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In any democracy, the ultimate measure of progress is not the charisma of a leader but the strength of the institutions that guarantee freedom, accountability, and justice. History has repeatedly shown us that when democracies begin to worship individuals rather than nurture institutions, the system tilts dangerously toward authoritarianism. Conversely, where institutions are built to outlast personalities, democracy endures even amidst crises.

A strong framework of institutions—such as the Election Commission, the Supreme Court, and Commission for Investigation of Abuse of Authority—should be nurtured to sustain and strengthen democracy. These bodies become the backbone of democratic functioning, which in turn nurtures smooth transitions of power and safeguards constitutional values. Whereas in countries where democracy slid into personality cults, rulers risk turning to ruler-for-life. By centralizing power around oneself and eroding institutions like the judiciary and civil services, the ruler hollows out the very foundations of governance. What follows is economic collapse, rampant corruption, and political instability. The lesson is clear: when institutions are weakened in favor of individuals, democracy becomes hostage to whims rather than laws.

Nepal’s recent political landscape offers a vivid illustration of this dynamic. Balendra Shah—popularly known as Balen—first captured the nation’s imagination when he stood as an independent candidate for Kathmandu Mayor in the 2022 local elections, becoming the first independent candidate ever elected to the position. His victory set off a wave of enthusiasm, particularly on social media, where his profile grew rapidly into something resembling a movement.

As a mayor, Balen gained immense popularity. He rarely spoke to the public and avoided the media, choosing instead to communicate through social media, generating significant online engagement. The former rapper became an enigmatic figure. People wanted to know more about him, but he rarely revealed much about himself. He attempted to clear squatter settlements in Thapathali, used force against street vendors, and openly expressed frustration with the government’s failure to coordinate on waste management—going so far as to order rubbish dumped outside government offices. These actions drew criticism and backlash, but they also cemented his image as someone willing to act where others merely talked. His aura was, by most accounts, unmatched in recent Nepali political history.

That boldness extended beyond municipal governance. He frequently lambasted the major political parties, including the Congress, CPN (UML), the Maoists, and even the Rastriya Swatantra Party (RSP), and his voice came to embody the frustration of thousands of Nepalis who felt disillusioned with these parties. During the GenZ protests on Sept 8–9 against corruption, nepotism, the social media ban, and other governance failures in Nepal, he expressed support for the demonstrators. He also called former Prime Minister KP Sharma Oli a “terrorist” and demanded that he take responsibility for the deaths during the protests. 

On 28 Dec 2025, Shah formally unified with the RSP, resigning as Kathmandu mayor on 18 Jan 2026 to contest the 2026 general election as the party’s prime ministerial candidate. While RSP chair Rabi Lamichhane retained his formal title, Shah became the party’s dominant public face and the principal engine of its electoral momentum.

The results were staggering. Shah ran against four-time former Prime Minister Oli in the latter’s own stronghold—and won convincingly.  Shah secured 68,348 votes, the highest vote total ever recorded in Nepal’s parliamentary election history. This surpassed the previous record of 57,139 votes set by Oli himself in the same constituency in 2017. Oli received just 18,734 votes, leaving Shah with a winning margin of 49,614 votes. The symbolism was impossible to miss: the new Nepal, it seemed, had emphatically displaced the old.

RSP’s broader performance matched the scale of Shah’s individual triumph. With 12 candidates winning over 50,000 votes each, the party swept the election with a landslide victory, claiming close to a two-thirds majority—falling just two seats short. Balen and his party became a defining force within the very mainstream system he once so loudly criticized.

This victory arrives at a particularly delicate moment for Nepal. In the aftermath of the GenZ protests, the country stepped outside its constitutional framework, appointing a former chief justice as prime minister. It is now on the path back to constitutional order through fresh parliamentary elections. In that context, RSP and Balen represent both enormous opportunity and considerable challenge.

The opportunity is obvious: a party with a sweeping mandate and a charismatic leader who commands genuine popular trust. The challenge is subtler—and more dangerous. Posts are already circulating on social media that deify Shah in terms that should give any democrat pause. Owing to the coincidence of his birth date with Oli’s electoral rise in the early 90s, some have compared him to Lord Krishna, born to end the reign of the tyrant Kansa. It is a flattering myth, but myths of this kind carry real costs in a democracy. When leaders are elevated to quasi-divine status, the institutions meant to check them begin to seem like obstacles rather than safeguards.

Building robust institutions ensures continuity and accountability. Leaders may inspire, but institutions protect. Personality cults may offer temporary stability, but they weaken checks and balances. True democracy is not about deifying a figure—it is about ensuring that no one is above the constitution, and no one is indispensable to governance.

Balen faces a challenge: to meet the sky-high expectations of a people hungry for honest, effective governance. But the responsibility does not rest with him alone. The people who voted for him—and those watching from afar—must also resist the temptation of placing him on a pedestal he was never meant to occupy. He is a representative of the general public in a democratic country. Nothing more, and nothing less. He cannot be above his party. He cannot be above the constitution.

