The present paper examines with the political status of Nepal in the present time, implication of federalism, economic burden on the nation, and different possibilities in future. Success or failure of federalism depends on the performance of the politicians and their parties on behalf of the nation. Most of the politicians are not responsible towards the good governance and general public are frustrated from the policy and mischiefs of the political parties. Nepal is a small country but supporters of the federalism have divided it into 1 central government, 7 provinces and 753 local governments. The nation like Nepal that depends on the foreign aids certainly has a lot of economic burden and naturally that will lead to the failure of federalism.