KATHMANDU: Chief Minister of Madhesh Province Saroj Kumar Yadav and the economic affairs ministers of all provinces have emphasized the need for a shared understanding to address the persistent challenges in the implementation of fiscal federalism.
Speaking at the 11th meeting of the Inter-Governmental Fiscal Council held at Singha Durbar on Friday, provincial ministers said that while earlier obstacles in fiscal federalism had gradually been resolved, new forms of challenges were emerging in the changed context. They stressed that solutions must be pursued collectively.
During the meeting, economic affairs and planning ministers of all seven provinces jointly handed over to the federal government their “Declaration on Fiscal Federalism,” requesting the Finance Ministry to facilitate its implementation.
The session was chaired by Council Coordinator and Finance Minister Rameshore Prasad Khanal. According to Finance Ministry spokesperson Tanka Prasad Pandey, council members, experts, and representatives from municipalities and associations were also present.
Joint Secretary Sewantak Pokharel, head of the Fiscal Federalism Coordination Division, highlighted the need for effective and transparent service delivery from all three tiers of government to strengthen good governance. He outlined key issues such as resolving disputes over budget execution and project implementation across federal, provincial, and local levels, improving tax administration, and systematizing accounting and reporting mechanisms.
The meeting also discussed human resource management, financial discipline, execution of the Third Public Financial Management Reform Strategy, and resource utilization during the upcoming elections. Suggestions to be forwarded to the next Inter-Provincial Council meeting were also reviewed.
Representatives from municipalities, including the Municipal Association of Nepal, called for clarity on financial equalization grants and faster resolution of legal and procedural hurdles. They also raised concerns about inconsistencies in legal interpretation and the need for support to rebuild infrastructure damaged during the Gen Z movement.
Finance Minister Khanal reiterated that provinces and local governments are autonomous and responsible for their own budgeting processes. He noted that challenges and solutions alike would emerge through continued commitment to fiscal federalism and coordination among all levels of government.
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