The federal government’s decision to task local governments with removing encroachments from public and government land and managing the relocation of landless squatters has reignited a longstanding and unresolved issue. While the move is framed as an attempt to bring the process closer to communities, it has raised serious concerns over whether municipalities have the legal authority, financial resources and institutional capacity to shoulder such a complex responsibility.

The circular, issued by the Ministry of Federal Affairs and General Administration on Thursday, directs all 753 local units (metropolises, sub-metropolises, municipalities and rural municipalities) to identify genuine landless squatters, manage their relocation and only then proceed with clearing encroached land. The directive is linked to point 92 of the government’s 100-point action plan endorsed by the Council of Ministers.

However, the federal government’s attempt to devolve responsibility comes despite the fact that similar efforts have failed repeatedly. Since 1990, at least 19 commissions have been formed to address the issue of landless squatters and informal settlers, with limited success. The latest move, stakeholders say, risks repeating the same pattern unless structural constraints are addressed.

Local governments, while constitutionally mandated to protect public assets within their jurisdictions, do not have the legal authority to distribute land. That authority rests primarily with the federal government through mechanisms such as the National Land Commission. As a result, municipalities find themselves caught between responsibility and limitation.

According to data collected by the commission through local units, a total of 1,213,812 families have applied for land ownership. Among them, 98,851 are landless Dalits, 181,378 are identified as landless squatters and 933,583 fall under the category of informal settlers. Officials estimate that only around 280,000 families qualify as genuinely landless, while the rest are people who have settled informally on public or government land despite having land elsewhere or due to displacement caused by natural disasters.

These populations are spread across riverbanks, forest areas, floodplains, slopes and other public land, often in highly vulnerable conditions. The scale of the problem, both in terms of numbers and geography, presents a notable administrative challenge.

Bhim Prasad Dhungana, president of the Municipal Association of Nepal, said the federal directive overlooks the ground realities faced by local governments. “Protecting public land is within our jurisdiction, and we are ready to cooperate with the federal government,” he said. “But managing and rehabilitating squatters is not something municipalities can do alone. The Constitution clearly assigns this responsibility to all three tiers of government.”

Dhungana, who is also the mayor of Nilkantha Municipality in Dhading, pointed to financial constraints as a major barrier. He said recent cuts in financial equalisation grants and reductions in budget allocations listed in the government’s ‘Red Book’ have left municipalities struggling to meet even existing obligations.

“Many municipalities are facing a financial crisis,” he said. “We are struggling to pay contractors for completed projects. In such a situation, expecting local governments to take on new responsibilities like large-scale resettlement is unrealistic.”

The ministry’s circular requires local units to coordinate with district administration offices to verify the status of “genuine landless squatters” before initiating eviction. It also directs local units to prepare detailed relocation plans and ensure that displaced families are provided with basic necessities, including safe housing, food and medical care.

Citing Section 97 of the Local Government Operation Act, 2017, the ministry stated that the primary responsibility for protecting public property lies with the local government. It added that municipalities can seek support from district administration offices if security challenges arise during eviction operations.

However, local officials argue that the directive places disproportionate responsibility on municipalities without addressing the legal and logistical complexities involved.

Hari Prasad Rijal, chairperson of the National Land Commission, said the commission has completed scientific data collection on landless squatters and informal settlers and is currently verifying applications. He said around 100,000 land ownership certificates are ready for distribution to verified beneficiaries.

“The process is moving forward in a phased manner,” Rijal said. “The roles of federal, provincial and local governments are clearly defined in law. The problem can be resolved through coordination and cooperation among all three levels.”

The existing commission, formed on October 30, 2024, is the 19th body established since 1990 to address landlessness. Its work, however, has been affected by political and legal disruptions, including last September’s Gen Z protests, ongoing litigation and the enforcement of the election code of conduct.

Despite these challenges, municipalities across the country have collected data on landless and informal settlers and entered it into the commission’s information system as part of a working agreement.

Province-wise data shows that Lumbini has the highest number of applications at 318,985, followed by Koshi with 252,000, Sudurpashchim with 231,000, Bagmati with 135,000, Madhesh with 124,000, Gandaki with 92,800 and Karnali with 58,000.

