Inter-governmental fiscal council meeting stresses on effectively implementing fiscal federalism

Kathmandu, April 21 :  The 8th meeting of the Inter-government Fiscal Council has pointed out the need of coordination and collaboration among three tiers of the government for effectively implementing fiscal federalism.     

The meeting held at the Finance Ministry on Friday drew a conclusion that there was no coordination among the three tiers in regard to planning, budget allocation, implementation, public spending and revenue collection.     

The meeting decided to run projects avoiding duplication among the governments, further consolidate tax collection system, clarify duplication in taxation and formulate laws based on fiscal federalism.     

Also, the meeting decided to adopt optimum management and utilization of resources received, avoid creating burden without prior determining sources and set priorities while formulating plan.     

On the occasion, Finance Minister Dr Prakash Sharan Mahat said projects should be selected only after assuring sources. All three tiers of government should be equally responsible for the implementation of fiscal federalism, he added.     

"There is a problem in lack of law on some matters. Even implementation has flaws. We have also created some problems", Dr Mahat noted.     

The Council headed by Finance Minster comprises Province Economic Affairs and Planning Minister, Chairperson of Natural Resource and Fiscal Commission, National Planning Commission Vice-Chair and Chief Minister as members.     

"There are myriad of problems in economy. But we do not have choices. One alternative is to ruthlessly axe recurrent expenditure", Dr Mahat mentioned.     

He also urged the province governments to carry out works being based on available resources by not procuring new goods.     

One of the key problems now is immoderately low development budget at all three tiers. "Capital spending is quite a low in all three tiers of government. It needs prioritization of spending for its increment", he noted.     

The Finance Minister further said, "Projects without fixed sources would not yield results in concrete and subsequently put the people in frustration. It also raises question on our credibility", Dr Mahat viewed.     

The Finance Minister also admitted inefficiency in budgetary allocations and called for the need of reforms in this regard.     

"We should not keep on the traditional style of scattering budget everywhere. I will put my all-out efforts to check this trend. We will lay emphasis on the prioritized projects assured with sources". (RSS)