AvailableNepali translation awaiting review

Federalism and local services

The Constitution lists basic and secondary education, basic health, local roads and water supply among the powers of Nepal's 753 local governments (several of them shared with the provinces and the federation), while the largest taxes are federal. How much money is passed down, and with how many conditions, is a central policy question.

Long-term goalMake three-tier government deliver everyday services people can rely on

The Constitution sets up three levels of government that must work on the basis of cooperation, co-existence and coordination, and the 16th Plan aims to clarify each level's responsibilities and to base spending on service standards. Clear roles, steady funding and local capacity are likely to take years to build.6910

Contested choiceHow much money to pass down, and with how many conditions

The National Natural Resources and Fiscal Commission has suggested in its annual reports that at least 30 per cent of the federal budget go to provinces and local levels as fiscal transfers; this is the Commission's suggestion, not adopted government policy, and by the Commission's figures the share in the 2083/84 budget was 19.97 per cent. The 16th Plan says conditional grants should gradually shrink and equalization grants grow, but conditional grants have become a larger part of the federal grants allocated to local levels. These are choices between central direction and local discretion.161110

Urgent problemPromised transfers arriving short, and weak local financial controls

In 2082/83 the federal government transferred only about 91.5 per cent of the equalization grants it had budgeted for provinces and local levels, which the Commission says hurt their budget implementation. The Auditor General's latest report finds 268 local levels did not carry out the internal audit the law requires. Both are current problems recorded in the latest official reports, not only long-term goals.135

Updated 2026-10-10 · Version 2 · Sources · Corrections & right of reply

Question 1

What is the issue, and why does it matter?

Under the Constitution, basic and secondary education, basic health and sanitation, local and rural roads, and water supply are on the list of local level powers (Schedule 8). Education, health and water supply also appear on the concurrent list shared by all three levels (Schedule 9), so the rural municipality or municipality works on these services alongside the province and the federation.12

There are 753 local levels and 7 provinces. In FY 2079/80 the three levels together spent Rs 2,084.92 billion: 68.2 per cent by the federal government, 10.1 per cent by provinces and 21.8 per cent by local levels.34

Local levels raise little of their own money. For the 721 local levels audited for FY 2081/82, total income was Rs 633.40 billion, while their own internal revenue was Rs 34.30 billion; revenue shared from the federal and provincial governments brought in Rs 85.56 billion.5

Places start from very different positions. In FY 2079/80 Bagmati Province produced 36.9 per cent of national GDP and Karnali 4.1 per cent; and, according to the 16th Plan, multidimensional poverty was 39.5 per cent in Karnali and 7.0 per cent in Bagmati. The Constitution provides for equalization grants based on expenditure need and revenue capacity (Article 60(4)) and says revenue-distribution law must have regard to reducing regional imbalances (Article 60(8)).46

When the same service appears on more than one list, for example health or water supply, people can find it hard to know which government to ask or to hold responsible, and each level can point to another when something goes wrong.

Question 2

What do current law and policy say?

Article 56 sets up three levels of government (federation, province and local level). Article 57 vests their powers in Schedules 5 to 9: federal (5), provincial (6), federal-provincial concurrent (7), local (8) and concurrent for all three (9). Local or provincial laws on concurrent matters are invalid to the extent they conflict with federal law, and local laws on Schedule 9 matters must not conflict with provincial law.61

Articles 59 and 60 let each level make its own budget and levy taxes within its powers. The federal government must share revenue fairly, give equalization grants based on expenditure need and revenue capacity, and the amount of fiscal transfer to provinces and local levels 'shall be as recommended' by the National Natural Resources and Fiscal Commission. Provinces must also give equalization grants to their local levels.6

The Intergovernmental Fiscal Arrangement Act, 2074 puts VAT and domestic excise into a divisible fund shared 70 per cent federal, 15 per cent provinces and 15 per cent local levels (section 6); splits vehicle tax 60:40 between a province and its local levels (section 6A); shares natural resource royalties under Schedule 4 (section 7); and requires equalization and conditional grants on the Commission's recommendation or basis (sections 8–9).7

