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The election of March 5 stands as a transformative milestone in Nepal’s democratic evolution, effectively dismantling the long-standing narrative that the Constitution of Nepal 2015 created insurmountable structural barriers to a single-party mandate. For years, the prevailing wisdom among political analysts suggested that the country’s mixed electoral framework, with its heavy emphasis on proportional representation, rendered a decisive majority nearly impossible for any nascent political force. 

However, the Rastriya Swatantra Party (RSP) defied these theoretical constraints by securing an unprecedented number of parliamentary seats and over 5m proportional votes. This massive electoral ‘signature’ served as a powerful public referendum on the leadership of Rabi Lamichhane, functioning as a popular exoneration while he remained in legal custody facing allegations of cooperative finance fraud. This outcome suggests that a significant portion of the electorate viewed these judicial proceedings as politically motivated rather than purely legal, signaling a profound shift in the national psyche toward a collective aspiration for prosperity that transcends traditional partisan arithmetic.

By positioning itself as a disruptor of systemic corruption and administrative lethargy, the RSP has demonstrated that a platform centered on institutional integrity can overcome the perceived limitations of a fragmented multiparty system. Yet, this victory brings with it a complex set of challenges, particularly regarding the intersection of judicial process and political will. 

While the RSP successfully harnessed public frustration to secure power, it must now perform the difficult task of translating populist momentum into stable, rule-of-law-based governance. To satisfy the expectations of a diverse citizenry without further polarizing the nation’s legal and political institutions, the party must convert its immense political capital into a coherent and functional fiscal pathway. The mandate is rooted in a fundamental public trust that the RSP can modernize the economy and restore ethical purity to state institutions; a goal that necessitates a radical departure from a status quo-ist fiscal policy.

A central pillar of this reform agenda involves a comprehensive overhaul of Nepal’s Public Financial Management (PFM) to address deep-seated structural imbalances that have long stunted national economic development and growth. According to data from the Nepal Rastra Bank, the national GDP at current prices has reached Rs 6,107.2bn, but the composition of this figure reveals a concerning reality: the service sector dominates at 62.01 percent, while agriculture and industry contribute a mere 25.16 percent and 12.82 percent, respectively. 

This heavy reliance on services has failed to generate sufficient high-quality employment or significant value-added economic growth, placing immense pressure on the incoming RSP government to pivot toward aggressive industrial expansion. Strengthening the industrial sector is not merely a fiscal preference but a structural necessity for fostering meaningful job creation, setting up an export-oriented economy and achieving long-term, sustainable economic stability.

The existing national revenue architecture, though diverse, remains increasingly strained by its reliance on a complex but inefficient portfolio of instruments, including income taxes, VAT, and specialized levies for health and education. Even as the Inland Revenue Department reports a steady upward trajectory in total revenue from Rs 429.3bn in 2020-21 to Rs 583.82bn in 2024-25, these nominal gains mask significant underlying vulnerabilities. 

Most especially, the Department of Customs highlights a precarious imbalance where import-related revenue reached Rs 478bn in the latest fiscal year, dwarfing export-related revenue of only Rs 277bn. This datapoint underscores a disproportionate and risky dependence on trade-based public revenue, which leaves the national budget highly susceptible to global market fluctuations and external shocks.

Despite rising revenue figures, the Ministry of Finance continues to face formidable challenges in meeting its fiscal targets due to systemic weaknesses within its primary institutions. These institutional bottlenecks include a chronic deficit of skilled human capital, substandard technological infrastructure, and the persistent threat of moral hazard within the PFM administration. Such vulnerabilities ensure that the modernization of PFM entities remains a critical but largely unfulfilled mandate. 

Without addressing these fundamental administrative flaws and diversifying the tax base away from volatile import duties, the government will likely continue to struggle with fiscal shortfalls. Consequently, the RSP must lead a comprehensive PFM reform that simplifies tax structures while broadening the base across all levels of the federal polity, ensuring that the modernization of PFM entities move from a theoretical goal to an operational reality.

