Decentralization/Federalism: Comprehensive Peace Agreement

3.5. In order to end discriminations based on class, ethnicity, language, gender, culture, religion and region and to address the problems of women, Dalit, indigenous people, ethnic minorities (Janajatis), Terai communities (Madheshis), oppressed, neglected and minority communities and the backward areas by deconstructing the current centralised and unitary structure, the state shall be restructured in an inclusive, democratic and forward looking manner.

Implementation History


Minimum Implementation

In the peace agreement, both sides agreed to restructure the state into federal units. With respect to federalism, the Maoists were clear; they formed 9 different autonomous republics.1

  • 1. "Nepal’s Maoist Federalism, Autonomy and Social Justice," Conflict Study Center (Situation Report 47), September 3, 2007.

Minimum Implementation

Some progress was made towards restructuring the state after this problem was recognized by the interim constitution. The interim constitution made the following provisions:


33. Responsibilities of the State: The State shall have the following responsibilities:

(d) To carry out an inclusive, democratic and progressive restructuring of the State by eliminating its existing form of centralized and unitary structure in order to address the problems related to women, Dalits, indigenous tribes, Madeshis, oppressed and minority community and other disadvantaged groups, by eliminating class, caste, language, sex, culture, religion and regional discriminations.


138. Progressive Restructuring of the State: (1) Inclusive, democratic and progressive restructuring of the state shall be made to bring about an end of the discrimination based on class, caste, language, sex, culture, religion and region by eliminating the centralized and unitary form of the state.

(2) A High Level Commission shall be constituted to recommend for the restructuring of the State in accordance with clause (1) above. The composition, function, duty, power and terms of service of such Commission shall be as determined by the Government of Nepal.

(3) Final decision of restructuring of the State shall be as determined by the Constituent Assembly.

These provisions to the interim constitution, however, needed to be enforced in order to create federal units. Since the CA elections did not take place in 2007, the restructuring of the state did not occur.

The state reconstruction, from unitary to a federal republic, remained a contentious issue along all party and ethnic lines. Madesh groups in the Terai, Limbu, and Rais regions in the east were involved in violent activities. These groups demanded an autonomous state.2 Along with the division caused by the outbreak of violence based on ethnic identity, the political parties remained divided over federalism. The Maoist party was the clearest in laying out a plan for the creation of federal units. The party formed 11 federal-state and 3 federal-sub-state committees.3

  • 2. "Nepal’s Madeshi Movement: Against Khas Chauvinism," Conflict Study Center (Situation Update 45), August 6, 2007.
  • 3. "Nepal’s Maoist Federalism, Autonomy and Social Justice," Conflict Study Center (Situation Report 47), September 3, 2007.

Minimum Implementation

The Constituent Assembly elections took place on 10 April 2008.4 The CA was supposed to establish a High-Level Commission for Restructuring the State. Political parties were trying to forge a consensus on this commission in June 2008.5 The commission, however, was not established in 2008. Nevertheless, the restructuring of the state issue was considered and handled by the Constitutional Committees.

  • 4. "Secretary General’s Report to the Security Council," United Nations (S/2008/670), October 24, 2008.
  • 5. "Secretary General’s Report to the Security Council," United Nations (S/2008/454), July 10, 2008.

Minimum Implementation

Though it was agreed upon in the peace agreement and provided for in the interim constitution, a High-Level Commission for Restructuring the State was not formed in 2009. The restructuring of the state was expected to end caste/ethnic-based discrimination and create federal units that would allow ethnic castes and minority groups greater representation and involvement in the decision-making processes. In the week between the 11th and 18th of December, 2009, the Maoist party unilaterally declared 13 autonomous states. This plan for the restructuring of the state was heavily criticized by the government and other political parties as it violated the spirit of the CPA.6 The main political parties remained divided over the issue of federalism. In a survey conducted in 2009 in Nepal, 26.7% opposed federalism, 48.1% supported federalism, and 19.5% wanted federalism to be based on ethnicity or language.7

  • 6. "Nepalis Want New Constitution to Promote Decentralization And Equality," Carter Center, 2010, accessed August 3, 2011,
  • 7. Sudhindra Sharma, "Public opinion of federalism,” The Kathmandu Post, December 8, 2009.

Minimum Implementation

Though it was agreed upon in the peace agreement and provided for in the interim constitution, a High-Level Commission for Restructuring the State was not formed in 2010. Nevertheless, the restructuring of the state was considered and handled by the Constitutional Committees. The CA failed to deliver the constitution by 28 May 2010. The restructuring of the state remains at a standstill mainly because the major political parties have failed to reach a consensus on how to draw the federal states boundaries, and the role ethnic groups will play within the federal state. In the State Restructuring Subcommittee, which is a subset of the Constitutional Committee of the CA, separate political parties presented 26 different modalities.8 The Nepali Congress Party proposed seven new provinces be created. Though there was much disagreement over how the state would be restructured, the committee was able to pass a 14-province federation by a majority of votes.9

  • 8. Center for Constitutional Dialugue, accessed August 3, 2011,
  • 9. "Parties agree to form state restructuring commission," Republic, March 4, 2010.