The Local Government Operation Act, 2074 (section 11) spells out local duties in detail: for example, permitting and running community schools, adjusting teacher posts and running basic-level exams; establishing and running hospitals and other health institutions; planning local, rural and agricultural roads; and setting drinking water tariffs and making local policy, plans and regulation for hydropower projects up to one megawatt. Section 11(3)–(4) adds that local levels exercise the concurrent powers in Schedule 9 in collaboration with the federation and provinces, subject to federal and provincial law. The Act has been amended several times, including by the Federation, Province and Local Level (Coordination and Inter-relation) Act, 2077.2

Articles 250–251 create the National Natural Resources and Fiscal Commission to set the basis for revenue sharing, recommend equalization grants, set parameters for conditional grants, recommend borrowing ceilings and study possible disputes between levels. Article 232 says relations rest on cooperation, co-existence and coordination, and lets the federal government give directions to local executives; Article 234 sets up an Inter-Province Council for political disputes between the federation and provinces and between provinces; Article 235 asks Parliament to make coordination laws.89

The 16th Plan (FY 2081/82–2085/86) commits to reviewing and implementing the functional assignment report, setting expenditure needs on the basis of development and service standards, making transfers formula-based, gradually reducing conditional grants while increasing equalization grants, developing a need- and performance-based system for intergovernmental transfers, and linking conditional grants to sector-level conditions and expected results rather than individual activities.10

Question 3

What is known, uncertain or disputed?

Known

Conditional grants now make up most of the federal fiscal transfers (grants, not counting revenue sharing) allocated to local levels. Their share rose from 56.03 per cent in FY 2075/76 to 65.50 per cent in FY 2083/84, while the share of equalization grants (which local governments can spend on their own priorities) fell from 43.46 per cent to 28.67 per cent. The Auditor General also reports that the share of conditional grants received by local levels has been growing compared with equalization grants.115

According to the Commission's figures, intergovernmental fiscal transfers were 23.61 per cent of the federal budget in FY 2075/76, peaked at 24.59 per cent in FY 2077/78 and fell to 19.97 per cent in FY 2083/84. In the FY 2083/84 budget, fiscal transfers are Rs 424.28 billion and revenue sharing Rs 175.00 billion.1112

Equalization grants are budgeted as the Commission recommends but not fully paid. In FY 2082/83 provinces received 91.44 per cent and local levels 91.49 per cent of the amounts allocated (Rs 60.66 billion and Rs 88.97 billion); in FY 2081/82 the figures were 91.76 and 91.74 per cent. The Commission says this affected their budget implementation.1314

The Auditor General found that 268 local levels did not carry out the internal audit required by section 77 of the Local Government Operation Act, and 219 local levels approved budgets that kept Rs 7.57 billion unallocated, contrary to that Act. The number of local levels without internal audit was 327 the year before. Irregularities (beruju) flagged at local levels in this year's report (audits of FY 2081/82) totalled Rs 19.05 billion.515

The Commission reports that the federal government has still not set minimum service standards and per-unit costs that would allow the expenditure needs of each level to be measured, despite repeated suggestions; and that the five-yearly review of royalty-sharing ratios it recommended has not been published in the Nepal Gazette.1613

Uncertain

Whether conditional grants are being given on the basis the Commission sets is not known: the Commission says it could not analyse this because the data were not available.13

The latest audit picture is incomplete. Because of the protests and incidents of 23–24 Bhadra 2082, 179 offices and bodies did not submit accounts and records, and Rs 147.90 billion could not be audited; the summary does not say here how many of these offices are local levels. The report covers 721 local levels.155

How serious staff shortages are at local levels is not established in the official sources we reviewed. One academic study (a review of secondary sources) states in its abstract that nearly one third of local units lack a chief administrative officer; this is one study's finding, and we have not verified it against official personnel data.17

Disputed

How big transfers should be is contested. The Commission has suggested in its 7th and 8th annual reports that at least 30 per cent of the federal budget go to provinces and local levels as fiscal transfers, and says the share keeps falling. This is the Commission's suggestion, not a target adopted by the government; by the Commission's figures, the FY 2083/84 federal budget allocated 19.97 per cent, which the Commission records as its suggestion not being implemented.161311

