Promises and perils of fiscal federalism

It is time to reorient our fiscal architect to bring economic wellbeing to citizens.

Fiscal federalism aims to boost the economic empowerment and financial wellbeing of people by strengthening the fiscal capacities of all tiers of government. It is not just about the distribution of spending, taxing and borrowing powers among different tiers of government but also about sharing the responsibility of producing equitable economic fruits across the country. Unfortunately, in Nepal, this underlying premise and the core constructs of fiscal federalism have not been fully respected, if not neglected.