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Nepal is changing. With the formation of a new, strong cabinet, the country is entering a fresh phase of policy reform, infrastructure investment, banking expansion and accelerating urban growth. Ministers have spoken of modernising public services, attracting foreign capital and building the foundations of a prosperous nation. Yet amid this momentum, one critical sector continues to operate in near-total regulatory darkness, a sector that quietly underpins every bank loan, every land deal, every infrastructure project and every insurance claim in the country: property valuation. 

I have spent years in the field as a professional valuer. What I have witnessed is not merely a gap in policy, it is a structural vulnerability that exposes Nepal’s entire financial architecture to systemic risk. I have catalogued seventeen major failings in Nepal’s current valuation framework and issued a ten-point reform agenda directed at the incoming government. 

The analysis has drawn significant attention from banking professionals, urban planners and policy experts across the country. 

A profession without a rulebook 

The most fundamental problem, Bhattarai argues, is deceptively simple: Nepal has no Valuation Act. Unlike most developed and many developing economies, there is no legislation governing who may call themselves a property valuer, how they must practise or what standards they must uphold. The profession is entirely unregulated. 

This absence of legal framework produces a cascade of dysfunction. Banks continue to rely on the antiquated 70:30 valuation method, a blunt instrument that fails to reflect actual market dynamics. The same piece of land or property will carry entirely different values depending on the context: one figure for a mortgage, another for taxation, a third for government compulsory acquisition, a fourth for insurance and yet another if the property is to be sold under forced-sale conditions. 

This multiplicity of values for the same asset is not a technicality. It creates real-world consequences: borrowers are misled, lenders are exposed and the state loses revenue it is legally owed.

Nepal’s valuation sector currently faces a complex web of structural, ethical, and technical challenges that the government must urgently address. At the foundational level, the industry suffers from a total lack of legislative oversight; there is no Valuation Act to govern the profession, leaving it entirely unregulated without national licensing examinations or mandatory continuing professional development. 

This legislative vacuum is mirrored in the technical sphere, where the absence of a national property transaction database or automated digital data systems forces banks to rely on the outdated 70:30 valuation approach. Furthermore, the lack of professional liability or indemnity insurance leaves both practitioners and the broader financial system exposed to significant risk.

The integrity of the market is further compromised by inconsistent standards and external pressures. Currently, the same property often carries different values depending on the purpose, while government-mandated ‘minimum land values’ and compulsory acquisition compensations frequently sit well below actual market prices, leading to reduced tax revenue and public dissatisfaction. Within the mortgage sector, the routine application of forced sale values over true market values—combined with unhealthy fee competition and the absence of minimum fee guidelines—erodes professional standards. 

These systemic weaknesses are often exploited, with lenders and borrowers pressuring valuers to match desired loan amounts, alongside persistent commission practices and political interference. Ultimately, this culture of overvaluation and distorted compensation not only elevates banking risk but also contributes directly to the rise of non-performing assets across the country.

The banking system’s hidden exposure 

Perhaps the most alarming dimension of my analysis concerns Nepal’s banks. Property valuation is the cornerstone of collateral-based lending which accounts for a vast majority of credit extended in Nepal. When valuations are inflated, banks extend loans against assets that cannot support them. When borrowers default, the forced-sale recovery falls short, leaving lenders nursing losses and contributing to the country’s already-elevated level of non-performing assets. 

The problem is compounded by what Bhattarai describes as an informal culture of influence: some banks and borrowers apply pressure on valuers to produce figures that support the loan amount requested, rather than reflecting genuine market conditions. Without professional regulation, without the threat of licence revocation or professional sanction, individual valuers have little institutional protection against such pressure. 

There is also no national database of actual property transactions. Without transparent, verified sales data, valuers are forced to rely on estimates, hearsay or out-of-date benchmarks. This informational vacuum makes accurate, independent valuation structurally difficult even for those who wish to practise with integrity.

To address these systemic challenges, a comprehensive ten-point agenda for reform is proposed to modernize Nepal’s valuation sector. The cornerstone of this initiative is the introduction of a Valuation Act of Nepal, which would provide the necessary legal framework to establish a Valuation Council or Regulatory Authority. This body would be responsible for making value licensing mandatory, ensuring no individual practices without proven competence. To bring local practices up to global benchmarks, the agenda calls for the implementation of Nepal Valuation Standards aligned with the International Valuation Standards (IVS). 

