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Council of Provincial Finance Ministers Meets in Kathmandu to Advance Hetauda Declaration

The Council of Provincial Finance Ministers (CPFMs) held a landmark meeting in Kathmandu on 26 November, the first gathering since the signing of the Hetauda Declaration on 1 November in Hetauda. The meeting was facilitated by Mr. Khim Lal Devkota, Chair of the Federalism and Localization Center (FLC). 

Endorsement of Hetauda Declaration and New Procedures

The meeting marked an important step toward the implementation of the Hetauda Declaration and the institutionalization of interprovincial coordination in fiscal federalism.

The Council:

  • Formally endorsed the Hetauda Declaration, reaffirming the collective commitment of provincial governments to strengthen fiscal federalism in Nepal; and
  • Approved the “Procedures for the Operation of the Provincial Economic Affairs Council, 2082”, creating a formal mechanism for regular consultation, coordination, and joint action among provincial finance ministers.

During the discussions, the ministers underlined the need for shared understanding, unified positions, and concerted efforts to advance common provincial interests and to negotiate their constitutional and fiscal rights more effectively at the federal level.

Leadership and Rotation of the Council

In line with the newly approved Procedures, the Council selected Hon. Mr. Prabhat Tamang, Minister for Finance and Economic Affairs of Bagmati Province, as the first Chair of the Council of Provincial Finance Ministers.

According to the approved Procedures:

  • The chairmanship will rotate every six months, following the alphabetical order of provinces, ensuring shared leadership and equal ownership.
  • The Council may meet as often as needed, but must convene at least twice a year.
  • The Finance Secretary of the chairing province will serve as the Council Secretary during that term.
  • The meeting registrar and administrative responsibilities will also transfer automatically to the next province when the chair rotates.

This rotational model ensures fairness, continuity, and equal participation among all seven provinces.

 

FLC’s Role and Significance for Fiscal Federalism

The Federalism and Localization Center has played a catalytic role throughout this process. At the Hetauda event, Mr. Khim Lal Devkota presented a concept paper and facilitated the dialogues that led to the Hetauda Declaration. FLC has since continued to provide technical support, policy facilitation, and evidence-based inputs to the CPFMs.

In the history of Nepal’s fiscal federalism, the establishment and operationalization of the Council of Provincial Finance Ministers represents a landmark achievement:

  • It is the first time all provincial finance ministers have come together under a structured, standing mechanism;
  • It creates a platform for collective policy dialogue, coordination, and negotiation;
  • It strengthens the voice of provinces in shaping intergovernmental fiscal relations and broader federal reforms.

 

FLC Executive Director Mr. Prakash Pantha, Program Director Mr. Prahlad Lamichhane, and Research Director Mr. Mohd Ayub were also present and actively engaged in both the first Council meeting and the Hetauda Declaration program. FLC remains committed to supporting the Council and contributing to a more coherent, equitable, and effective federal fiscal system in Nepal.

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