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Government Unveils Third Public Financial Management Reform Strategy (2082–2087) — Focus on Fiscal Discipline, Transparency, and Efficient Resource Allocation

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NEPSE TRADING

Government Unveils Third Public Financial Management Reform Strategy (2082–2087) — Focus on Fiscal Discipline, Transparency, and Efficient Resource Allocation

Government Unveils Third Public Financial Management Reform Strategy (2082–2087) — Focus on Fiscal Discipline, Transparency, and Efficient Resource Allocation

The Government of Nepal has launched the Third National Public Financial Management (PFM) Reform Strategy (2082–2087 / 2025–2030) with the objectives of strengthening fiscal discipline, enhancing resource allocation efficiency, and improving public service delivery. The strategy aims to support the sustainability of Nepal’s federal governance system by building a transparent, accountable, and coordinated financial management framework.


First Comprehensive PFM Strategy in the Federal Context

This is Nepal’s first PFM reform strategy prepared after the implementation of federal governance. It seeks to guide the government in strategically allocating and utilizing financial resources to achieve national socio-economic goals.
The strategy emphasizes evidence-based budgeting, sustainable fiscal discipline, and a performance-based budget system focused on results and accountability.


Modernization of Revenue and Budget Systems

The strategy envisions the development of a modern, simplified, and transparent financial reporting and revenue collection system.
It also includes plans for a more efficient public procurement process, stronger project administration mechanisms, sustainable public debt management, and risk reduction in public finance.

Additionally, it focuses on improving intergovernmental coordination and developing automated fiscal transfer systems to ensure smooth financial operations among the federal, provincial, and local levels.


Transparency, Inclusiveness, and Citizen Participation

The new PFM strategy promotes participatory auditing to enhance citizen engagement in financial accountability.
It also integrates climate and gender priorities into financial frameworks, promoting inclusive and transparent governance that builds trust and accountability between citizens and the state.


ICT and Capacity Development at the Core

According to the strategy,

“This framework will guide improvements in fiscal policy, revenue mobilization, budgeting, expenditure control, debt and asset management, accounting, and auditing.”

The government has identified information technology (IT) systems and capacity development across all tiers of government as essential for sustainable reform.
Ultimately, the strategy seeks to institutionalize a strong, transparent, and coordinated public financial management system that reinforces good governance.


Aligned with Fiscal Federalism and the Constitution

The strategy has been designed to align with the constitutional principles of fiscal federalism, ensuring that revenue and expenditure responsibilities are well-defined among the federal, provincial, and local governments.
It also draws from the upcoming 61st Five-Year Plan (2025–2029), the Third Public Expenditure and Financial Accountability (PEFA) Assessment (2022), and key reports from institutions such as the Office of the Auditor General, the Public Procurement Monitoring Office, the Commission for the Investigation of Abuse of Authority, and the National Natural Resources and Fiscal Commission.


Participatory Formulation — 700+ Stakeholders Involved

The strategy was developed through a participatory and inclusive process, involving more than 18 institutional consultations and 34 provincial and local-level sessions attended by over 700 decision-makers.
The National Association of Rural Municipalities in Nepal (NARMIN), the Municipal Association of Nepal, and various civil society organizations collaborated to ensure transparency and local ownership of the process.

The preparation was led by the Fiscal Federalism Coordination Division under the Ministry of Finance, with active involvement from national experts and financial governance specialists.

Nepal has been advancing public financial reforms since the 1990s to strengthen good governance, maintain fiscal discipline, and improve public service delivery.
After adopting the PEFA framework in 2005, the country institutionalized systematic evaluation and reform of public financial systems.
The first PFM Reform Strategy (2009–2014) and the second strategy (2016–2026) guided previous reform phases.
This third strategy (2082–2087 / 2025–2030) marks the beginning of the next decade of fiscal governance transformation.

The Third PFM Reform Strategy represents a significant milestone in Nepal’s journey toward good governance, fiscal discipline, and transparency.
It aims to improve every stage of public finance — from revenue mobilization to expenditure control and audit compliance, ensuring better coordination among all levels of government.

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