Furthermore, to eliminate the current ‘race to the bottom’ regarding quality, the government should establish minimum valuation fee guidelines and introduce professional indemnity insurance to protect clients and ensure financial accountability.

In addition to regulatory shifts, the agenda emphasizes a technological and data-driven overhaul of the financial system. This includes developing a National Property Transaction Database to create a transparent record of actual sales and modernizing the mortgage system by replacing the outdated 70:30 method with market-reflective approaches. To support human expertise and reduce errors, the plan advocates for the development of Automated Valuation Models (AVM) and the creation of a Central Valuation Record System for banks. 

These digital tools allow financial institutions to systematically identify inconsistencies and overvaluations, ultimately stabilizing the economy and restoring professional integrity to the field.

‘Reform is not optional’ 

If Nepal is genuinely committed to sustainable economic growth, to attracting foreign investment, to expanding its banking sector and to building world-class infrastructure, then property valuation reform is not a peripheral concern, it is a prerequisite. The valuation sector sits quietly behind banking, taxation, compensation, insurance and development projects. If valuation is wrong, the entire financial system can be affected. It is time Nepal formally recognised, regulated and modernised the valuation profession.

The timing of intervention coinciding with the formation of a new cabinet and a renewed national conversation about institutional reform has lent it a particular urgency. Whether policymakers will heed the call remains to be seen. But the case is difficult to dismiss.

The appointment of 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. With Wagle at the helm, the country stands at a curious juncture: the possibility of translating classy economic theory into disciplined statecraft. Wagle’s transition from academic strategist and one of the architects of the Rastriya Swatantra Party’s (RSP) 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, 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 $3,000, expand GDP to $100bn, and generate over a million jobs with the RSP 1.0 era. The stakes are immense, and the opportunity historic.

The blossoming tenure of Wagle reflects a commendable reformist zeal, signaled by the swift repeal of obsolete legislations. 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 agencies, without a prior longitudinal evaluation of their functional efficacy risks replicating the institutional failures of previous times. Authentic economic statecraft demands that Nepal move beyond the anecdotal, narrative-heavy advisory reports that have historically dominated the policy landscape. Instead, 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 percent, the industrial and agricultural sectors continue to contract, with industrial capacity languishing at 44.5 percent. 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 percent of the annual budget is often exhausted in the final month, yielding substandard infrastructure and inflated logistical overheads. In the 2024/25 period, federal outlays of Rs 1.523trn significantly outpaced an aggregate revenue of Rs 1.178trn, with capital investment restricted to a meager 14.6 percent. Breaking this cycle of stagnation requires a major 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, Wagle can move beyond the uninspired methodologies of the past. 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 connect 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 Minister 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, he 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 $3,000 per capita income and a $100bn 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 Wagle can seize the moment, discipline the machinery of governance, and deliver the impactful change that the present demands. If Minister Wagle succeeds, this will not simply be a chapter in Nepal’s economic story; it will be the beginning of a new era.

Walk into any consultancy office in Kathmandu, and the conversation is almost always the same: IELTS scores, statements of purpose, visa timelines. Each year, tens of thousands of young Nepalis fold their dreams into suitcases and line up at Tribhuvan International Airport, convinced that prosperity is a destination, somewhere far beyond Nepal’s borders.

But this wave of migration is more than just a labor market trend. It points to a deeper, quieter problem. Economic understanding is largely missing from our public life, and most people are never really taught how the economy around them works. As a result, they are left to make life-changing decisions without the tools to fully understand their choices. Until people can make sense of their own economy, this outflow will continue. Not just because wages are higher abroad, but also because many simply do not see the opportunities that exist at home.

Economics has a reputation problem. Mention the word, and many imagine impenetrable graphs, abstract models, and the cold logic of “rational actors.” The reality is very different. In the end, economics is really about people. It’s about how we make decisions when resources are scarce, when we are competing with others, and when our choices carry consequences.

When I shifted from the natural sciences to economics, I didn’t just change fields. I gained a new way of reading the world. Economics helps explain the “why” behind the headlines. It shows why a government spending surge can make groceries more expensive, why postponing a job to pursue higher education carries a real opportunity cost, and how a country’s trade policies limit or expand the choices available to its citizens. Without this perspective, navigating public life is like walking without a map. People become more vulnerable to political narratives and less prepared to make informed decisions about their financial future.

Nepal’s economy rests on a surprisingly fragile foundation. The country has become structurally dependent on remittances, the hard-earned savings of Nepali workers in the Gulf, Malaysia, and other countries, to support household incomes and maintain foreign exchange reserves. Today, remittances account for a significant share of Nepal’s GDP, making it one of the most remittance-reliant economies in Asia.

