Federalism & Localization Centre

Dialogue Details

Dialogue on A One-Day Interactive Workshop on Fiscal Federalism Reform and Future Course of Action

November 1, 2025

The Ministry of Economic Affairs and Planning, Bagmati Province, in collaboration with the Federalism and Localization Centre (FLC), organized a one-day interactive workshop on Reform in Fiscal Federalism and Future Course of Action in Hetauda on November 1, 2025. The event aimed to bring together finance ministers and finance secretaries from all seven provinces to deliberate on key fiscal challenges facing provincial governments.

Although unfavorable weather conditions prevented a few dignitaries from attending, representatives from most provinces were present. The workshop was graced by the Hon. Indra Bahadur Baniya, Chief Minister of Bagmati Province as the Chief Guest, Hon. Prabhat Kumar Tamang, Hon. Ram Bahadur Magar and Hon. Dhanendra Karki, Ministers for Economic Affairs and Planning, Bagmati, Koshi and Lumbini Provinces, respectively. Also in attendance were provincial finance secretaries and senior officials from various provinces.

In his address, the Honorable Chief Minister underscored the importance of federalism in promoting development, good governance, and accountability. He emphasized the need for provincial budgets that prioritize income and employment generation and concluded by thanking Dr. Khim Lal Devkota, Chairperson of FLC, and his team for their valuable study on revenue mobilization.

Finance Secretaries from the provinces — including Mr. Sushil Bastola (Koshi), Mr. Ram Kumar Mahato (Madhesh), Mr. Dilli Ram Rijal, Mahashakha Pramukh (Gandaki), Mr. Narayan Prasad Paudel, Acting Finance Secretary (Lumbini), and Mr. Jhalak Ram Adhikari (Bagmati) — presented detailed papers outlining the fiscal status of their respective provinces. Their presentations covered budget formulation and implementation, revenue collection challenges, development expenditure trends, and intergovernmental coordination. Notably, they also highlighted ongoing programmatic initiatives aimed at addressing recent youth-led (Gen Z) movements.

The seven provincial finance ministers jointly issued a 25-point Hetauda Declaration and formed the Council of Provincial Finance Ministers (CPFMs) – a major step toward institutionalizing fiscal federalism and ensuring fiscal rights, coordination, and cooperation among all provinces. Hon. Pravat Tamang, Minister for Economic Affairs and Planning, Bagmati Province, presented the Declaration. This milestone marks a new chapter in strengthening Nepal’s federal system and intergovernmental fiscal relations.

On the occasion, a research report entitled Province Revenue Mobilisation (2025/26), prepared by the Federalism and Localization Centre, was jointly launched by the Chief Minister and other dignitaries. Likewise, Dr. Devkota presented a paper on the Implementation of Fiscal Federalism and the Way Forward, followed by insightful remarks from the Finance Ministers of Koshi and Lumbini Provinces, who stressed the importance of evidence-based policymaking.

Importantly, from the perspective of federalism, this event has been especially important as the general mood of the participants was more favorable towards federalism. It appears the GenZ movement has brought a renewed quest among the stakeholders at the provincial level who now seek the federal framework to work effectively.

In his closing remarks, Principal Secretary Mr. Bhupal Baral congratulated the organizers for facilitating the Hetauda Declaration and expressed his commitment to supporting its effective implementation.

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