The draft constitution creates a new structure of government as it inserts a provincial (or state) level between central level, above, and district and village/town level, below:
Paragraph 60. Structuring of the State:
(1) The Federal Democratic Republic of Nepal shall have three
main levels of structuring: federal, provincial and local.
(2) The State powers of Nepal shall be used by the federal, provincial and the local level in accordance with this constitution.
(3) There shall be eight provinces in Nepal on the basis of identity and capability, which shall include caste/community, linguistic, cultural, geographical/regional continuity and historicity relating to identity; and, economic inter-relations and capability, status and viability of infrastructure development, availability of natural resources and means and easy accessibility to administration, in regard to capability. The government shall form a federal commission to make suggestions regarding the delineation of provinces. The term of the commission shall be for six months.
(4) The final decision on the provinces on the basis of the suggestions of the federal commission as provided for in sub-clause (3), shall be done by a two-thirds majority of the total number of existing members of the Legislature-Parliament within three months of the date of submission of the commission report to the transformed Legislature-Parliament in accordance with this Constitution.
(5) The naming of the province structured according to sub-clause (4) shall be done by a two- thirds majority of the total number of members of the provincial assembly concerned.
(6) There shall be rural municipality, municipality and district assembly under the local level. The number of wards of the rural municipality shall be specified by law.
(7) Special structures may be built as required and as provided for by law
(8) The Government of Nepal shall form a commission to determine the number and area of the village municipality, municipality and special structures,. The commission shall have to follow the criteria determined by the government of Nepal while determining the number and area of the village municipality, municipality and special structures.
(9)The formation of the commission according to sub-clause (8) shall be done within six months from the date of commencement of this constitution. The term of the commission shall be for one year.
(10) The federal, provincial and local entities shall protect Nepal’s sovereignty, unity, indivisibility, independence, national interest, all-round-development, multi-party competitive democratic republican federal governance system, human rights and fundamental rights, rule of law, separation of power, balance and control, an egalitarian society based on plurality and equality, proportional representation, and identity.