Whether the federal government may transfer less equalization grant than it budgeted is contested. The Commission reports that the government reduced the grants through an Appropriation Act provision that re-determines transfers in proportion to revenue collected against target, says transfers should follow its recommendation, and has suggested amending the Commission Act and the Intergovernmental Fiscal Arrangement Act so that Article 60(3) is implemented. The government's own reasoning is not set out in the sources reviewed here.166

How well federalism is working is debated. One academic study (a review of secondary sources) argues in its abstract that Nepal has done better on political federalism than on administrative and fiscal federalism, and points to political interference, the central government's unwillingness to devolve power and delayed implementation of key federal laws; this is one study's finding, not an official one.17

Questions 4–5

What are the options, and what do they cost and achieve?

Options are listed in no particular order. Policy Nepal does not recommend one; real policies often combine them.

Shift from earmarked to flexible money1610115

Raise the share of equalization grants and turn many small, activity-by-activity conditional grants into larger sector-level ('block') grants with outcome targets. The 16th Plan states both aims; the Commission has also recommended the block-grant change in its annual report (a Commission recommendation, not adopted policy).

Benefits
  • Local governments can match spending more closely to local needs.
  • Fewer small earmarked projects to track, plan and report on.
Costs
  • Federal ministries lose a direct lever for national priorities such as teacher salaries or immunisation.
  • Where local financial controls are weak, more discretion can mean more misuse.
Trade-offs
  • Local choice versus nationally uniform minimum services.
What implementation needs
  • Agree sector outcome targets and reporting before converting grants; strengthen internal audit at local levels.
  • Change the budget formulation practice in federal and provincial ministries rather than the law alone.

Make transfers predictable and protected16613

Amend the fiscal laws so that transfer amounts follow the Commission's recommendations and cannot be reduced below the budgeted amount except under clear rules, and consider a minimum share of the federal budget for transfers, such as the at least 30 per cent the Commission has suggested (a Commission suggestion, not a government target). These are changes the Commission has proposed.

Benefits
  • Provinces and local levels can plan multi-year services knowing what money will arrive.
  • The Commission argues this would give practical effect to Article 60(3) of the Constitution.
Costs
  • Less room for the federal government to adjust when revenue falls short; other federal spending may have to give way.
Trade-offs
  • Subnational certainty versus federal fiscal flexibility and macro-economic stability.
What implementation needs
  • Amend the National Natural Resources and Fiscal Commission Act and the Intergovernmental Fiscal Arrangement Act, and stop using Appropriation Act clauses to re-determine transfers.
  • Publish monthly transfer releases against allocations.

Clarify who does what, and cost it10161

Review the functional assignment report, settle overlaps in the concurrent lists service by service (schools, health, roads, water), and set minimum service standards and per-unit costs so that each level's funding matches its duties.

Benefits
  • Citizens and auditors can see which government is responsible for each service.
  • Equalization grants can be based on measured need rather than past allocations.
Costs
  • Slow and technical; sector ministries may resist handing over functions and staff.
  • Costing may show that some duties are underfunded, creating pressure for more money.
Trade-offs
  • Precision and accountability versus speed and flexibility to adapt.
What implementation needs
  • A joint federal–provincial–local process, with the Commission's support on expenditure-need methods, since several of these services are concurrent powers of all three levels.

Tie part of the money to performance and build capacity10518

Link a portion of transfers to measurable results and good financial management (budgets on time, internal audit done, records reconciled), combined with support for local staff, systems and self-assessment.

Benefits
  • Rewards local levels that follow the law on audit and budgeting, which many currently do not.
Costs
  • Can penalise the poorest or least-staffed local levels, which need help most.
  • Needs reliable data; weak indicators invite box-ticking.
Trade-offs
  • Incentives for good management versus equalization for those furthest behind.
What implementation needs
  • Keep performance money a small top-up on top of need-based equalization; publish indicators and scores.

Grow local and provincial own revenue17516

Help local levels and provinces collect more of the taxes the Constitution already gives them (property tax, house rent tax, land revenue, business tax, vehicle tax and others), through better property records, digital collection and shared tax administration.

