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Two weeks have passed since Balendra Shah became a powerful prime minister in Nepal’s recent political history. His rise to power follows the landslide victory of the Rastriya Swatantra Party (RSP) in the March 5 elections. His swearing-in marked a major generational shift in Nepal’s power politics, as the political parties and leaders who had long dominated national politics were sidelined.

The new and strong government under Balen has signaled an assertive and unconventional governing style. Marked by a strong anti-corruption stance and institutional interventions, the administration appears intent on reshaping political norms. However, questions remain about its economic priorities, particularly its limited response to rising energy costs and inflation. Here is a preliminary analysis of Balen’s two weeks in office.

Implementation of probe panel

On the very first day in office, the Balen administration promptly decided to implement the report submitted by a probe panel formed to investigate the violence and killings that occurred on Sept 8–9 last year. The next day, former Prime Minister KP Sharma Oli and former Home Minister Ramesh Lekhak were arrested, sending a strong political message.

The arrests drew criticism on the grounds that due process was not followed, as they were carried out during odd hours and on a holiday. In response, the Communist Party of Nepal (Unified Marxist–Leninist) launched street protests, while the position of the Nepali Congress remained unclear and ambiguous.

Although both leaders were later released by the court, the move underscored the government’s willingness to challenge powerful figures. Despite their release following a Supreme Court order, police have continued investigations against them and plan to file cases in court.

Similarly, the government briefly arrested the then Chief District Officer of Kathmandu, but he was immediately released following pressure from the bureaucracy. The commission has also recommended action against high-profile individuals from the bureaucracy, Nepali Army, and Nepal Police. The government has decided to conduct further studies before taking action against individuals from these agencies.

Improving governance service delivery

Governance reform remains the top priority of the Balen-led administration. Shah has instructed government secretaries to avoid delays and expedite their work. In a strong message, he reportedly told government staff to either perform or step down.

At the same time, he has instructed that government services should not be interrupted even during lunchtime, with appropriate staff management. The administration has also begun dismantling entrenched bureaucratic practices, notably by removing intermediaries from land and transport offices—sectors long criticized for inefficiency and corruption.

On the governance front, the cabinet has moved to streamline the state apparatus by reducing the number of ministries from 24 to 17. The government has also taken proactive steps to deploy bureaucrats at the local level in an effort to improve service delivery. It is closely monitoring key government offices responsible for providing prompt services to citizens.

However, under the current federal structure, the federal prime minister cannot dictate the functioning of provincial and local governments. Some chief ministers and local government leaders have already objected to the instructions of Prime Minister Shah.

Corruption control

The Balen-led government has prioritized tackling money laundering and corruption. As Nepal faces pressure to take tangible steps to be removed from the Financial Action Task Force gray list, the new government has initiated investigations into money laundering cases.

Authorities have arrested a notorious middleman, Deepak Bhatta, on money laundering charges. Similarly, Nepal Police has issued an arrest warrant against former Prime Minister Sher Bahadur Deuba and his family members in connection with such cases. Police have also arrested former minister Deepak Bhatta on similar charges.

The government has emphasized corruption control. The first cabinet meeting decided to establish a commission to investigate the wealth of public officials dating back to the 1990s. In the first phase, the cabinet formed a commission to investigate the properties of public service holders from 2006 to 2026. 

While the government cannot interfere with the functioning of the Commission for the Investigation of Abuse of Authority, an autonomous constitutional body, it is coordinating with the CIAA to expedite corruption investigations. At the same time, the arrest of some businessmen has created fear in the private sector, and it is feared that it could spoil the investment climate.

Constitutional amendment

The Balen-led administration has placed strong emphasis on constitutional amendment, a key pledge made by the RSP during the election campaign. Balen Shah has formed a committee led by his political advisor, Ashim Shah, to work with political parties to prepare a base document for nationwide deliberations on constitutional amendments.

However, major political parties have not fully cooperated with the government. The Nepali Congress, for instance, has yet to send its representative to the task force. Although constitutional amendment remains a common priority among political parties, there are significant differences regarding its content.