Minimum Implementation

The CA failed again to deliver the draft constitution by the 28 May 2011 deadline. The term of the CA was then extended by another three months. After the CA’s tenure was extended, the three major political parties agreed to establish a State Restructuring Commission. This commission was expected to recommend a viable model for the federal province system to the Constituent Assembly (CA). However, Madesh-based political parties opposed the formation of the commission.10 The Madeshi demanded that instead, a sub-committee headed by the CPNU-Maoist leader Puspa Kamal Dahal, be established to deal with the restructuring of the state. The reason they favored this specific leader was because the Maoists were responsive to their demands.11

At this point, the State Restructuring Commission has not been established. It is still too early to tell whether federalism will materialize in Nepal. Currently, the Maoists and the Madesh-based politics parties are beginning to recognize that federalism based on ethnicity and language is become a less viable option. The name, number, and boundaries of the future provinces still remain under contention.12

The Madeshi wanted to scrap the constitutional provision of establishing the State Restructuring Commission and the Maoist Party were not opposed to that. On 28 August, the Maoist party and the unified front of the Madeshi parties, United Democratic Madeshi Front (UDMF) made a four-point deal, which among other things included provisions to bypass the formation of the State Restructuring Commission, to form a coalition government. The government was formed on August 28.13 Nevertheless, this requires constitutional amendments.

On 1 November 2011, major political parties (Nepali Congress, Communist Party of Nepal-United Marxist and Leninists, Communist Party of Nepal- United Maoist and Samyukta Loktantrik Madhesi Morcha) reached a seven-point agreement on army integration, constitution drafting and power-sharing government. According to the accord, the parties agreed to form an expert panel from the CA instead of a constitutional commission on state restructuring.14 According to the accord, the government introduced an amendment bill in the legislative parliament to amend the interim constitution and allow the formation of an experts panel instead of a commission. The amendment bill never made to the discussion stage because of differences with the CPN-UM and CPN-UML.15 After failure to amend the constitution for the formation of an experts’ panel, the main political parties who were signatories of the seven-point accord forged a consensus on 22 November 2011 to form the State Restructuring Commission without a Chairman for a time being. On 22 November 2011, an eight-member SRC was formed (23 November 2011).

  • 10. "Big Three agree to form State Restructuring Commission," My Republica, May 30, 2011.
  • 11. "Madesh-based parties against formation of state restructuring commission," Republica, August 23, 2011.
  • 12. "Constitution In Progress: Constitution Building Updates," Center for Constutitional Dialogue, accessed August 4, 2011,
  • 13. Republica, August 29, 2011.
  • 14. "Parties join hands on peace process," Kathmandu Post, November 2, 2011.
  • 15. "State Restructuring: Dispute delays statute amendment," Kathmandu Post, November 17, 2011.

Minimum Implementation

On 31st January 2012, the State Restructuring Commission submitted two separate reports to the government because commissioners in the Commission could not agree on substantive issues related to the bases of federal provinces. In a report submitted by six members, commissioners proposed 11 states based on ethnic identity. It also gave the priority rights to dominant ethnic groups at the local level for one term. The three members prepared a separate report proposing six federal provinces: two from the plains region based on identity, history and culture, and 4four from hill and mountain regions based on economic viability. The report was submitted at the Constituent Assembly for deliberation on 25 March.16 After discussion at the CA meetings, the report was to be forwarded to the Constitution Committee, which never happened. Nevertheless, on 15 May the parties reached agreement to have 11 provinces but the agreement was not fulfilled by the Maoist because the 11 state model agreed earlier did not resolve the issue related to ethnic identity.17 The Constituent Assembly was dissolved without promulgating the constitution on 28 May. As such, the inter-state and ethnic relations provision of the accord was not implemented.

  • 16. "Constitutional Update, Support to Participatory Constitution Building Process in Nepal," accessed July 20, 2012,
  • 17. "Maoist party 'backtracks' from earlier agreement," Kathmandu Post, May 20, 2012.

Intermediate Implementation

 No progress was made this year.


Intermediate Implementation

Issues related to the number of federal states, demarcation of federal state boundary, and name of such states remained contentious among political parties. The former rebel party and other parties organized around ethnic identity continued to make their demands of federal states based on ethnic identity which was opposed by other mainstream political parties. As a result, the Committee for Constitutional, Political Dialogue and Consensus Building (CCPDC), which was established to sort out differences among political parties and submit reports to the Constituent Assembl,y submitted its report indicating failure to find consensus on many issues including federalism.18 The ruling coalition had proposed to create seven states whereas the rebel party, Maoist, had proposed for the creation of ten states based on ethnic identity.

  • 18. “CCPDC submits report to CA,” Kathmandu Post, September 13, 2014.

Intermediate Implementation

On 31 May 2015, parties had agreed to reach a consensus on disputed issues including federalism and issues of ethnicity and adopt a fast track approach to produce a draft constitution. On 9 June, 4 major political parties reached a 16-point agreement to deal with the contentious issues19  The CA engrossed the draft constitution and sent it to publish in the Nepal Gazette to collect people’s feedback for the next fifteen days on 7 July.20 According to the draft constitution, Nepal shall have eight provinces based on five criteria of identity (ethnicity/community, language, culture, geography/territorial continuity and historical continuity) and four criteria of capability (economic interdependence, and capability; status of infrastructure development, possibilities; availability of natural resources; administrative feasibility). The Nepal government will form a federal commission to recommend the demarcation of federal provinces. Two third majority of all members of the provincial assemblies will name the provinces. 

  • 19. “Way paved for constitution as four parties reach 16-pt deal,” Kathmandu Post, 9 June 2015.
  • 20. “CA concludes deliberation on draft constitution, sends for public feedback,” Himalayan Times, July 7, 2015.