Land rights activist Biswas Nepali said the actual number of landless people may be higher than official figures suggest. “The problem affects around 1.5 million families, or between 5 to 6 million people,” he said. “The commission’s data is still incomplete, and many affected populations are yet to be fully documented.”

The Land Act, 1964 defines landless squatters as individuals who do not own land anywhere in Nepal, including dependent family members such as spouses, parents and children. It also categorises Dalits without land as landless Dalits.

Informal settlers, on the other hand, are those who have been living on public or government land—often for years—by cultivating or building houses, sometimes due to displacement caused by landslides, floods or other socio-economic factors.

Section 52(C) of the Act provides that informal settlers who have occupied public land for at least 10 years may be granted land at the same location once, within specified limits. This provision, introduced through an amendment in February 2020, has encouraged many informal settlers to apply for land ownership.

However, recent government actions have raised questions about adherence to these legal provisions. Since April 25, authorities have carried out eviction drives using bulldozers along riverbanks of Kathmandu, including Thapathali, Sinamangal, Jadibuti, Manohara and Balkhu. Hundreds of families have been displaced as a result.

Ram Thapa, mayor of Damak Municipality in Jhapa district in eastern Nepal, said local governments cannot act hastily in response to federal directives. “The Land Commission is currently conducting surveys in our area,” he said. “We cannot proceed with eviction or relocation until that process is complete.”

He added that municipalities lack the resources to provide immediate alternatives for displaced families. “We do not have the capacity to house or feed people who are rendered homeless overnight,” he said. “These are practical challenges that the federal government must consider.”

Thapa also noted that recent unrest, including arson during protests, has further strained municipal resources. “We are already struggling to deliver basic services,” he said. “Starting eviction drives under these conditions is not feasible.”

The Constitution of Nepal guarantees the right to housing under Article 37 and mandates the provision of land to landless Dalits under Article 40(5). It also calls for the rehabilitation of marginalised groups, including landless people, under Article 42 and outlines state obligations in this regard under Article 51.

Despite these constitutional provisions, activists say the current approach undermines legal and humanitarian standards.

Jagat Deuja, a land rights activist and former expert member of the National Land Commission, said the government’s actions represent a step backwards. “Evictions should only take place after proper identification and the provision of alternatives,” he said. “What we are seeing now goes against the spirit of the Constitution and existing laws.”

Deuja said the repeated failure to resolve the issue is not due to a lack of commissions but due to a lack of continuity and political commitment. “Commissions are formed and then dissolved with changes in government,” he said. “They are not given enough time or legal support to complete their work.”

He acknowledged, however, that recent efforts in data collection represent progress. “Accurate data is essential for policy implementation,” he said. “Without it, distribution of land ownership certificates is not possible.”

According to available records, earlier commissions- the ones formed before the present constitution was promulgated- distributed land ownership certificates to around 142,000 squatters, although documentation issues persist. More recently, 9,012 families have received certificates.

Laxmi Devi Pandey, chairperson of the National Association of Rural Municipalities in Nepal, said local levels are already working to identify and manage landless populations in coordination with the commission. “Municipalities are doing what they can,” she said. “But they need legal clarity, financial resources and skilled manpower to do more.”

Narulal Chaudhary, general secretary of the Municipal Association of Nepal and mayor of Ghorahi Sub-Metropolitan City, criticised the federal government’s approach. “Local governments are already engaged in identifying squatters and managing settlements,” he said. “It is not effective to demolish settlements and then ask municipalities to deal with the consequences.”

He said a coordinated and phased approach is necessary. “Management of squatters should be based on proper data, planning and support,” he said. “Ad hoc actions only create more problems.”

Women’s rights activist Bhagawati Adhikari warned that the eviction drives have serious social consequences. “Thousands of people have been made homeless,” she said. “Women and children are the most affected, and their situation in temporary shelters is really difficult.”

She said the government’s actions disregard established legal procedures. “Evictions are being carried out without following due process, the Constitution or existing laws,” she said. “This must be reconsidered.”