Despite the government’s efforts, progress on constitutional amendment is unlikely in the near future due to the lack of cooperation from traditional political parties. However, the ruling RSP can initiate amendment proposals independently, as it holds a two-thirds majority in Parliament. Support from the Shram Sanskriti Party, led by Harka Sampang, is sufficient to pass amendments. Key issues include the form of governance and the electoral system.

Investigation into Sept 9 violence

Following the Sept 8–9 GenZ movement, a high-level commission led by Gauri Bahadur Karki was formed to investigate the violence. However, the Karki-led panel focused only on the events of Sept 8, drawing criticism from political parties and civil society for its selective approach.

To address this concern, the Balen-led government decided to form a separate commission to investigate the Sept 9 violence. On that day, protests targeted vital state institutions such as Singha Durbar, the Supreme Court, the President’s Office, and various business establishments. However, even after two weeks in office, the government has yet to form this commission.

Rare public speech by PM

After becoming prime minister, Balendra Shah has not delivered a public speech. It was expected that the prime minister would address the nation through television after assuming office, but he did not. Similarly, there is a tradition of the prime minister speaking in Parliament, which he has avoided.

There are reports that the prime minister addressed a function organized by the Nepali Army. He also briefly addressed the international community regarding the foreign policy priorities of the new government. Prime Minister Balen is under scrutiny for bypassing Parliament. In the past, political leaders used to engage with the media and address Parliament regularly. However, the prime minister is consulting with ministers and lawmakers.

Conflict of interest: a key priority

For traditional political parties, conflict of interest was not a priority issue. However, for the Balen-led cabinet, it is a serious concern. Rastriya Swatantra Party Chairperson Rabi Lamichhane has issued a strong warning to ministers and lawmakers not to appoint their family members and relatives to government offices or their secretariats.

Prime Minister Balendra Shah removed Minister for Labor, Employment and Social Security, Deepak Kumar Sah, for misusing his office to appoint family members. The minister was sacked just 13 days into office. In the past, politicians and ministers faced criticism for appointing their relatives to government positions.

Recovering the economy: A herculean task

Economic recovery remains a key challenge for the Balen-led administration. The Asian Development Bank has projected that economic growth will slow significantly to 2.7 percent in fiscal year 2026, amid prolonged political uncertainty following civil unrest in early September and the ongoing conflict in the Middle East.

While a stable government could contribute to economic growth, the Middle East conflict poses risks through higher oil prices, reduced tourist arrivals, and potential disruptions in remittance flows. If the conflict continues, it could also affect fertilizer supplies, thereby impacting agricultural output.

According to the ADB, agricultural growth is projected to slow from 3.3 percent in 2025 to 2.7 percent in 2026, as paddy output is expected to decline by 4.2 percent due to delayed monsoon rains and the Oct 2025 floods. The conflict in the Middle East may also negatively affect the tourism industry, including the spring mountain season.

No major departure in foreign policy

The Balen administration has signaled that there will be no major shift in foreign policy. While addressing the 9th Indian Ocean Conference, Foreign Minister Shisir Khanal stated that Nepal’s foreign policy remains firmly grounded in the UN Charter, the principles of Panchasheel, and non-alignment.

Two weeks after the formation of the government, Prime Minister Balen briefed the diplomatic community in Kathmandu about the administration’s priorities. The government has indicated that it will focus more on internal issues than foreign policy, emphasizing engagement with major powers primarily on economic terms. This approach may help Nepal avoid being drawn into great-power rivalries.

Prime Minister Balendra Shah has received an invitation from Indian Prime Minister Narendra Modi for a bilateral visit. Both sides have tentatively agreed to conduct the high-level visit after the necessary preparations.

In the 275-member House of Representatives (HoR), opposition parties together hold one-third of the seats (93). However, the opposition is highly fragmented and lacks cohesion. As a result, it is unlikely to play an effective role in holding the government accountable.

