Reading Nepal’s political change from New Delhi
The growing prominence of Balendra Shah, widely known as Balen, to the position of Prime Minister comes at a time when India-Nepal relations are steady but not without underlying tensions. The relationship has always been unique, shaped by an open border, deep cultural overlap, economic interdependence, and a shared civilizational space. Yet, it has been marked by phases of temporary mistrust, especially when internal politics, leadership struggle, or public dissatisfaction in Nepal shift outward and take a stronger anti-India stance. In this context, Balen’s emergence is not just a political shift within Nepal but a moment that could potentially reshape how the two countries engage with each other.
What makes Balen different is the source of his political power. Unlike many leaders in Nepal who come from long-standing party structures, Balen represents a break from the traditional leaders. He rose as an independent, outsider figure. Unlike most politicians’ dependence on party backing, networking, and support from senior leadership, he was never a party worker and his reputation and visibility was not tied to traditional political machinery. His popularity has been built on governance, efficiency, and a promise to clean up public institutions. This matters for India. One of the recurring difficulties in dealing with Nepal has been political instability and frequent changes in leadership, which slow down decision-making and delay bilateral projects.
For instance, Arun III Hydropower Project has taken years due to approvals, renegotiations, and political uncertainty. That’s why, a leader with a strong mandate and a focus on delivery rather than ideology can bring a certain level of predictability. That alone can improve the policy continuity between New Delhi and Kathmandu.
There is also a noticeable shift in tone with Balen. He does not rely heavily on identity-based narratives or historical grievances like sovereignty or nationalism. Instead, his politics is grounded in practical concerns like urban planning and tackling waste management, improving business environment and creating local economic opportunities, and public services like roads and basic civic services. Balen’s focus on execution over rhetoric reduces the incentive to use anti-India sentiment, historical disputes, and ideological dialogues as a political tool, something that has surfaced in Nepal at different points in the past. If domestic legitimacy is tied to performance rather than nationalism, the room for stable and constructive engagement with India expands.
Another important factor is the generation he represents. Much of Balen’s support comes from younger voters who are less interested in geopolitical posturing and more focused on economic opportunities. In other words, Balen has entered a politics of economic desperation, not aspiration. Moreover, Balen uses social media for quick response to issues and has been building a perception of transparency. Undoubtedly, the urban voters, youth, and people frustrated with corruption and inefficiency see him as a welcome change. For them, India is not just a neighbour but a major source of trade, education, employment, and mobility. India is Nepal’s largest trading partner, a place for higher education in cities like Delhi and Bangalore, and a destination where millions of Nepali citizens live and work without visa restrictions.
Consequently, economic stability in Nepal is closely linked to access and cooperation with India. Therefore, a government that is responsive to the “Youthquake” is more likely to prioritise connectivity, cross-border trade, and investment flows, all of which naturally strengthen ties with India.
Balen’s leadership could also bring a more balanced approach to Nepal’s external relations. Nepal has always had to manage its position between India and China. It has been rightly described that Nepal is a “yam between two boulders”. At times, this balancing act has turned into strategic signalling, with Kathmandu leaning towards one side to counter the other. The 2015 blockade made Nepal sign multiple agreements with China on transit and infrastructure to reduce dependency on Indian routes. Likewise, during the 2020 Kalapani border dispute with India, Nepal issued a new official map that included several disputed areas within Nepal’s territory and followed this by a constitutional amendment to formalise the change. So, a leadership that is less tied to these legacy political alignments may approach the balancing act differently. Instead of sharp swings, there could be a steadier, more measured engagement with both neighbours.
For India, this kind of consistency is easier to work with. It reduces uncertainty and allows for long-term planning and policy continuity in areas like infrastructure, energy cooperation, and regional connectivity. It could mean continued hydropower cooperation with India alongside selective infrastructure projects with China without framing them as alternatives to India.
There is also a practical angle that often gets overlooked. Many India-Nepal agreements struggle not because of disagreement at the top, but because of slow implementation on the ground. Bureaucratic delays, regulatory hurdles, and lack of coordination have held back several projects. Take the cross-border railway projects like Jaynagar-Bardibas Railway as an example, it took years to operationalize because of construction delays and procedural hurdles on the Nepali side. Other important initiatives like Integrated Check Posts at border points like Birgunj witnessed delays in expansion due to regulatory and logistical challenges.
In this context, Balen’s track record as a city administrator suggests a preference for speed and accountability. He is willing to cut through red tape, follow timelines, and hold officials accountable for delays. If that approach carries into national governance, it could improve execution. Faster project delivery in sectors like hydropower and transport would directly benefit both countries.
That said, none of this is automatic. Moving from municipal leadership to national governance is a significant jump. Unlike his role as a mayor, as a Prime Minister of Nepal, Balen requires a different level of institutional coordination and strategic thinking. He has to diplomatically manage relations with neighbours on sensitive matters of security and trade. Balen will need to rely on experienced advisors and build a capable team to handle complex regional dynamics. So, the actual test is not whether Balen can win elections, but whether he can expand the Nepal state’s capacity and functionality. At the same time, India’s approach will be just as important. A respectful and non-intrusive engagement style from New Delhi will go a long way in supporting a stable partnership. The relationship has always worked best when both sides show sensitivity to each other’s concerns.
In many ways, this is less about one individual and more about a broader shift in Nepal’s political landscape. Balen represents a demand for cleaner governance, economic focus, and a break from old patterns. These aspirations do not clash with India’s interests. In fact, they align closely with what India seeks in its neighbourhood: stability, growth, and reliable cooperation.
If handled carefully, his leadership could move India-Nepal relations into a productive phase. That, in the long run, is often what sustains strong bilateral relationships.
The author is an editor at Zebra Learn. She studied International Politics at Jawaharlal Nehru University (JNU). Her research focuses on South Asian politics
Institutions, not idols, safeguard democracy
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.
Institutions, not idols, safeguard democracy
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.
Dr. Swarnim Wagle’s Road to the Economy Reform
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.
