Nepal’s transition from a unitary state to a federal democratic republic in 2015 was driven by the vision of bringing "government to the doorsteps of the people." However, a decade of implementation reveals a troubling fiscal reality. This research paper analyzes the historical trajectory of Nepal’s national budgets across five distinct political eras—from the Rana regime (1939) to the current federal structure (2026)—to evaluate the sustainability of the present governance model. Through a comparative analysis of fiscal data, this study finds a distressing trend: while the Rana and Panchayat eras maintained relatively low administrative costs, the federal era has seen recurrent expenditures skyrocket, now consuming over 63% of the total budget. The data suggests that the three-tier structure, specifically the provincial level, has become a "fiscal burden" rather than a developmental catalyst. Currently, significant resources are diverted to sustain 550 provincial assembly members and an expansive ministerial bureaucracy, leaving less than 16% of the budget for actual capital development. This paper argues for a "Revolutionary Structural Transformation" centered on administrative parsimony. The proposed model suggests the abolition of the provincial legislative assemblies and redundant constitutional positions, redirecting an estimated savings of over NPR 40 billion annually toward grassroots development. By shifting the focus to a "Ward-Centric Governance" system, where authority and resources are concentrated at the most local level, Nepal can achieve the true essence of decentralization. The study concludes that right-sizing the government by reducing the number of local units and empowering the 6,743 wards is the only viable path to escape the current debt trap and ensure long-term economic prosperity for the nation.
Chandra Adhikhari (2026) studied this question.