Moreover, many opposition leaders appear hesitant to take a strong critical stance against the government, reportedly due to fear of legal or corruption-related cases being brought against them. Even leaders of the Rastriya Swatantra Party (RSP), who could have played a more assertive opposition role, are also unlikely to do so effectively, as the party has been criticized for adopting a restrictive internal approach toward its own lawmakers. Consequently, one of Parliament’s key functions—scrutinizing and checking executive power—appears increasingly weakened.

The judiciary, which should serve as an independent check on executive authority, also faces structural and political constraints. First, the dominance of ruling parties in the Constitutional Council and Judicial Council, which are responsible for judicial appointments, raises concerns about institutional independence. Second, the political tensions and protests of September last year have reportedly created an atmosphere of fear, which may discourage bold or independent judicial decision-making.

The media, often referred to as the fourth estate, also plays a crucial role in ensuring accountability. However, the current condition of the media sector is weak. Financial pressures have made many media houses vulnerable, reducing their capacity for independent and critical reporting. In addition, there is growing concern that media organizations may hesitate to challenge the government due to fears of reprisal.

Recent government actions—such as restricting access and reducing revenue channels for private media houses—have further strained the sector. Furthermore, there has been no strong commitment from major political actors, including the RSP, to uphold press freedom, and relations between media institutions and political leadership appear increasingly tense. Civil society, which traditionally acts as an important watchdog, is also largely ineffective at present. Its fragmentation along political lines has significantly weakened its independence and public trust.

In the past, the international community—particularly democratic countries—played an active role in raising concerns over freedom of expression and press freedom, often issuing statements when governments took repressive actions against journalists. However, in recent years, this engagement has noticeably declined. The international community appears to have shifted toward a more cautious or accommodating stance toward governments, even in the face of media restrictions and attacks on journalists. The democratic countries no longer uphold those values in Nepal. Taken together, these developments suggest a worrying trend: Nepal appears to be moving toward a system with a strong executive but increasingly weak and constrained institutions of accountability, with limited effective opposition voices.

When Balendra Shah was sworn in as Nepal’s prime minister on March 27, the image was almost impossibly cinematic. A 36-year-old structural engineer and former rapper, standing where four-time prime ministers and Maoist commanders had stood before him, promising to do things differently. His Rastriya Swatantra Party had just won 182 of 275 parliamentary seats—something Nepal had not seen since 1959. The message from the Nepali public was unmistakable: we are done with the old order.

The RSP has since worked hard to project a single, coherent image—a technocratic, performance-driven government that has broken decisively with Nepal's culture of corruption and cronyism. The 100-point governance reform agenda, the youth-heavy cabinet, the swift sacking of a minister who appointed his own wife to a public board—all of it feeds a narrative of competence and accountability.

But beneath that united front, something more complicated is happening. The RSP is not one political project. It is three—held together, for now, by the shared euphoria of a landslide victory and the mutual convenience of power. And to understand why this matters, it helps to reach for a framework that political scientists have spent the last two decades developing: the study of populism itself.

The meaning of populism

Populism has become one of the most overused and misunderstood words in political commentary. Used loosely, it is little more than an insult—a way of calling a politician reckless or demagogic. But scholars define it more precisely, and their definitions are useful here.

The most influential academic framework, developed by political theorists Cas Mudde and Cristóbal Kaltwasser, describes populism as a ‘thin ideology’—a set of ideas that divides the world into two camps: a pure, virtuous ‘people’ and a corrupt ‘elite’. The populist leader claims to speak for the former against the latter. What makes populism ‘thin’ is that it can attach to almost any substantive political program. A left-wing party can be populist. So can a right-wing one. So can a technocrat. The ideology fills in the details; populism provides the structure.

Beyond this core definition, scholars have identified distinct varieties of populism that operate through different channels and appeal to different publics. Understanding Nepal's new government requires distinguishing between three of them—because Balen Shah, Rabi Lamichhane, and Sudan Gurung each embody one.

