There was no consensus among the parties on state restructuring, which has remained one of the most disputed issues in constitution-drafting. The dispute remained whether state restructuring should be based on a single identity or multi-identity. While there was no consensus among UCPN (M), Nepali Congress, UML, and United Democratic Madhesi Front (UDMF) on the number of states and their delineation, the government decided to extend the Constituent Assembly (CA) for three months by amending the Interim Constitution (2006).
UCPN (M), Nepali Congress, and UML reached a five-point agreement on state bodies, form of government, formation of parliament, judiciary, and constitutional court, which included the multi-ethnic character of all the states, 11 states under state restructuring, states to be named by the state assemblies, and a formation of a central federal commission for delineating boundaries of the states. The agreement also included a mixed form of government of directly elected president and prime minister elected through the parliament, mixed election system, 311-member Lower House and 65-member Upper House, formation of constitutional court chaired by the Chief Justice.
While UCPN (M), Nepali Congress, UML, and United Madhesi Democratic Front (UDMF) were engaged in discussions on state restructuring, the country saw protests and bandas for and against it. There was no agreement among the parties after UCPN (M) went for naming the provinces after single ethnic groups and other parties were against naming the provinces after ethnicity. In the meantime, the bandas for undivided far west and Mithila continued.
UCPN (M), Nepali Congress, UML, and United Democratic Madhesi Front (UDMF) who had been engaged in discussions to resolve the disputed of the constitution have entered into a national consensus government. Nepali Congress and UML put on pressure on prime minister Baburam Bhattarai to resign to pave the way for a national consensus government. they warned the prime minister of brining a vote of no confidence if he did not resign.
UCPN (M), Nepali Congress, UML, and United Democratic Madhesi Front (UDMF) reached an agreement to establish a constitutional court for five years and provide citizenship to children of parents if either father or mother is a Nepali national. There was an agreement to a directly elected president and executive prime minister elected from the parliament, but was no agreement upon their jurisdiction. After UCPN (M), Congress, and UML proposed separate models for separate state restructuring, the distance between the parties grew more.
After reaching consensus on disputed issues of the peace process, political parties become focused on also seeking consensus on constitution-drafting issues. For this purpose, UCPN (M), Nepali Congress, UML, and United Democratic Madhesi Front (UDMF) reached Hattiban Resort at Pharping. For two days, they held group and separate discussions on form of government, election system, judicial system, citizenship issues, and state restructuring. The talks and discussions attended by top leaders could not reach any consensus.
The meeting of the Army Integration Special Committee (AISC) decided on April 10 to bring the Maoist combatants, weapons and containers used to store them, cantonments and properties therein under the Nepal Army. Before handing over the cantonments to the Nepal Army and beginning the regrouping process for integration, AISC decided to retain its earlier decision to offer of voluntary retirement or rehabilitation package to the combatants who choose to do so.