These inflows provide immediate relief but do little to build the internal capacity needed for lasting prosperity. Economists describe them as a painkiller rather than a cure. There is a well-known risk called Dutch Disease, where reliance on a single source of income can lead to the neglect of other productive sectors such as agriculture and manufacturing.

Understanding this helps answer questions that might otherwise seem puzzling. For instance, why does Nepal, a country with fertile hills and abundant water, import billions of rupees worth of agricultural goods each year? The answer lies not in geography but in the persistent neglect of domestic production, a neglect that remittances have helped conceal.

The principle of comparative advantage teaches that nations thrive not by producing everything. Instead, it should focus on what it can do better and more efficiently than others. That’s how countries grow and benefit from trade. For Nepal, the lesson is clear: energy.

Nepal’s rivers hold some of the greatest hydroelectric potential in the world. Yet for decades, the country imported electricity from India while much of its own water resources remained untapped. The idea of Nepal as the “Battery of South Asia” has become a national aspiration. Yet the gap between this dream and reality shows that many people haven’t fully understood how the economy works or how to turn big ideas into practice. In other words, the public’s lack of economic imagination partly explains why the vision remains unrealized. A population with economic understanding doesn’t simply accept industrial stagnation; it asks why it exists.

The example of Vietnam offers valuable insight. Just a generation ago, it was mostly an agrarian economy. Through deliberate, strategic choices, the country focused on electronics and light manufacturing, integrating itself into global supply chains with discipline and consistency. Today, Vietnam stands among Asia’s fastest-growing economies. Vietnam’s success was not just a matter of resources; it depended on a public and leadership capable of thinking strategically about how to deploy them.

An economically literate generation is a questioning generation. It demands better policy, builds more resilient businesses, and sees Nepal not as a place to leave, but as an economy to lead. This does not mean Nepal needs a generation of professional economists. The goal is both more modest and more urgent: giving ordinary citizens the conceptual tools to understand the decisions made in their name.

If Nepal’s schools can teach the mechanics of photosynthesis and the chronology of ancient dynasties, they can certainly teach how a national budget is created, why inflation reduces purchasing power, and what it means for a country to run a current account deficit. These are not abstract academic exercises; they are the everyday grammar of economic life.

Yet in Nepali school curricula, economics is treated as an elective—a subject for those planning to study commerce rather than a civic necessity for all students. That distinction is no longer defensible. The Ministry of Education and curriculum developers must recognize that economic literacy belongs alongside mathematics and civics as a foundational skill, not an optional add-on.

Nepal’s long-term future will not be determined by the next foreign aid package, a temporary surge in Gulf labor demand, or a single hydropower milestone. It will be shaped by the cumulative quality of thinking, the everyday decisions of millions of citizens, entrepreneurs, and civil servants about risk, investment, trade, and governance. 

A country that exports its most talented people while importing its most basic necessities has yet to answer the most fundamental question of development: how to create conditions where ambition is directed inward rather than outward. Economic literacy alone will not solve this challenge, but without it, the question cannot even be addressed. Young Nepalis who understand concepts like opportunity cost, comparative advantage, and the structural risks of remittance dependency are better equipped to make choices that benefit not only themselves but the economy around them. This is the kind of knowledge that cannot be packed into a suitcase and does not require a departure gate.

Nepal has successfully conducted another mid-term parliamentary election in a peaceful environment. This election has provided a grand victory for an emerging political force, particularly the Rastriya Swatantra Party (RSP).  RSP appears to be gaining a historic win with a clear majority in parliament. This outcome reflects years of frustration among the Nepali people that stemmed from entrenched corruption, political instability, and high unemployment. The election result suggests Nepali people’s eagerness for change. However, there are many challenges and unanswered questions ahead of this political transition. How does this political shift bring economic prosperity and overnight changes that the Nepali people voted for? How do new political dynamics benefit Nepal’s overall development?

As the world has been experiencing a populist political movement to gain political power, Nepal is no exception. New social media trends and the globalization of information sharing made this more complicated. Fewer than 30 percent of Nepali adults have completed high school, indicating low educational attainment in Nepal. The lack of higher education can make people more vulnerable to misunderstanding misinformation and disinformation circulating on social media and global trends. Keep in mind that this does not necessarily mean that people without formal education lack intelligence. 

