(1) Two or more municipalities and municipalities, rural municipalities and rural municipalities or municipalities and rural municipalities within a district that have borders can pass a proposal to merge with each other by a majority of the members immediately existing in the relevant assembly.
(2) When passing the resolution as per sub-section (1), the details including the name, ward boundaries, number and center of the rural municipality or municipality that will be maintained after merging with each other shall be sent to the provincial government.
(3) If a proposal with details is received as per sub-section (2), the provincial government shall analyze the economic and social aspects of such proposal and make a recommendation to the Government of Nepal within thirty days.
(4) Based on the recommendation under sub-section (3), if the Government of Nepal decides to merge the rural municipality and municipality, it shall specify the name of such rural municipality or municipality, the number of wards, the boundaries and the center as well.
(5) The implementation of the decision regarding the amalgamation of municipalities or rural municipalities in accordance with this section shall be effective from the next election.
(6) In addition to the subsidy provided by the Government of Nepal and the Provincial Government prior to the merger, additional subsidies shall be provided to rural municipalities or municipalities that have been merged in accordance with this section.