Balen Shah: The techno-populist

Political scientist Benjamin Moffitt, in his work on populism's global rise, identifies a variant he calls techno-populism—leaders who claim that the system's problem is not structural injustice but simple incompetence, and who position themselves as the capable outsider who can fix what the corrupt insiders broke. The appeal is neither left nor right. It is managerial. Think of it as: the people deserve better—and I know how to deliver it.

Balen Shah is the closest contemporary embodiment of this type in South Asia. A structural engineer by training, a rapper by creative instinct, he built his political reputation as Kathmandu's mayor by setting measurable targets for waste management and traffic, posting updates directly to 4m Facebook followers, and projecting an image of relentless competence unbendable to any party or patron. His 100-point governance agenda—with performance indicators for every ministry—is essentially techno-populism institutionalised.

His populism is also unusually broad in its geographic and ethnic reach. Unlike most Nepali politicians who build their base within a caste or regional bloc, he launched his national campaign from Janakpur, presenting himself as a ‘son of Madhes’, a symbolically charged move for a Kathmandu-born politician of Hill origin. He won support across communities—urban youth, women, diaspora Nepalis—in a way that consciously resists identity-based outbidding.

The risk embedded in this model is one that scholars have documented repeatedly. Moffitt and others note that techno-populist leaders, confident their mandate represents the direct will of the people, tend to grow impatient with the slow, contentious machinery of democratic institutions. Within weeks of taking office, Balen announced the abolition of party-affiliated trade unions in government bodies and the removal of political student unions from campuses, replacing them with non-partisan councils. Both are defended as anti-corruption reforms. 

Critics counter that dismantling workers’ organisations and depoliticising student life weakens the intermediary structures that democracies depend on—a familiar early warning sign in the literature on democratic backsliding.

Rabi Lamichhane: The performative populist

Lamichhane fits a different and older archetype in the scholarly literature—what Moffitt calls spectacle populism and what Latin American political scientists have analysed as the caudillo variant: the charismatic outsider who channels public fury through theatrical confrontation, making the exposure and punishment of the corrupt elite the central act of his politics.

Lamichhane built his career on precisely this. As a television host, he made a name for himself by cornering officials on camera. He founded the RSP in 2022 as a vehicle for anti-corruption outrage and won 21 seats on his first attempt. His style is combative, moralistic, and deeply personalised—politics as a crusade with him as its protagonist.

The profound irony, of course, is that Lamichhane arrived at power trailing active embezzlement charges, multiple stints in pre-trial custody, and a documented record of using an earlier stint as Home Minister to pursue journalists who criticised him. 

A leaked commission report on last September’s protest violence was conspicuously silent on episodes connected to his controversial prison break and the burning of media offices belonging to a publisher he had previously had arrested. As scholars of populism from Jan-Werner Müller to Nadia Urbinati have long observed, performative populism carries within it an authoritarian temptation: once the leader is the embodiment of the people’s will, scrutiny of the leader becomes, by definition, an attack on the people.

Lamichhane remains RSP chair and controls the party’s organisational machinery. He was widely expected to claim the Home Ministry—giving him oversight of Nepal’s police, intelligence services, and the very investigative institutions that might scrutinise his own legal exposure. In the event, the portfolio went to Sudan Gurung, reportedly over Lamichhane’s resistance. 

Sudan Gurung: The movement populist

Sudan Gurung belongs to a third scholarly category—what researchers of the Global South, from Ernesto Laclau onwards, have analysed as movement populism or mobilisation populism: leaders who emerge not from established parties or media platforms but from the streets, whose authority derives from their claimed role as the authentic voice of an uprising rather than any formal mandate.

Gurung rose to national prominence by distributing water to protesters in September 2025, before becoming a central negotiator in the crisis—reportedly engaging directly with the army leadership in the days leading to Sushila Karki’s appointment as interim prime minister. His biography is one of civic mobilisation: earthquake relief volunteer, pandemic aid organiser, youth NGO founder. His populism speaks in the language of sacrifice and solidarity rather than competence or outrage.

