Regional Economic Disparities Persist Despite Federalism

Nepal, after adopting a federal governance system, has aimed to distribute development opportunities, resources, and economic benefits in a balanced manner across all its provinces. The core principle of federalism is to advance development based on local needs, potential, and priorities, and to reduce regional inequalities.

However, nearly a decade after the implementation of the federal structure, economic production, income, investment, infrastructure development, and employment opportunities have not been distributed equally among the provinces. While some provinces have made significant progress in economic activities, industrial development, service sector expansion, and attracting investment, some provinces still lag behind due to low production, limited investment, and a weak economic base.