Furthermore, a decade into the federal transition, the promise of genuine fiscal federalism remains in a state of perilous limbo. At the subnational government level, revenue mobilization is severely hampered by operational hurdles and an inefficient bureaucracy that prevents provincial and local governments from exercising their constitutional fiscal autonomy. Revitalizing subnational governance is a vital priority and without enhancing the efficacy of the subnational polity, the federal system can neither collect nor strategically mobilize the resources required to address the urgent needs of its citizenry. 

Establishing transparency in budgeting, auditing, and fiscal reporting is essential to fostering public trust and enhancing the scientific application of federal transfers. Additionally, the government must adopt strategic debt management, strictly limiting sovereign borrowing to productive, high-yield investments to close the financing gap for high-priority projects without jeopardizing long-term solvency.

The budget (for the fiscal year 2026-27) of the RSP must also prioritize inclusive microeconomic integration to uplift rural and marginalized communities who have placed their faith in the RSP. The objective is to move beyond mere subsistence, fostering an environment where marginalized populations are integrated into national economic value chains by stimulating local entrepreneurship and increasing productive capacity. This requires a dual-track approach to youth engagement and industrialization that balances short-term job creation with long-term structural transformation. Rather than maintaining a narrow focus on traditional microfinance, which often leads to high-interest debt cycles without capital growth, the budget should emphasize comprehensive rural finance programs designed to facilitate capital formation and technical scaling. 

By providing affordable, long-term credit and strengthening SME financing policies, the RSP can ensure that capital is directed toward productive investments rather than just consumption, making the youth stakeholders in a decentralized, inclusive economy.

To catalyze this broader transformation, the RSP must prioritize a strategic pivot toward energy and infrastructure, investing in new generation projects to lower electricity costs and modernizing the grid to support industrial demand. Rather than exporting raw energy at a discount, the goal must be the cultivation of an energy-intensive domestic economy at every river basin level supported by robust logistics hubs. Parallel to this, the ICT sector offers immense potential for economic diversification. By spearheading a digital economy initiative and providing tax incentives for startups, the state can leverage domestic energy to fuel technology services. A national digital training program for youth, coupled with the full digitization of government business, would absorb the trained labor force and reduce administrative costs, mirroring successful models of youth mobilization seen in advanced economies.

Ultimately, the RSP’s success will be measured by its ability to drive agrarian transformation and industrial revitalization. The budget must emphasize ‘smart farming’, integrated agro-processing, and robust rural infrastructure to minimize post-harvest losses. Simultaneously, the strategic revival of distressed or ‘sick’ industries such as jute, rubber, paper, and textiles; offers a ‘triple benefit’ of employment generation, import substitution, and enhanced national competitiveness. 

By modernizing social services through digital classrooms and Science, Technology, Engineering, and Mathematics (STEM) curricula, the RSP can ensure long-term human development and capability lead to function. Shifting national priorities away from a reliance on remittances and toward high-growth sectors like tourism and sustainable farming will build a truly inclusive macroeconomic framework. These reforms serve as a tangible reward for the mandate granted by the citizenry, translating the political support for leaders like Rabi Lamichhane and Balendra Shah into a resilient, self-sufficient national economy that finally fulfills the public trust. 

Balendra Shah (Balen) has been elected as the Parliamentary Party leader of the Rastriya Swatantra Party.

Spokesperson Manish Jha said that the Central Committee meeting held today unanimously passed the proposal of party President Rabi Lamichhane to appoint Shah as the Parliamentary Party leader.

Shah is set to become the Prime Minister from the Rastriya Swatantra Party (RSP), which is going to form a single government after winning 182 seats in the House of Representative elections held on March 5.

He is scheduled to take the oath of office and secrecy at 12: 34 pm on Friday. 

Newly elected members of the House of Representatives took the oath of office and secrecy at the newly constructed multi-purpose hall in Singha Durbar on Thursday.

Senior member of Parliament Arjun Narsingh KC administered the oath to the newly elected lawmakers.

Rastriya Swatantra Party President Rabi Lamichhane also attended the swearing-in ceremony.

President Ram Chandra Paudel had administered the oath of office and secrecy to KC on Wednesday. 

Arrangements related to taking oath of office and secrecy are specified in the Article 99 and 91 (5) of the Nepal Constitution, and the Clause 75 of the House of Representatives Member Election Act, 2074. 