But his conduct since taking the Home Ministry—one of Nepal’s most powerful portfolios—has generated immediate concern. Within hours of taking oath, Gurung personally went to police headquarters and, according to reports, effectively pressured the inspector general to arrest former prime minister KP Sharma Oli that same night. 

The arrests may well be legally justified. But a senior commentator put the problem precisely in an op-ed: “The home minister himself releasing arrest warrants and posting updates on social media suggests political leadership stepping into police work.” This, the piece observed, risks casting doubt on the impartiality of investigations—and fits a pattern the scholar Mudde identifies as ‘democratic illiberalism’: popular legitimacy used to bypass institutional process.

Gurung’s own past contains unresolved ambiguities, newspapers have noted: questions about his proximity to the coordination of the September protests, his role in the violence that followed on the second day, and allegations about the opacity of relief funds managed through his NGO. None of these establishes wrongdoing. What they establish, as one commentator noted drily, are “ambiguities that have neither been publicly resolved nor institutionally interrogated before the conferral of one of the most sensitive offices in the state.”

Three populisms, one roof

These are not abstract typological differences. They translate directly into competing instincts on the most important governance questions Nepal now faces.

Accountability: Balen’s techno-populist agenda promises to investigate political figures going back to 1991. Lamichhane's legal exposure creates a structural incentive for the accountability drive to stop well short of RSP’s own leadership. The battle over the Home Ministry was the first visible expression of this tension—and it was resolved in Balen’s favor, for now, by installing Gurung rather than a Lamichhane loyalist. But Lamichhane retains the party chair and is not going anywhere.

Institutional process versus decisive action: Gurung’s movement-populist instincts—arrest warrants announced on Facebook, sleeping on a ministry sofa for public effect, personally dictating police operations—represent a governing style that deliberately prioritises visible decisiveness over procedural integrity. Balen’s agenda, by contrast, is built on systematic institutional reform. These two impulses, sharing a cabinet, will eventually collide.

The federalism question: The snap elections of March 2026 covered only the federal parliament; provincial assembly elections were deferred. For the Janajati and Madhesi communities whose political voice is most directly exercised at the provincial level, this is not a procedural footnote. It is an early signal about whether the RSP's promised ‘new Nepal’ actually includes the communities that Nepal's 2015 constitution was supposed to empower.

The paradox of the majority

Nepal’s previous governments were undone by coalition fragility. The RSP’s extraordinary majority was supposed to solve that. But here is the paradox: that majority removes the external pressure that might otherwise have forced internal coherence. When you must manage a five-party coalition, you are compelled to articulate shared ground in explicit terms. When you hold 66 percent of parliament yourself, you can defer internal contradictions indefinitely—until they detonate.

Three types of populism can, in theory, complement each other. A government that delivers results, holds corrupt elites accountable, and genuinely includes the previously marginalised would be a formidable and legitimate political force. But that outcome requires more than a seven-point power-sharing agreement and a 100-point to-do list. It requires a shared theory of the state—an agreed answer to who governs, for whom, through what institutions, and constrained by what rules.

That the RSP does not yet have. What the next twelve months reveal about whether Lamichhane’s cases are quietly buried, whether Gurung’s decisiveness respects institutional boundaries, and whether Balen’s reform agenda survives contact with his own party will tell us whether Nepal has produced a genuine rupture—or simply replaced one set of elites with another, newer, and for the moment more popular set.

The author is a PhD candidate at the School of International Studies, Jawaharlal Nehru University, New Delhi. He is also a life member of the Delhi-based International Centre for Peace Studies

Nepal and India share one of the world’s most deeply rooted bilateral relationships—built on civilizational ties, open borders, cultural affinity, and economic interdependence. As the Prime Minister of Nepal prepares for an official visit to India, both countries stand at a defining moment: to transform traditional goodwill into structured economic integration driven by connectivity, trade facilitation, and shared prosperity.

