News Details
Provincial Economic Affairs Ministers Council Meeting
Provincial Economic Affairs Ministers Council Meeting
Date: 2 November 2026 (Kartik 16, 2083), Monday
Venue: Surkhet, Karnali Province
Chair: Tek Raj Pachhai, Minister for Economic Affairs and Planning, Karnali Province
Introduction
The Provincial Economic Affairs Council met in Surkhet, Karnali Province. It discussed the implementation of fiscal federalism, budget governance, inter-provincial cooperation and the protection of provinces’ fiscal powers. The meeting concluded by issuing the 19-Point Common Commitment 2026.
Inauguration
Karnali Chief Minister Mangal Bahadur Shahi inaugurated the meeting. He said that healthy discussion is needed on the problems and challenges in implementing the constitution, federalism, and fiscal and administrative federalism. He added that provincial governments can be strong, and can meet citizens’ expectations, only if federalism itself is strengthened.
Paper Presentation
Dr. Khim Lal Devkota, Chair of the Federalism and Localization Center (FLC), presented a paper on strengthening fiscal federalism. It covered:
- Inter-governmental coordination and the roles of each tier
- Good practices of the provinces
- The status of implementation
- Problems and challenges
- The way forward
Participation
Economic affairs and planning ministers from five provinces took part. Gandaki and Sudurpashchim were not represented at council meeting. Dr. Bhim Bahadur Khatri, Vice-Chair of the Karnali Provincial Planning Commission, and Chief Secretary Radhika Aryal also attended. Secretaries of the economic affairs ministries of six provinces participated, with the exception of Sudurpashchim’s Secretary, Balraj Rijal.
Key Themes of the 19-Point Common Commitment
Common demands to the federal government
- Constitutional guarantee of fiscal equalization grants, ending cuts justified by a “revenue shortfall”
- Reduce conditional grants, increase equalization grants, and end federal interference in small projects
- Review revenue and natural resource royalties, and increase the share of provinces and local levels in VAT and excise duty
- Transfer vehicle and traffic revenue and the authority over vehicle fitness testing centers to provinces
- Abolish duplicate structures, provide adequate budgets for transferred projects, and remove administrative and legal obstacles
- Police adjustment, enactment of the federal civil service act, and provincial approval over forest land use
- Simplify procedures for foreign aid and loans
- Revise the Finance Commission formula and update laws related to fiscal federalism
Inter-provincial cooperation
- Promote inter-provincial trade and investment and ensure sustainable use of shared resources
- Joint disaster management and a rapid response team
- Exchange good practices on pre-budget consultation, outcome-based budgeting and digital systems
Common internal priorities
- Cooperation with local levels, leaner provincial structures and budget discipline
- Increase internal revenue, good governance and transparent service delivery
- A united provincial voice to counter misconceptions about federalism
Other Decisions
- Strengthen dialogue, advocacy and coordination with the federal government and local levels to effectively address provinces’ economic powers.
- Koshi Province’s economic affairs ministry will present, at the next meeting, the achievements made since provinces were established.
- The Council’s chairmanship will pass to Koshi Province, which will host the next meeting.
Signatories
· Tek Raj Pachhai (Karnali),
· Bidur Kumar Lingthep (Koshi),
· Yuvraj Bhattarai (Madhesh),
· Saral Sahayatri Paudel (Bagmati) and
· Indrajit Tharu (Lumbini).