If Nepal—and democracies everywhere—wish to thrive, they must resist the temptation of idolizing individuals and instead invest in the institutions that will safeguard freedoms for generations. After all, it is institutions, not idols, that make democracies durable.

The swearing-in of Balendra Shah as Prime Minister marks a dramatic shift in Nepal’s political landscape, followed swiftly by bold actions from his administration. Within a day of assuming office, his government ordered the arrest of former Prime Minister KP Sharma Oli and former Home Minister Ramesh Lekhak, holding them accountable for the deaths of 19 youths during the September 8–9 protests, based on findings from an investigative panel.

These arrests triggered widespread backlash. The Communist Party of Nepal (Unified Marxist–Leninist) launched nationwide protests, while the Nepali Congress also raised objections, citing concerns over the lack of due process. Legal experts have similarly argued that proper legal procedures were not followed in the arrests of Oli and Lekhak.

At the same time, the government intensified its anti-corruption drive by initiating money laundering investigations against top political figures. This included the arrest of Dipak Khadka after a large amount of allegedly illegal cash was discovered at his residence during the Gen Z protests. According to local media reports, the Balen administration has also begun investigating the assets of former prime ministers, including Sher Bahadur Deuba.

Alongside these crackdowns, the Shah-led cabinet unveiled an ambitious “100 tasks in 100 days” reform agenda aimed at restructuring the bureaucracy and depoliticizing state institutions. The government has also pledged to establish a new commission to fully investigate the September 9 protests, addressing gaps left by earlier inquiries, and announced plans to form a powerful body to scrutinize the assets of public officials dating back to 1990. Other initiatives are focused on improving public service delivery.

Meanwhile, a rift has escalated within the Nepali Congress. A special general convention held in January reportedly removed Sher Bahadur Deuba from party leadership and elected Gagan Kumar Thapa as the new party head. In response, the Deuba faction filed a case challenging the legitimacy of the convention. Both factions have since been conducting parallel political activities, deepening the party’s internal crisis.

​​​​Former Home Minister Ramesh Lekhak was produced before the Kathmandu District Court on Sunday to extend his remand, a day after he was arrested in connection with the investigation into the Gen Z protests. 

He was first taken to the public prosecutor's office before being presented in the court. 

Lekhak and former Prime Minister and CPN-UML Chairman KP Sharma Oli were arrested while implementing the report of the inquiry commission formed to investigate the Gen Z unrest.

Following the arrest, Oli has been admitted to the Maharajgunj-based Tribhuvan University Teaching Hospital while Lelhak is in police custody.

The arrests were made shortly after a high-level meeting involving Prime Minister Balen Shah, Rastriya Swatantra Party President Rabi Lamichhane and Home Minister Sudan Gurung. 

Immediately after the meeting, Home Minister Susan Gurung directed Inspector General of Police Dan Bahadur Karki and Inspector General of Armed Police Force Raju Aryal to arrest Oli and Lekhak. 

At a moment when public trust hinges on economic credibility, Dr. Wagle, the Finance Minister must channel political capital into disciplined, second‑generation economic reforms that convert momentum into measurable prosperity.

Opportunities and Challenges

The appointment of Dr. Swarnim Wagle as Nepal’s Finance Minister represents a rare convergence of intellectual rigor and executive authority. For decades, Nepal has struggled to reconcile reformist aspirations with the inertia of governance. Now, with the Minister Dr. Wagle at the helm, the country stands at a curious juncture: the possibility of translating classy economic theory into disciplined statecraft. The Minister Dr Wagle transition from academic strategist and one of the architects of the Rastriya Swatantra Party’s electoral success to steward of the national treasury has generated profound expectations. The public anticipates not just rhetoric but a decisive break from stagnation, a moment when inclusive microeconomic development can finally be aligned with sustained macroeconomic growth. With the backing of a near two-thirds majority, the Minister Dr. Wagle faces the formidable challenge of converting political momentum into frameworks for industrialization, job creation, reliable connectivity development and technological advancement. If pursued with rigor, this era could propel Nepal beyond the Least Developed Country category, elevate per capita income toward USD 3,000, expand GDP to USD 100 billion, and generate over a million jobs with the RSP 1.0 era. The stakes are immense, and the opportunity historic.

The blossoming tenure of Minister Dr. Wagle reflects a commendable reformist zeal, signaled by the swift repeal of obsolete legislation. However, for this momentum to transcend mere symbolism, it must be anchored in rigorous, data-driven diagnostics. Rushing to dismantle or overhaul administrative arms, such as revenue research agency, without a prior longitudinal evaluation of their functional efficacy risks replicating the institutional failures of previous time. Authentic economic statecraft demands that Nepal move beyond the anecdotal, narrative-heavy advisory reports that have historically dominated the policy landscape. Instead, the Minister Dr Wagle must prioritize a comprehensive assessment of three decades of liberal economic policy and a decade of federalism to provide a legitimate evidentiary foundation for second-generation reforms.

