JANAKPURDHAM: The provincial governments of Madhesh and Koshi have signed an agreement to collaborate on public financial management, revenue growth, employment generation, and entrepreneurship.

The memorandum of understanding was signed on Friday by Madhesh Province Finance Minister Yubaraj Bhattarai and Koshi Province Minister for Economic Affairs and Planning Bidur Kumar Linthep.

Under the agreement, both provinces will exchange best practices regarding budget formulation, financial federalism, and the settlement of arrears. Minister Bhattarai stated that the agreement aims to implement the constitutional principles of cooperation, coexistence, and coordination between provinces.

The two provinces have agreed to conduct pre-budget consultations and joint workshops at least three months before presenting their annual policies and budgets. A joint inter-provincial coordination committee will be established to monitor progress, and high-level ministerial conferences will be held on a rotational basis.

Collaborative efforts will also extend to strengthening local revenue administration, adopting digital financial systems, and enhancing staff capacity through joint training. Additionally, the provinces plan to develop joint infrastructure for religious and tourism purposes, with a framework to be created for revenue sharing.

Disaster management, youth employment, and the promotion of private sector investment are also key focus areas. To implement the agreement, a high-level steering committee led by the ministers will be formed, supported by a technical committee led by the respective secretaries.

Expenses for joint workshops, training, and research will be shared equally between the two provinces. The agreement, which draws guidance from the joint commitment made by provincial finance ministers in Hetauda on Nov. 1, 2025, will remain in effect for five years from the date of signing.