Benefits
  • Less dependence on transfers, and a closer link between what residents pay and the services they get.
Costs
  • Higher local taxes are unpopular, and some local governments may avoid collecting them.
  • Places with a small tax base gain little, so gaps between rich and poor areas can widen.
Trade-offs
  • Local autonomy versus equality between places; needs to be paired with equalization.
What implementation needs
  • A single tax administration already exists for some taxes on both the provincial and local lists under the fiscal arrangement law (section 5); extend support for valuation and collection systems.

Combining options

These options are not exclusive. Clarifying and costing functions (option 3) gives the basis for deciding how large and how predictable transfers should be (option 2) and how much can safely be made flexible (option 1). Performance top-ups (option 4) and own-revenue efforts (option 5) can sit on top of need-based equalization so that poorer places are not left behind. The main tension is between giving local governments more freedom quickly and first strengthening the controls that make that freedom accountable.

Question 6

Who is responsible?

Local
Rural municipalities and municipalities (753 local levels)

The local list (Schedule 8, which the Local Government Operation Act calls the local levels' exclusive powers) includes basic and secondary education, basic health and sanitation, local, rural and agricultural roads and irrigation, and water supply, small hydropower and alternative energy. Under section 11 of that Act they permit and run community schools, adjust teacher posts and run basic-level exams; establish and run hospitals and health institutions; plan and regulate local roads; and set drinking water tariffs. They also levy local taxes such as property and house rent tax. Education, health, water supply and irrigation are also concurrent powers shared with the province and federation (see the shared row below).12

Provincial
Provincial governments (7 provinces)

Schedule 6 gives provinces health services, provincial highways, province-level electricity, irrigation and water supply services, and provincial universities and higher education. Health and water supply are also concurrent powers (Schedules 7 and 9). Provinces must pass equalization grants to their local levels (Article 60(5)) and share vehicle tax with them (40 per cent to local levels); the Provincial Assembly may maintain coordination with local levels and settle political disputes involving them (Article 235(2)).1697

Federal
Federal Government of Nepal

Schedule 5 gives the federation health policy, standards and national or specialised hospitals; central universities and university standards; national highways and transport policy; and 'local level related affairs'. It collects most major taxes, distributes revenue, pays equalization, conditional, complementary and special grants (Article 60), and may give directions to local executives (Article 232(8)).169

Shared
All three levels together (concurrent lists)

Education, health, and services such as electricity, water supply and irrigation are also on the concurrent list for all three levels (Schedule 9), and water supply and sanitation is concurrent between the federation and provinces (Schedule 7). On these matters federal law prevails over provincial and local law, and provincial law over local law, where they conflict (Article 57(6)–(7)). The Local Government Operation Act says local levels exercise these concurrent powers in collaboration with the federation and provinces, subject to federal and provincial law (section 11(3)–(4)).162

Independent body
National Natural Resources and Fiscal Commission

Constitutional commission that sets the basis for sharing revenue, recommends equalization grants and the parameters for conditional grants, recommends borrowing ceilings and royalty shares, and studies possible disputes between levels. It publishes an annual report on whether its recommendations were implemented.8713

Independent body
Office of the Auditor General

Audits the federal, provincial and local governments under Article 241 and the Audit Act, 2075, and reports irregularities and compliance problems, including at local levels, in its annual report.15

Shared
Inter-Province Council

Chaired by the Prime Minister with the federal home and finance ministers and the chief ministers of the provinces concerned, it is meant to settle political disputes between the federation and provinces and between provinces.9

Question 7

What have parties and leaders said and done?

What was said or promised is shown apart from what was recorded as done. Every entry needs a dated source. A missing entry means the position is not established, not that someone opposes or is neutral.

Party positions on federalism and local services are still being researched. To keep coverage fair, they will be added for every party with seats in the House of Representatives at the same time, each from that party's own documents and on the same question. The records above are government actions and statements (plan, budget and transfers) and do not represent any party.

