Nepal 2006 Constitution (reviewed 2012)

Part 17. STRUCTURE OF STATE AND LOCAL SELF-GOVERNANCE

138. Progressive restructuring of the State

1. There shall be made progressive restructuring of the State with inclusive, democratic federal system of governance, by doing away with the centralized and unitary structure of the State so as to end discriminations based on class, caste, language, gender, culture, religion and region.
2. Recognizing the desire of the indigenous peoples and of the people of backward and other area including Madhesi people towards autonomous provinces Nepal shall be a federal democratic republican state. Provinces shall be autonomous and vested with full authority. The boundaries, number, names and structures, as well as full details of the lists, of autonomous provinces and the center and allocation of means, resources and powers shall be determined by the Constituent Assembly, while maintaining the sovereignty, unity and integrity of Nepal.
3. There shall be constituted a high level commission to make suggestions on the restructuring of the State as referred to in Clauses (1) and (1a) The composition, function, duty, power and condition of service of such commission shall be as determined by the Government of Nepal.
4. The final settlement on the matters relating to the restructuring of the State and the form of federal system of governance shall be as determined by the Constituent Assembly.

139. Provisions on local self-governance

1. The election to local self- governance bodies shall be held based on decentralization and devolution of authority in order to promote the participation of people, to the maximum extent possible, in the system of governance of the country by creating such environment as is conducive to the exercise of sovereignty by the people even from the local level, deliver services to the people at the local level and have institutional development of democracy even from the local level.
2. Interim local bodies shall be formed at the district, municipal and village levels by the Government of Nepal, with the consent and participation of the political parties which are actively involved at the local level pending the election to the local authorities.Explanation: For the purpose of this clause, the expression “political parties which are actively involved at the local level” shall mean the political parties which have representation in the Constituent Assembly and filed candidacy in the concerned district under the first-past-the-post electoral system in the election, to that Assembly.
3. The organizational structure, framework, territorial boundaries and mode of formation of the local self-governance bodies shall be as provided by law.

140. Arrangement and mobilization of revenue

1. There shall be mobilization and allocation of responsibilities and revenues between the Government of Nepal and the local self-governance bodies as provided by law in order to make the local self-governance bodies accountable for the identification, formulation and implementation of local level plans, while maintaining equality in the mobilization, appropriation of means and resources and in the balanced and equitable distribution of the fruits of development with a view to strengthening the local self-governance bodies for local development.
2. While mobilizing and allocating revenues pursuant to Clause (1), special attention shall be accorded to the overall upliftment of those classes and communities who are backward socially and economically in such a manner as to have a balanced and equal development of the country.