 lists the exclusive powers of the local level (22 subjects). Two further lists cover shared jurisdiction: Schedule 7 for concurrent powers of the federation and the provinces, and Schedule 9 for concurrent powers of all three tiers (15 subjects).

Federal subjects under Schedule 5 include national defence and the army, foreign affairs, currency and central banking, citizenship, customs, and central planning. Provincial subjects under Schedule 6 include the provincial police, provincial civil service, provincial highways, agriculture, and management of provincial universities and hospitals. Local subjects under Schedule 8 include local taxes and fees, basic and secondary education, basic health and sanitation, local roads, drinking water, and civil (vital) registration such as births, deaths and marriages.

The concurrent lists (Schedules 7 and 9) cover areas where more than one tier can legislate, such as education, health, electricity, and disaster management, with the expectation of coordination and cooperation. Where laws conflict, federal law generally prevails over provincial law, and provincial law over local law, on concurrent subjects. Any subject not mentioned in any list is a residual power that rests with the federation.

Provincial government in Nepal is the middle tier, and it broadly mirrors the federal model within each of the seven provinces. Each province has a single-chamber Provincial Assembly whose size depends on the province's population; members serve five-year terms and are elected through a mix of first-past-the-post and proportional representation, the same mixed system used for the federal House of Representatives.

The head of the provincial executive is the Chief Minister (Mukhya Mantri). Under Article 168, after a provincial election the Governor invites the leader who commands a majority in the Provincial Assembly to become Chief Minister and form a Council of Ministers. The Chief Minister and the provincial cabinet exercise the province's executive power and are collectively responsible to the Provincial Assembly, which can remove them through a vote of no confidence.

Each province also has a Governor (Pradesh Pramukh), who is appointed by the President of Nepal and serves as the federation's representative and the ceremonial head of the province. The Governor's role is largely formal, similar to the President at the federal level: appointing the Chief Minister, summoning and proroguing the assembly, and assenting to provincial bills. Provinces run their own provincial police, provincial civil service and provincial ministries within the subjects granted to them by Schedule 6.

Federalism was among the most contested issues in Nepal's constitution-making, and the debate over the number, borders and names of provinces continues today. Earlier proposals had suggested different models, including identity-based provinces and a larger number of units, but the final Constitution settled on seven provinces defined largely along existing district lines rather than along ethnic or linguistic identity.

This design triggered strong protests in 2015, especially in the Tarai/Madhesh region, where Madhesi and Tharu communities argued that the boundaries diluted their political voice and split communities across provinces. The unrest around the constitution's promulgation and the subsequent months led to dozens of deaths and a prolonged border blockade, and it shaped later demands for constitutional amendment on provincial boundaries, citizenship and inclusion.

Naming the provinces was also drawn out because Article 295 requires a two-thirds vote of a province's own assembly to fix its permanent name. The provinces were named one by one over several years, with Province No. 1 the last to be settled: it was named Koshi on 1 March 2023, a decision that itself drew protests from some Kirat and Limbuwan groups. The seven provinces today are Koshi, Madhesh, Bagmati, Gandaki, Lumbini, Karnali and Sudurpashchim.

All three tiers are filled through periodic direct elections held for five-year terms and run by the Election Commission of Nepal. Federal and provincial elections use a mixed member system combining first-past-the-post constituencies with proportional representation, while local elections are direct first-past-the-post contests for mayors/chairpersons, deputies and ward officials. The first federal and provincial elections were held in late 2017, and the first local elections in 2017, with the second cycle held in 2022.

In day-to-day practice, the federation sets national policy and standards, provinces coordinate development and run province-level services, and local governments deliver the services citizens use most directly. Fiscal transfers, revenue-sharing and grants from the federal government to provinces and local units are guided by the National Natural Resources and Fiscal Commission, since most sub-national units raise only part of their budgets locally.

Implementation has been uneven: institutions such as the provincial civil service and provincial police were slow to be fully staffed, and disputes over which tier controls which function remain common on concurrent subjects. Even so, federalism has brought decision-making and elected representatives much closer to Nepal's citizens than at any time in the country's history, which is the core promise the 2015 Constitution set out to deliver.