Said or promised

Stated position · 2081 BS (Plan period FY 2081/82–2085/86)

Government of Nepal (National Planning Commission)

The 16th Plan states the aim of gradually reducing conditional grants and increasing equalization grants, making transfers formula-based and performance-linked, and reviewing the functional assignment report.10

Recorded actions and outcomes

Funding decision · FY 2083/84 budget statement, 2083 Jestha 15

Government of Nepal (Ministry of Finance)

The FY 2083/84 budget allocates Rs 424.28 billion for fiscal transfers and Rs 175.00 billion for revenue sharing, in a total budget of Rs 2,124.34 billion. Equalization grants were budgeted at the Commission's recommended amounts: Rs 61.50 billion for provinces and Rs 90.20 billion for local levels.1213

Outcome · FY 2082/83

Government of Nepal (Ministry of Finance)

In FY 2082/83 the federal government transferred 91.44 per cent of the equalization grants allocated to provinces and 91.49 per cent of those allocated to local levels, according to the Commission's annual report.13

Question 8

What would progress look like, and when do we check again?

IndicatorLatest official figureOfficial targetRevisit
Intergovernmental fiscal transfers as a share of the federal budget, by the Commission's calculation (no official target; the Commission has suggested at least 30 per cent, which is its suggestion, not a government-adopted target)111613 19.97 per cent (FY 2083/84 (budget))11 No official target found 2027-06 (FY 2084/85 budget)
Equalization grants as a share of federal transfers to local levels (16th Plan: increase gradually, no number given)1110 28.67 per cent (FY 2083/84 (budget))11 No official target found 2027-06 (FY 2084/85 budget)
Share of budgeted equalization grants actually transferred to local levels13 91.49 per cent (FY 2082/83)13 No official target found 2027-09 (Commission's next annual report)
Rural municipality and municipality centres reached by a blacktopped road19 532 (FY 2079/80)19 753 (all) (FY 2085/86)19 2027-08
Local levels carrying out a self-assessment of their governance capacity18 739 (FY 2079/80)18 753 (all) (FY 2085/86)18 2027-08

Sources

Grouped by type of evidence. Government plans show what government intends; they are not proof of results. Party material shows what a party says.

Constitution & law

  1. The Constitution of Nepal (English translation, as amended by the Second Amendment, 2020), Schedules 5–9 — Nepal Law Commission, Government of Nepal, Promulgated 20 September 2015; amended 2016 and 2020. Schedule 5 (items 9, 15, 16, 17, 20), pp. 193–195; Schedule 6 (items 7, 8, 9, 12), pp. 196–197; Schedule 7 (item 18), pp. 198–199; Schedule 8 (items 4, 8, 9, 11, 19), pp. 200–201; Schedule 9 (items 2, 3, 5), p. 202. Checked 2026-10-10
  2. स्थानीय सरकार सञ्चालन ऐन, २०७४ (Local Government Operation Act, 2074), consolidated Nepali text — Nepal Law Commission, Government of Nepal, Authenticated 2074/06/29; amended up to 2081/12/18 (as listed on p. 1 of the document). p. 1 (list of amending Acts, incl. Federation, Province and Local Level (Coordination and Inter-relation) Act, 2077); Section 11(1) (Schedule 8 as exclusive powers), p. 11; Section 11(2), clauses (ज) basic and secondary education, pp. 15–16; (झ) basic health and sanitation, p. 17; (ट) local roads, p. 18; (ध) water supply and small hydropower, p. 23; Section 11(3)–(4) (Schedule 9 concurrent powers, exercised in collaboration and subject to federal and provincial law), p. 25; Section 77(2) (internal audit), p. 69. Checked 2026-10-10
  3. The Constitution of Nepal (English translation, as amended by the Second Amendment, 2020), Part 5: Structure of State and Distribution of State Power — Nepal Law Commission, Government of Nepal, Promulgated 20 September 2015; amended 28 February 2016 and 18 June 2020 (as stated in the document). Part 5, Articles 56–60 (incl. Art. 57(1)–(7), Art. 59, Art. 60(1)–(8)), pp. 34–37 of the PDF. Checked 2026-10-10
  4. अन्तर-सरकारी वित्त व्यवस्थापन ऐन, २०७४ (Intergovernmental Fiscal Arrangement Act, 2074), consolidated Nepali text — Nepal Law Commission, Government of Nepal, Authenticated 2074/06/27; amended 2075 (as stated in the document). Sections 5 (single tax administration), 6(1)–(2) (VAT and domestic excise: 70/15/15), 6A (vehicle tax 60/40), 7 (royalty, Schedule 4), 8 (equalization grants), 9 (conditional grants); PDF pp. 3–5. Checked 2026-10-10
  5. The Constitution of Nepal (English translation), Part 26: National Natural Resources and Fiscal Commission — Nepal Law Commission, Government of Nepal, Promulgated 20 September 2015; amended 2016 and 2020. Articles 250–251 (esp. Art. 251(1)(a)–(i)), pp. 141–143. Checked 2026-10-10
  6. The Constitution of Nepal (English translation), Part 20: Interrelations between Federation, Province and Local Level — Nepal Law Commission, Government of Nepal, Promulgated 20 September 2015; amended 2016 and 2020. Articles 232 (incl. 232(1), 232(8)), 234 and 235, pp. 119–121. Checked 2026-10-10

