The State Restructuring Committee of the CA had proposed a confederation of 14 states based on ethnicity, but in the first meeting of the Commission members were unanimously against it. They felt ethnicity should not be the basis for state restructuring. The SRC members were left speechless after member Sarbaraj Khadka pointed to the dangers of ethnicity-based federal units. "We will have to make 101 states in the country for 101 ethnic groups," he reportedly said, "you can't deny one group the right to state because it has fewer people, and give another the same because it has more people."

The members also agree that carving out 14 states would not be viable, and they felt more comfortable with a 10-province model based on geography, economic status and identity. Another member of the Commission said: "Ideally Nepal would do best with seven states. If that's not possible, we will at least try to work out a nine state plan."