The paper stars with a review of what women of Nepal have achieved, in terms of economic empowerment and capabilities, factors that have played positive or negative role in this progress, and analyzes the current challenges in ensuring equal playing field to women of various social groups in the market economy, that Nepal is sure to follow. There have been significant public and non-government sector investment in Nepal in the last 20-25 years to increase women’s access to education and health facilities because of which HDI improved from 0.416 in 1991 to 0. 540, GDI improved from 0.312 to 0.912.  Women have gained much in terms of education and health, and income as well. Female/ Male earned income ratio in terms of Purchasing Power Parity$ has also jumped from 1/3 in 1995 to 0.727 in 2014.  However, women workers are still more concentrated than men in the subsistence agriculture and at lower ladders of non-agricultural employment. They overwhelming work in the non-formal sector.  Social norms which accord priority to their marriage restrict their mobility and make them entirely responsible for household work, increasing gender based violence (GBV), although decreasing but still significant lag in educational attainments, present formidable barriers to their career development in the professional field as elsewhere in south Asia. Unequal inheritance laws and practices further restrict their access to economic resources for personal development and gainful employment. More important these gains have not been distributed equitably across women of all social groups, regions and areas of Nepal.

Historically, economic and social policies have been made at the center, which appled to the whole country. These may not have percolated effectively to the grass roots level, but they are there as a reference point. In the past, the Nepali state has been liberal towards women, in the last two decades, formally accepting international standards of gender equality and need for empowerment of women, except in the case of citizenship rights. But federalization of the country, will divide this state power between the center and the states. How will various states exercise this power becomes an issue for women. Will the freedoms and facilities granted to women vary according to the philosophy of the political party? Will we have different legal frameworks which govern our lives? How can   substantive equality for all women be guaranteed across all states? The paper ponders over these questions and tries to assess the future scenario, from the review of current drafts of various parts of the constitution that have been agreed upon. Key words: gender equality and women’s empowerment; substantive and formal equality; federalization; division of power; equal playing field in the market.