Government plans & policy

  1. सोह्रौं योजना (The Sixteenth Plan), Chapter 9: challenges, strategies and programmes — National Planning Commission, Government of Nepal, 2081 BS. Section 9.1, printed p. 180; 9.3 challenge (1), printed p. 182; 9.4 transformative strategies (1)–(2), printed pp. 184–185; programme (7) fiscal federalism, printed p. 191. Checked 2026-10-10
  2. Budget statement for FY 2083/84 (बजेट वक्तव्य), Annex 1: आय व्ययको विवरण (statement of income and expenditure) — Ministry of Finance, Government of Nepal, 2083 Jestha 15 (as stated on the cover). Cover, PDF p. 2 (date); para 66(क) (equalization grants per Commission recommendation); Annex 1 (अनुसूची-१), PDF p. 52: row 5 (revenue sharing), row 12 (fiscal transfers), row 28 (total expenditure including financing); FY 2083/84 target column; figures in Rs lakh. Checked 2026-10-10
  3. सोह्रौं योजना (The Sixteenth Plan): governance targets table — National Planning Commission, Government of Nepal, 2081 BS. Targets table, row 17 (local levels doing self-assessment of governance capacity), printed p. 232. Checked 2026-10-10
  4. सोह्रौं योजना (The Sixteenth Plan): urbanisation and settlements targets table — National Planning Commission, Government of Nepal, 2081 BS. Targets table, rows 14–15 (municipality centres reached by road / by blacktopped road), FY 2079/80 status and FY 2085/86 target, printed p. 159. Checked 2026-10-10