In the election of members of the House of Representatives held on March 5, the Rastriya Swatantra Party came first with 182 seats while the Nepali Congress stood second with 38, the CPN-UML won 25 seats, the Nepali Communist Party 17, the Shram Sanskriti Party seven, and the Rastriya Prajatantra Party won five seats.

An investigation panel formed to examine the September 8-9 protests has recommended that then-Prime Minister KP Sharma Oli, Home Minister Ramesh Lekhak, and Nepal Police Chief Chandra Kishwor Khapung be held accountable for the deaths of protesters, most of whom were college students. The Sushila Karki-led government has decided to make the report public after parts of it were leaked to the media. 

The Karki-led government had formed a panel headed by Gauri Bahadur Karki, which submitted its report last week. The onus now lies on the new government, led by Balendra Shah, to implement the report’s recommendations.

The panel has recommended investigating the officials under Section 181 of the Muluki Criminal Code, 2018. This section states that “no one shall cause the death of another through negligent acts.” If a death occurs due to such negligence, the law provides for imprisonment ranging from three to ten years and a fine of NPR 30,000 to NPR 100,000. Additionally, the commission has recommended taking action against dozens of government officials for failing to fulfill their duties.

According to the report, despite being informed about the growing security threats, the Prime Minister did not take timely initiatives to prevent casualties. The panel noted that if military and police coordination had been effective, the number of deaths and injuries could have been significantly reduced. 

The report emphasizes that Nepal, while having a parliamentary system, operates effectively as a Prime Ministerial system. Even when gunfire continued for nearly four hours around the Parliament building, resulting in several deaths and hundreds of injuries, it was the Prime Minister’s responsibility—as head of government—to ensure the protection of all citizens. The failure of responsible officials to act, and the Prime Minister’s inability to prevent further loss of life, represents a major institutional weakness, according to the report.

The commission also raised questions about the role of the Nepal Army during the protests. While army personnel were deployed at key locations such as Singha Durbar and Sheetal Niwas, the report notes that the army did not appear to carry out its duty to protect these sensitive sites. Commanders stationed at Singha Durbar, the Presidential residence (Sheetal Niwas), the Federal Parliament building in Baneshwor, and the Prime Minister’s residence in Baluwatar reportedly failed to fulfill their responsibilities.

It was also revealed that Nepal Army Chief Ashok Raj Sigdel pressured Prime Minister Oli to resign on the morning of September 9. In his statement to the commission, the Army Chief said he had informed the Prime Minister that the army was fully prepared to manage the situation following the resignation.

The report highlights systemic lapses in intelligence gathering, inter-agency coordination, and preventive measures, warning that future incidents could escalate without reforms in political and security leadership. It points out that security agencies had insufficient information regarding the preparations made by protest organizers.

 The National Investigation Department, tasked with intelligence collection, failed to gather adequate information. Similarly, coordination among the Nepal Police, Armed Police Force, and Nepal Army was found to be lacking.

To strengthen Nepal’s security apparatus, the commission has recommended conducting coordinated training programs with the security agencies of India and China. “To enhance the effectiveness of security agencies, diplomatic efforts should be made to conduct coordinated training programs with the security agencies of the two neighboring countries, India and China,” the report states.

The commission also highlighted the role of online platforms, particularly Discord, in organizing the protests. Groups such as “Youth Against Corruption” and “Yuva Hub” facilitated coordination, decision-making, and political endorsements, including the virtual selection of Sushila Karki as Prime Minister. While the District Administration Office prepared security plans for peaceful rallies, messages promoting violence and Molotov cocktails circulated freely online, largely unchecked by security agencies.

In his testimony, Pushpa Kamal Dahal, chairman of the Nepali Communist Party, suggested the possibility of both internal and external infiltration in the protests. Similarly, Rabi Lamichhane, chairman of the Rastriya Swatantra Party, stated that he was forcibly removed from jail against his will and clarified that his party was not involved in the September 8-9 protests. Kathmandu Metropolitan City Mayor Balendra Shah, who is poised to become Prime Minister, emphasized that he supported the peaceful rallies but was not directly involved in the protests.