Fiscal Council meeting stresses to implement fiscal federalism

The 8th meeting of the Inter-government Fiscal Council has pointed out the need for coordination and collaboration among three tiers of the government for effectively implementing fiscal federalism.

The meeting held at the Finance Ministry on Friday concluded that there was no coordination among the three tiers regarding planning, budget allocation, implementation, public spending, and revenue collection.

The meeting decided to run projects avoiding duplication among the governments, further, consolidate the tax collection system, clarify duplication in taxation, and formulate laws based on fiscal federalism.

Also, the meeting decided to adopt optimum management and utilization of resources received, avoid creating burden without prior determining sources and set priorities while formulating the plan.

On the occasion, Finance Minister Dr. Prakash Sharan Mahat said projects should be selected only after assuring sources. All three tiers of government should be equally responsible for the implementation of fiscal federalism, he added.

"There is a problem in the lack of a law on some matters. Even implementation has flaws. We have also created some problems", Dr. Mahat noted.

The Council headed by Finance Minster comprises the Province's Economic Affairs and Planning Minister, the Chairperson of the Natural Resource and Fiscal Commission, the National Planning Commission Vice-Chair, and the Chief Minister as members.

"There is a myriad of problems in the economy. But we do not have choices. One alternative is to ruthlessly axe recurrent expenditure", Dr. Mahat mentioned.

He also urged the provincial governments to carry out works being based on available resources by not procuring new goods.

One of the key problems now is the immoderately low development budget at all three tiers. "Capital spending is quite low in all three tiers of government. It needs prioritization of spending for its increment", he noted.

The Finance Minister further said, "Projects without fixed sources would not yield results in concrete and subsequently put the people in frustration. It also raises the question on our credibility", Dr. Mahat viewed.

The Finance Minister also admitted inefficiency in budgetary allocations and called for the need for reforms in this regard.

"We should not keep on the traditional style of scattering budget everywhere. I will put my all-out efforts to check this trend. We will emphasize the prioritized projects assured with sources". ---