Official data

  1. सोह्रौं योजना (The Sixteenth Plan): reference to all 7 provinces and 753 local levels — National Planning Commission, Government of Nepal, 2081 BS. Printed p. 164 (gender-based violence prevention fund established in all 7 provinces and 753 local levels). Checked 2026-10-10
  2. सोह्रौं योजना (आ.व. २०८१/८२–२०८५/८६) (The Sixteenth Plan), Chapter 9: Strengthening provincial and local economies and balanced development, current situation — National Planning Commission, Government of Nepal, 2081 BS. Section 9.2, items (1), (4), (5), printed pp. 180–182. Checked 2026-10-10
  3. The Auditor General's Sixty-Third Annual Report Summary, 2026: local levels section — Office of the Auditor General, Nepal, 15 May 2026. Chapter 3, 'स्थानीय तह', paragraphs 87, 89, 93, 94, printed pp. 43–44 (PDF pp. 53–54). Checked 2026-10-10
  4. Eighth Annual Report, 2083: infographics on composition and share of intergovernmental fiscal transfers — National Natural Resources and Fiscal Commission, Government of Nepal, 2083 BS. Infographics, PDF p. 19 (composition of transfers to local levels, FY 2075/76–2083/84) and PDF p. 20 (intergovernmental transfers as % of federal budget, FY 2075/76–2083/84). Checked 2026-10-10
  5. राष्ट्रिय प्राकृतिक स्रोत तथा वित्त आयोग आठौं वार्षिक प्रतिवेदन, २०८३ (Eighth Annual Report, 2083) — National Natural Resources and Fiscal Commission, Government of Nepal, 2083 BS (file dated 2083/6/06). Executive summary (कार्यकारी साराङ्श), PDF pp. 14–17: section 1 (revenue sharing), 3.1 (equalization grants FY 2082/83 and 2083/84), 3.2 (conditional grants: data not available), 4 (royalty review not gazetted); implementation-status table for the 7th report's suggestion 5 (FY 2083/84 allocation 19.97%, suggestion not implemented), PDF p. 157; suggestions table, item 7 (at least 30% suggestion repeated), PDF p. 159. Checked 2026-10-10
  6. राष्ट्रिय प्राकृतिक स्रोत तथा वित्त आयोगको सातौं वार्षिक प्रतिवेदन, २०८२ (Seventh Annual Report, 2082) — National Natural Resources and Fiscal Commission, Government of Nepal, 2082 BS. Executive summary, section 2(क), PDF p. 12; Chapter 4.1.1 and Table 4.1, printed pp. 342–343. Checked 2026-10-10
  7. महालेखापरीक्षकको त्रिसट्ठिऔं वार्षिक प्रतिवेदन, २०८३: सारांश (The Auditor General's Sixty-Third Annual Report Summary, 2026) — Office of the Auditor General, Nepal, 2083-02-01 BS / 15 May 2026 (as listed on oag.gov.np). Foreword (प्राक्कथन), PDF p. 7. Checked 2026-10-10
  8. राष्ट्रिय प्राकृतिक स्रोत तथा वित्त आयोगको सातौं वार्षिक प्रतिवेदन, २०८२ (Seventh Annual Report, 2082): conclusions and suggestions — National Natural Resources and Fiscal Commission, Government of Nepal, 2082 BS. Chapter 5.1 (conclusion), printed p. 361; Chapter 5.2 suggestions table, items 1, 3, 5, 6, 10, printed p. 362–363; item 23 (local levels declaring themselves tax-free), printed p. 364. Checked 2026-10-10

Independent research

  1. Ashok Singh Bist, 'Challenges of federalism implementation in Nepal', Vol. 17, No. 1-2, pp. 54-68, doi:10.3126/hssj.v17i1-2.97394 — Humanities and Social Sciences Journal (Ratna Rajyalaxmi Campus), via NepJOL, 31 December 2025. Abstract (article landing page). Checked 2026-10-10

Corrections & right of reply

Parties, leaders and readers may ask us to correct an error or add a documented response. Corrections are published visibly with the date and reason; no one can pay to change coverage.

The submission channel is not open yet. It will open once an editorial contact and review process are in place.