This systemic modernization must extend to the Ministry’s allied agencies including Customs, the Internal Revenue Department, SEBON, Auditor General, Financial Comptroller and the Nepal Rastra Bank, etc., whose rigid, transactional modalities have devolved into bureaucratic bottlenecks, operation barriers and popularized as rent-seeking hubs. Such institutional stagnation has precipitated a stark deindustrialization; as the service sector expands to 62%, the industrial and agricultural sectors continue to contract, with industrial capacity languishing at 44.5%. This structural misalignment is mirrored in a consumption-heavy budgetary framework where recurrent expenditures consistently consume nearly two-thirds of national resources, leaving a disproportionately small fraction for capital formation.

The persistent fiscal crisis is further exacerbated by extreme expenditure seasonality, where 35% of the annual budget is often exhausted in the final month (Ashad), yielding substandard infrastructure and inflated logistical overheads. In the 2081/82 BS period, federal outlays of NRs1.523 trillion significantly outpaced an aggregate revenue of NRs 1.178 trillion, with capital investment restricted to a meager 14.6%. Breaking this cycle of stagnation requires a Herculean overhaul of public revenue governance and a strategic pivot toward merit-based resource allocation. By enhancing banking efficiency and reducing lending costs for micro-enterprises, the government can finally nurture a competitive domestic industrial base, transitioning the nation from an import-dependent economy to one characterized by sustainable, internally driven growth.

Harnessing Endowments, Leveraging Technology

Second-generation reforms must rest on the principle that sustainable GDP growth is inseparable from the quality of human capital. Investments in education, healthcare, connectivity, domestic tourism, agriculture, and public security are essential to broadening the middle class while institutionalizing a safety net for the disenfranchised. Externally, mobilizing diaspora capital through streamlined conduits and project-specific banks tailored for Non-Resident Nepali investment will be critical. Restoring private-sector confidence after recent political unrest requires legislative protections and treasury policies that prioritize investment security. Yet the state must avoid pampering private actors into dependency on subsidies and incentives. By fast-tracking national pride projects such as the Budhigandaki Hydropower, roads network and the Naumure Multipurpose Project of Dang, using modern resource mapping and input-output analysis, the Minister Dr. Wagle can move beyond the uninspired methodologies of the past. The Minister Dr Wagle’s success will depend on remaining focused on high-value targets that can finally deliver Nepal’s long-awaited developmental horizon.

Second Generation Economic Reform policy must be rooted in Nepal’s unique endowments, strategically aligning comparative advantages with the linking to the power of knowledge and technology. Integrated towns/cities that connects people and places, infrastructure that fosters dense networks of trade, commerce, and identification of high-impact sectors capable of immediate import substitution are essential. Central to this shift is an energy policy that pivots from exporting raw electricity to high-value domestic end use energy. By leveraging river basins for niche agriculture, tourism and prioritizing energy-intensive industries such as data centers, crypto-mining, manufacturing and processing hubs, Nepal can transition toward a climate-resilient economy. This transformation, however, depends entirely on efficient, transparent, and predictable governance within the government. Delivering on the RSP’s electoral manifesto requires ruthless commitment to overhauling public service delivery, ensuring safety nets and public goods and services are reliable. The public expects the RSP to remain untainted by corruption, and this demands rigorous internal orientation, continuous knowledge development, and a strategic distance from excessive foreign entanglement. Leaders must remain embedded within their constituencies, maintaining transparent communication with the people who granted them their mandate.

Test of Execution

Ultimately, the success of the Minister Dr Wagle will not be measured by rhetoric but by the tangible expansion of the middle class and the clinical execution of national mega-projects. As a leading development economist, the Minister Dr. Wagle must act as a hunter of structural economic reform rather than a passenger in a stalled bureaucratic carriage. To rely on narrative driven recommendations of the past(Report from the High Level Economic Advisory Committee) would be to squander this historic moment. The path to a USD 3,000 per capita income and a USD 100 billion GDP requires ruthless commitment to data-driven policy, institutional integrity, effective governance and a social contract that finally delivers prosperity for every Nepali citizen.Nepal has waited decades for this alignment of intellectual vision and political authority. The question now is whether the Minister Dr. Wagle can seize the moment, discipline the machinery of governance, and deliver the impactful change that the present demands. If the Minister Wagle succeeds, this will not simply be a chapter in Nepal’s economic story; it will be the beginning of a new era. – The end-

Ayush R. Arjyal holds a Master’s degree in Economics, specializing in public economic planning and fiscal federalism. He is affiliated with Baya Himalaya, a Kathmandu-based policy research and development firm. The views expressed are solely authors.