Karnali, November 3: A meeting of the Provincial Council of Economic Affairs has issued a 19-point commitment aimed at strengthening fiscal federalism through improved budget management, administrative efficiency and coordination among provincial governments.

The meeting, which concluded on Monday after being inaugurated by Karnali Chief Minister Mangal Bahadur Shahi, called for effective implementation of constitutional provisions related to fiscal federalism and greater autonomy for provincial and local governments.

The commitments include ensuring constitutional guarantees for fiscal equalisation grants, ending federal government interference in small-scale projects implemented by sub-national governments, and reviewing revenue-sharing and royalties from natural resources.

The meeting also called for transferring authority over traffic fines and vehicle inspections to provincial governments, eliminating duplication of government structures, and removing administrative and legal obstacles to the effective exercise of provincial powers.

Other priorities include simplifying procedures for foreign assistance and loans, reviewing the Sub-National Treasury Regulatory Application (SUTRA) system, and revisiting existing laws governing fiscal federalism.

The commitment paper also highlights the need for stronger public financial management, pre-budget consultations, improved coordination with local governments, efficient provincial institutions, increased internal revenue, good governance and transparency.

It further stresses the importance of developing a common position among provincial governments on matters related to federalism.

The document was signed by the ministers for economic affairs and planning from Koshi, Madhes, Bagmati and Lumbini provinces.

During the meeting, Dr Khim Lal Devkota, chairperson of the Centre for Federalism and Localisation, presented a paper on intergovernmental coordination for strengthening fiscal federalism. He also discussed good practices adopted by provincial governments, the progress of implementation, existing challenges and possible ways forward.

Addressing the inaugural session, Chief Minister Shahi stressed the need for wider debate on ensuring the effective implementation of the Constitution and the federal system.

He said the effective implementation of federalism was directly linked to fulfilling citizens’ expectations, adding that provincial governments would become stronger as federalism was reinforced.