Thus, education helps to navigate today’s critical digital environments, where false and misleading content spreads quickly. Experiencing an unemployment crisis, Nepali youths have been upset with the government and political leaders. Additionally, topics of infrastructure development, good governance, social equality, and citizens’ everyday issues have been exaggerated by politicians and civil society leaders. A lack of understanding of Nepal’s overall development and past mistakes has made Nepali politics even more fragile.

RSP presented one of the top agenda items as investigating corruption and providing good governance to the Nepali people, even though its president faces charges of financial and civic misconduct. Corruption allegations are one of the easiest allegations in the political arena. It helps political parties to energize their voters; they have no responsibilities to prove it. According to Transparency International, Nepal falls under the score of 34, along with other countries, including Algeria, Brazil, Malawi, Niger, Thailand, and Turkey, in the corruption perceptions index. Many economically well-functioning countries also score under 45, including China and India.

It is important to note that corruption is not just a single cause for Nepal’s lack of economic prosperity. Nepal indeed faces a higher level of corruption, and its bureaucracy has misused and poorly managed public funds. Hence, the political challenges that Nepal faced throughout its history weakened its institutions or failed to strengthen them. In the absence of policy and bureaucratic transformation, Nepal continuously focused on political changes; recent youth protests and elections are examples of this pattern.

The RSP promises to investigate corruption allegations against political leaders and punish those responsible. However, it has not consistently explained its good governance agenda or how it plans to implement it. As many scholars point out, corruption is not only financial misconduct; it also reflects an ethical crisis, policy failures, and weak institutional integrity. Moreover, Nepali people have repeatedly seen politicians use state power as tools for revenge and political gain. If the RSP focuses mainly on persecution while failing to advance policy reforms and ethical standards, Nepali society may not make meaningful progress in good governance and anti-corruption efforts.

The RSP, as a neo-populist political force, promises rapid economic, social, and industrial changes in Nepal. Without presenting a clear political and economic ideology, the RSP has suggested a simple path to the country’s well-being. They blamed others for the country’s problems and promoted a divisive “us versus them” narrative. This approach may be risky for the party in the future, but it also risks the hopes and expectations of the Nepali people. We all know that overnight changes are not possible. Changes and prosperity require time, collaborative effort, vision, and long-term determination. However, the RSP has already manipulated current issues and rejected the achievements of the past. The party’s inability to fulfill people’s hopes can frustrate the people.

Unemployment is one of the major problems facing Nepali youth, as many unskilled workers depend on foreign labor markets for employment. Creating jobs requires a stable political environment, but history shows that Nepal has been one of the most politically unstable countries. Nepal’s political and policy-level of instability make it a less attractive place for investment. The recent destruction of public property, businesses, and private property by youth protesters has not only discouraged foreign investors but also deeply disappointed Nepali business leaders. The government’s failure to ensure safety and security is a key reason why Nepal is still not seen as a viable destination for large-scale investment. 

Failure to attract investment in the industrial sector of Nepal means Nepali youth have no choice but to rely on the foreign labor market. On the other hand, the unstable Middle East and international conflict make the foreign labor market riskier and more uncertain. The RSP government will face significant challenges in attracting internal and external investment in small and large industrial businesses. Since the party leaders have not presented a clear plan to address the unemployment crisis, the future remains uncertain.

The Nepali people are excited about the RSP’s landslide election victory because of the party’s populist agenda. Many people believe that change is possible, but the party may have raised expectations on uncertain premises. The RSP’s political rhetoric around unemployment, economic problems, corruption, and social inequality does not have quick fixes. The party has also portrayed traditional political forces, the media, business leaders, and existing institutions as its opponents, thereby creating a divisive political environment. It may discourage other parties from working collaboratively with the RSP government. The lack of trust between the government and the private sector impedes the resolution of people’s problems.

Nepal’s limited resources for economic development prevent a rapid response to current problems and make it difficult to meet people’s expectations. This may lead the RSP and its government to divert public attention toward political agendas such as constitutional amendments or changes in governing structures.

Many analysts argue that populist politics can lean toward authoritarian tendencies. Populist leaders prize praise and loyalty over accountability. Such governments may be less appreciative of political discourse, analytical criticism, the rule of law, freedom of speech, and logical debate—all essential for a healthy democracy.

The Nepali people voted for political stability, good governance, and economic opportunities. Whether those aspirations translate into meaningful progress depends on the quality of RSP leadership and the depth of its long-term vision.

The author is a PhD student in Public and International Affairs at Virginia Tech