56.
Structure of State: (1) The main structure of the Federal
Democratic Republic of
Nepal shall be
of three levels, namely the Federation, the State and the Local level.
(2) The
Federation, State and Local levels shall exercise the power of
State of Nepal
pursuant to this Constitution and law.
(3) There shall
be States consisting of the Districts as mentioned in
Schedule-4
existing in Nepal at the time of commencement of this Constitution.
(4) There shall
be Village Institutions, Municipalities and District
Assemblies
under the Local level. The number of Wards in a Village Institution
and
Municipality shall be as provided for in the Federal law.
(5) Any
Special, Protected or Autonomous Region can be set by the
Federal law for
social, cultural protection or economic development.
(6) The
Federation, State and Local levels shall protect Nepal's freedom,
sovereignty,
territorial integrity, independence, national interest, overall
development,
multi-party, competitive, democratic, republican, federal system of
governance,
human rights and fundamental rights, rule of law, separation of
powers and
check and balance, egalitarian society based on pluralism and equality,
inclusive
representation and identity.
57.
Distribution of State power: (1) The powers of the
Federation shall be vested in
the matters
enumerated in Schedule-5, and such powers shall be exercised
pursuant to
this Constitution and the Federal law.
(2) The powers
of a State shall be vested in the matters enumerated in
Schedule-6, and
such powers shall be exercised pursuant to this Constitution and
the State law.
(3) The
concurrent powers of the Federation and the State shall be
vested in the
matters enumerated in Schedule-7, and such powers shall be
exercised
pursuant to this Constitution, the Federal law and the State law.
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(4) The powers
of the Local level shall be vested in the matters
enumerated in
Schedule-8, and such powers shall be exercised pursuant to this
Constitution
and the law made by the Village Assembly or Municipal Assembly.
(5) The
concurrent powers of the Federation, State and Local levels
shall be vested
in the matters enumerated in Schedule-9, and such powers shall be
exercised
pursuant to this Constitution, the Federal law, the State law and the law
made by the
Village Assembly or Municipal Assembly.
(6) Any law to
be made by the State Assembly, Village Assembly or
Municipal
Assembly pursuant to clause (3) or (5) shall be so made as not to be
inconsistent
with the Federal law, and any law made by the State Assembly,
Village
Assembly or Municipal Assembly which is inconsistent with the Federal
law shall be
invalid to the extent of such inconsistency.
(7) Any law to
be made by the Village Assembly or Municipal
Assembly
pursuant to clause (5) shall be so made as not to be inconsistent with the
State law, and
any law made by the Village Assembly or Municipal Assembly
which is
inconsistent with the State law shall be invalid to the extent of such
inconsistency.
58.
Residual powers: The Federation shall have power on any
matter not enumerated
in the Federal
List, State List, List of Local level or Concurrent List or on any
matter which is
not so specified in this Constitution as to be exercised by any
level.
59.
Exercise of financial powers: (1) The Federation,
State and Local level shall
make laws, make
annual budget, decisions, formulate and implement policies and
plans on any
matters related to financial powers within their respective
jurisdictions.
45
(2) The Federation
may so make necessary policies, standards and laws
on any of the
matters enumerated in the Concurrent List and other areas of
financial
powers as to be applicable also to the States.
(3) The
Federation, State and Local level shall make budget of their
respective
levels, and the time for submission of budget by the State and Local
level shall be
as provided for in the Federal law.
(4) The
Federation, State and Local level shall provide for the equitable
distribution of
benefits derived from the use of natural resources or development.
Certain
portions of such benefits shall be distributed, pursuant to law, in forms of
royalty,
services or goods to the project affected regions and local communities.
(5) If, in
utilising natural resources, the local community desires to
make investment
therein, the Federation, State and Local level shall accord
priority to
such investment in such portion as provided bylaw on the basis of the
nature and size
of such investment.
(6) The
Government of Nepal shall have power to obtain foreign
assistance and
borrow loans. Such assistance or loans shall be so obtained or
borrowed as to
have macro-economic stability of the country.
(7) Provisions
relating to the management of budget deficits and other
fiscal
discipline of the Federation, State and Local level shall be as provided for in
the Federal
law.
60.
Distribution of sources of revenue: (1) The Federation,
State and Local level
may impose
taxes on matters falling within their respective jurisdiction and collect
revenue from these
sources.
Provided that
provisions relating to the imposition of taxes and collection
of revenue on
matters that fall within the Concurrent List and on matters that are
not included in
the List of any level shall be as determined by the Government of
Nepal.
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(2) The
Government of Nepal shall make provisions for the equitable
distribution of
the collected revenue to the Federation, State and Local level.
(3) The amount
of fiscal transfer receivable by the State and Local level
shall be as
recommended by the National Natural Resources and Fiscal
Commission.
(4) The
Government of Nepal shall, on the basis of the need of
expenditure and
revenue capacity, distribute fiscal equalization grants to the State
and Local
level.
(5) Each State
shall, in accordance with the State law, distribute fiscal
equalization
grants out of the grants received from the Government of Nepal and
revenues
collected from its sources, on the basis of the need of expenditure and
revenue
capacity of its subordinate Local level.
(6) Provisions
relating to distribution of conditional grants,
complementary
grants or special grants for other purposes to be provided by the
Government of
Nepal from the Federal Consolidated Fund shall be as provided for
in the Federal law.
(7)
Distribution of revenues between the Federal, State and Local level
shall be made
in a balanced and transparent manner.
(8) A Federal
Act on the distribution of revenues shall be made having
regard to the
national policies, national requirements, autonomy of the State and
Local levels,
services to be rendered by the State and the Local level to the people
and financial
powers granted to them, capacity to collect revenues, potentiality and
use of
revenues, assistance to be made in development works, reduction of
regional
imbalances, poverty and inequality, end of deprivation, and assistance to
be made in the
performance of contingent works and fulfilment of temporary
needs.
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