Change history
  1. 2026-10-10 — First draft of the federalism and local services issue page (all eight questions), with sources opened on this date. (New topic page for the National Agenda; submitted for editorial and native Nepali review. Party positions deliberately left out pending research covering all parties in the House at once.)
  2. 2026-10-10 — Independent fact-check (version 2): every cited source re-opened and each figure, date and provision checked at its locator. All figures were confirmed; no number needed correcting. Wording corrections are listed in the following entries. (Pre-publication verification. Details are in the Verification section of research-notes/federalism-local-services.md.)
  3. 2026-10-10 — The 30 per cent figure is now described as a Commission 'suggestion' (सुझाव), not a 'recommendation' (सिफारिस), everywhere it appears (classification, disputed, option 2, progress indicator). Each use states that it is not adopted policy or a government target. The 8th report (which repeats the suggestion and records it as not implemented for FY 2083/84) was added as a cite. (The 7th report (suggestion 5, printed p. 362) and the 8th report (PDF pp. 157, 159) both label it a सुझाव. The 7th report separates its formal recommendations from its suggestions (printed p. 361). Editorial default: NNRFC material must be labelled as the Commission's view, and the 30 per cent figure must not read as an official target.)
  4. 2026-10-10 — Concurrent powers are now shown as shared. The dek, why item 1 and the local and provincial responsibility rows now say that education, health, water supply and irrigation are also on the concurrent lists (Schedules 7 and 9). LGOA s.11(3)–(4) was added to the shared row and to law_policy. (Schedule 9 items 2, 3 and 5 and Schedule 7 item 18 list these as concurrent. LGOA s.11(3)–(4) (p. 25) says local levels exercise Schedule 9 powers in collaboration with the federation and provinces, subject to their law. The earlier 'exclusive powers' and 'main job' wording implied sole local responsibility.)
  5. 2026-10-10 — Provincial responsibility row: Article 235(2) power now attributed to the Provincial Assembly, not the provincial government. The vehicle-tax share to local levels (40%) was added. (Article 235(2) (p. 121) gives this power to 'the Provincial Assembly'. The 40% share is from IGFA s.6A(2) (PDF p. 4).)
  6. 2026-10-10 — Conditional-grant item reworded from 'most of what the federal government sends to local levels' to 'most of the federal fiscal transfers (grants, not counting revenue sharing) allocated to local levels'. The Auditor General's matching observation (para 94) was added with its cite. The classification rationale was aligned. (The NNRFC infographic (8th report, PDF p. 19) covers allocated fiscal transfers only and excludes revenue sharing.)
  7. 2026-10-10 — Bist (2025) items: the abstract was re-read. 'Delays in key laws' was corrected to 'delayed implementation of key federal laws' (ne had 'delay in making laws'). 'Political interference' was added as the abstract states it. 'About a third' was changed to 'nearly one third'. Both items now say this is one study's finding and remain under uncertain and disputed. The publisher name was corrected to Ratna Rajyalaxmi Campus. (Match the abstract wording on nepjol.info. Editorial default for single-abstract claims.)
  8. 2026-10-10 — Equalization-cut dispute: 'cut mid-year' was changed to 'transfer less than it budgeted'. The Appropriation Act mechanism (re-determination in proportion to revenue collected against target) is now described accurately. A note was added that the government's own reasoning is not in the sources reviewed. (NNRFC 7th report suggestion 3 (printed p. 362) does not say the cut was mid-year. A note on the absence of the government's view keeps the dispute even-handed.)
  9. 2026-10-10 — Removed or softened unsourced causal and interpretive phrases: 'This is why the Constitution requires equalization grants' (replaced with Article 60(4) and 60(8) as stated); 'Both affect services this year'; 'which is the purpose of the local power list'; 'provinces lead on shared matters' (option 3). Option 2's Article 60(3) benefit is now attributed to the Commission, and option 1 states that the block-grant idea is a Commission recommendation as well as a 16th Plan aim. (These claims were not stated in any cited source. Neutrality: options should not present one institution's argument as fact.)
  10. 2026-10-10 — Smaller precision fixes. 16th Plan: 'performance-based' changed to 'need- and performance-based', and the sector-level conditional-grant aim was added. LGOA hydropower wording changed to 'local policy, plans and regulation'. Article 234 now also covers disputes between provinces. The Inter-Province Council now lists the chief ministers 'of the provinces concerned'. The OAG item now gives the previous year's 327 and says the beruju relates to audits of FY 2081/82. The audit-gap item now says 'protests and incidents', notes that the 179 offices are not broken down by level, and gives the 721 local levels audited. The FY 2083/84 budget date was set to 2083 Jestha 15. (Match source wording: 16th Plan programme 7 (printed p. 191); LGOA s.11(2)(ध)(3); Constitution Art. 234(1); OAG foreword and para 89; budget statement cover page.)
  11. 2026-10-10 — Nepali: 'संघ/संघीय/संघीयता' was standardised to 'सङ्घ/सङ्घीय/सङ्घीयता' throughout. The one exception is the page title, which must match taxonomy.json ('संघीयता र स्थानीय सेवा'): the build rejects a different translation, and this edit was limited to the issue file. All ne fields changed above were re-aligned with en, including numbers, hedges and the सुझाव/सिफारिस distinction. 'उपधारा' was corrected to 'उपदफा' for Act sub-sections. (House spelling standard and bilingual fidelity. ne_status stays draft-needs-native-review.)
  12. 2026-10-10 — Title spelling standardised to सङ्घीयता (Consistent spelling across the site (सङ्घ/सङ्घीय))
  13. 2026-10-10 — Published after independent source-by-source verification. Party positions not yet included (to be added for all House parties together). Nepali text awaiting native review. (Editorial decisions: NNRFC figures kept as official data; the 30% figure is labelled a Commission suggestion and not an official target. Items from one academic abstract are worded as one study’s finding under uncertain/disputed.)