A report titled ‘Discontent to Deliberation: Challenges and opportunities in Nepal’s governance process’, published by Centre for Social Change, has identified that practice of federalism in Nepal continues to generate legal and political conflicts, particularly around the delineation of powers and responsibilities between the levels of the government.
Provincial governance remained at a flashpoint, with repeated disputes over the appointment and dismissal of Chief Ministers. For instance, in Koshi Province, a dramatic series of legal and political maneuvers followed the resignation of Chief Minister Kedar Karki, the report says. His attempt to prevent the appointment of his successor, Hikmat Karki, was challenged in the Supreme Court under Article 76(5), which governs the formation of a new government when no party commands a majority.
At the local level, the promise of decentralized governance was repeatedly tested by disputes over fiscal transfers, budget processes, and intra-governmental coordination. The report says one of the most significant flashpoints occurred in June 2024, when the federal government announced a steep reduction, by almost 26 percent, in fiscal equalization grants to local governments.
Regarding the ethnocultural government, the report says a defining feature of ethnocultural conflict over the past year has been land-related struggles that reflect both class-based and identity-based exclusion. In particular, the case of Swargadwari Guthi tenant farmers from Dang demonstrates the intersection between landlessness, caste, and bureaucratic marginalization.
Nepal’s cultural and religious diversity has become a site of contestation as development projects encroach upon sacred spaces. The Pathibhara (Mukkumlung) cable car project in Taplejung triggered sustained opposition from indigenous Limbu communities, who view the area as spiritually significant.
According to the report, the Language Bill became a flashpoint for identity-based protest in Madhes Province. In January 2025, a bill proposing Hindi as one of the official working languages alongside Maithili, Bhojpuri, and English was introduced in the provincial assembly. Despite the widespread use of languages like Tharu, Magahi, and Urdu in the region, these were excluded, leading to mass opposition from lawmakers and the public. Protesters burned effigies, blocked assembly proceedings, and accused the government of linguistic bias. The bill was withdrawn under pressure, but the episode exposed the limited consultation with affected communities and the volatility of language in identity politics.
Regarding the natural resources and environment governance, the report says that one of the most prominent trends observed in the reporting period was the escalation of community-led environmental movements, driven by mounting ecological violence and failures in state responsiveness.
The events of 2024–25 indicate that natural resource and environmental governance in federal Nepal is marked by high levels of conflict, contestation, and institutional fragmentation. Communities are increasingly asserting their rights, contesting unjust policies, and demanding sustainable and equitable resource management. Yet, systemic weaknesses persist in the forms of overlapping jurisdictions, politicization of resource access, elite capture, and insufficient regulatory enforcement.
The report aims to provide a comprehensive and empirically grounded analysis of how Nepal’s federal system has functioned over the past three years. Drawing on an extensive dataset of governance-related conflicts and cooperation, it examines how constitutional mandates are being exercised and contested in practice, especially within the domains of developmental, political, ethnocultural, and natural resources and environmental governance. The report offers a critical lens into the promises and paradoxes of federalism as a democratic project. It sets the stage for understanding not only the challenges of implementation, but also the stakes involved in navigating this complex system of governance.