Beyond diplomacy

Nepal–India relations extend far beyond formal diplomacy. They exist in the everyday lives of people—families, pilgrims, traders, students, and workers who move across an open and historically fluid border. This unique relationship is anchored in shared culture, religion, linguistic proximity, and deep social familiarity. Unlike most bilateral relationships, it operates at both state and societal levels simultaneously.
Yet while the foundation remains strong, the evolving global economy demands a shift in focus—from sentiment-driven engagement to system-driven cooperation. The challenge today is not trust, but transformation.

Proximity to prosperity

The next phase of Nepal–India relations can be captured in a simple yet powerful vision that rests on four key pillars:

• Trusted neighbours, transforming together:  A commitment to modernize relations based on mutual trust, cultural closeness, and respect, transforming historical ties into a results-oriented partnership.
• Co-creating growth across borders: Promotion of cross-border investment, industrial cooperation, and integrated value chains to drive sustainable economic development.
• Connecting economies, empowering people: Improving transport, logistics, and trade systems to reduce costs, increase efficiency, and directly benefit citizens.
• Shared heritage, shared future: Leveraging deep cultural and civilizational ties to ensure long-term regional stability and prosperity.

The engine of change

Connectivity remains the most critical pillar of Nepal–India economic relations. The efficient movement of goods, services, and people will determine the competitiveness of both economies.

Key priorities include the expansion of Integrated Check Posts (ICPs), dry ports, and cross-border rail networks. Equally important is the adoption of digital solutions—such as electronic cargo tracking and pre-arrival customs processing—to reduce delays and uncertainty.

For Nepal, where logistics costs remain relatively high, even incremental efficiency gains can significantly enhance export competitiveness and investment attractiveness.

Trade, industry and value chains

Beyond connectivity, the next frontier lies in industrial cooperation and regional value chain development. Nepal and India have strong potential to build cross-border industrial ecosystems, particularly in border regions.

Sectors such as agro-processing, light manufacturing, and high-value agricultural exports, including tea, cardamom, ginger, and honey, offer compelling opportunities for collaboration.

A transformative production model can be envisioned: ‘Produce in Nepal–Scale with India–Export Globally.’

This approach integrates Nepal into regional and global value chains while leveraging India’s scale and market access.

Regional integration: The BBIN opportunity

The BBIN (Bangladesh–Bhutan–India–Nepal) framework provides a broader platform for regional connectivity and trade expansion.

Full implementation of the BBIN Motor Vehicle Agreement would enable seamless cross-border transport, significantly reducing trade costs and transit times. Improved access to Bangladeshi ports via Indian corridors would further strengthen Nepal's external trade connectivity, positioning Nepal not as a landlocked country, but as a land-linked economy embedded in a wider regional network.

Quality infrastructure and global market access

To compete globally, Nepal must strengthen its quality infrastructure—upgrading laboratories, improving accreditation systems, and establishing joint certification facilities at key border points.

Alignment with international standards such as Codex, ISO, and SPS frameworks is essential for export credibility. Mutual recognition agreements can further reduce duplication and streamline trade compliance.

Institutional coordination and private sector role

Effective implementation requires strong coordination across government agencies, including those responsible for foreign affairs, commerce, customs, and regulation.

A joint Nepal–India trade facilitation task force, supported by regular review mechanisms, can help resolve operational bottlenecks. The private sector also plays a central role—institutions such as the Federation of Nepalese Chambers of Commerce and Industry, the Confederation of Nepalese Industries, and the Nepal India Chamber must lead efforts in exporter readiness, compliance awareness, and investment facilitation.

Partnership for the future

The upcoming Prime Ministerial visit represents more than a diplomatic engagement—it is a strategic opportunity to redefine Nepal–India relations for the next generation. With connectivity, competitiveness, and coordination strengthened, Nepal can position itself as a bridge economy in South Asia, linking markets, enabling production networks, and contributing to regional prosperity.

Ultimately, the future of this partnership will depend on moving beyond sentiment toward structured economic cooperation built on trust, transparency, and shared ambition.

Nepal and India are not just neighbours—they are partners in transformation, shaping a shared future in a rapidly changing global economy.

The author is the General Secretary of Nepal-India Chamber of Commerce and Industry