Call to seek way out of problems in fiscal federalism through common understanding

Kathmandu, Nov 29: The Chief Minister of Madhes Province and the Economic Affairs Ministers of other provinces have stressed on the need of moving ahead with shared understanding and seeking solution to the problems observed in implementation of the fiscal federalism. 

They opined that although the problems seen in the execution of fiscal federalism have been gradually been resolved, ways should be sought for resolving the new types of problems emerging in the new situation.  

At the 11th meeting of the Inter-Governmental Fiscal Council here on Friday, Madhes Province Chief Minister Saroj Kumar Yadav and the ministers for economic affairs and planning of the other provinces as well as well as the Council members and experts spoke on the challenges related to the implementation of fiscal federalism and the way out. 

On the occasion, the Economic Affairs Ministers of all seven provinces handed to the Federal Finance Minister for facilitating implementation of the Declaration on Fiscal Federalism that they had jointly developed.

Council Coordinator and Finance Minister Rameshore Prasad Khanal had chaired the meeting held at the Ministry of Finance, Singha Durbar. Council members and other invitees had attended the meeting, according to Finance Ministry's spokesperson Tanka Prasad Pandey.

In the meeting, Joint Secretary Sewantak Pokharel, Head of the Fiscal Federalism Coordination Division, emphasised that while implementing fiscal federalism, all three tiers of government should deliver services in a way that it directly promotes good governance.

He highlighted issues such as resolving disputes arising in the implementation of budget and projects by the federal, provincial and local levels, implementation of taxes, systematizing the accounting methods for revenue and expenditure, and their reporting systems.

Similarly, he said the meeting was held also to discuss human resource management and the implementation of the Third Public Financial Management Reform Strategy, financial discipline, the use of resources by the three tiers of the government in the upcoming elections, and suggestions to be presented at the upcoming Inter Provincial Council meeting.

The representatives of various municipalities, including the presidents of the Municipal Association of Nepal, stated that issues regarding the allocation of financial equalisation grants should be clarified promptly, legal and procedural matters related to the implementation of fiscal federalism should be resolved quickly, and contradictions seen during law implementation should be addressed.

Similarly, views were expressed on issues such as the management of projects, organisational structure and management the province and local levels have been facing, and the need for assistance in rebuilding physical infrastructure damaged during the Gen Z movement.  

On the occasion, Finance Minister Khanal stated that the provinces and local levels are independent and self-responsible in budget formulation and implementation. He mentioned that the identification of problems and solutions would emerge by expressing commitment to financial federalism, even during the implementation process.  (RSS)