By Shashidhar Parajuli, Biratnagar, Oct. 15: The Chief Ministers of the provinces have made a joint commitment to comprehensive economic partnership, placing the country’s economic development, interprovincial connectivity and strengthening of fiscal federalism at the forefront of their priorities.
The ‘Inter-Provincial Chief Ministers’ Conference 2026’, that opened in Biratnagar, Koshi Province on Tuesday concluded with the joint issuance of the ‘Koshi Declaration 2026’ on Wednesday.
Signed by the chief ministers of all seven provinces, the declaration focuses on economic and infrastructure development and the securing of provincial rights.
Taking into account the comparative advantages, economic potential and market expansion opportunities of the provinces, the conference decided to expand interprovincial roads, agricultural corridors, and production, storage, packaging, branding and industrial market networks.
The declaration states that feasibility studies will be undertaken, in collaboration with all three tiers of government and the private sector, to establish direct air links between provinces along strategic routes such as Biratnagar-Pokhara, Surkhet-Bhairahawa, Pokhara-Surkhet, Janakpur-Pokhara and Bhairahawa-Dhangadhi. It also calls for the expansion of extensive tourism circuits.
To accelerate economic activity, the conference has urged the federal government to introduce the necessary legal and institutional arrangements to allow provincial authorities to approve large investment projects worth more than Rs. 6 billion that fall within their exclusive jurisdiction.
For the practical implementation of fiscal federalism, the Chief Ministers jointly demanded that fiscal equalisation grants allocated on the recommendation of the National Natural Resources and Finance Commission should not be reduced midway or at the end of the financial year, and that the full amounts should be transferred to the provinces.
They also called for a reduction in the share of conditional grants and an increase in fiscal equalisation grants. The declaration urges the federal government not to allocate budgets for small-scale projects without prior consent of the provinces and to provide a lump-sum allocation for incomplete projects transferred from the federal government that have been left stranded due to a lack of funding.
The declaration further emphasises the need to review the royalty and revenue-sharing arrangements for hydropower, forests, mines and river-based materials. It also calls for fines collected for traffic rules violations to be deposited into provincial consolidated funds and for the elimination of double taxation and administrative hurdles in interprovincial trade.
Alongside economic issues, the conference called for the immediate passage of the Federal Civil Service Bill, currently under the purview the Federal Parliament, ensuring that the constitutional powers and concerns of the provinces are addressed.
To resolve staff shortages and uncertainty surrounding career progression in provincial and local governments, the conference called for legal provisions placing positions such as provincial chief secretaries, ministry secretaries and chief administrative officers of local governments under the authority of the respective provinces.
Similarly, the conference demanded immediate enactment of the necessary federal legislation to implement provisions relating to provincial police administration and law and order, which fall under the provinces’ exclusive powers as listed in Schedule 6 of the Constitution.
It called for immediate transfer of police personnel, organisational structures, weapons, equipment, resources and other necessary personnel and assets to the provinces as part of the police adjustment process.
The conference also urged the revision of the unbundling of functions to eliminate overlapping responsibilities. In addition, it called for the immediate transfer to provincial or local governments of assets, including offices, buildings and land, belonging to federal offices that perform provincial-level functions.
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