CPN (Maoist Center) Chairperson Pushpa Kamal Dahal has reignited his efforts to create discord within the ruling coalition, publicly claiming that the government could collapse at any moment due to growing dissatisfaction within the Nepali Congress (NC). His remarks have forced the CPN-UML Chairperson and Prime Minister KP Sharma Oli to publicly reaffirm the coalition’s stability.
For a brief period, Prime Minister Oli found respite as opposition parties, including Dahal, diverted their attention toward criticizing former King Gyanendra Shah amid pro-monarchy protests. However, with these protests losing momentum, Dahal has returned to his primary objective: toppling the current government and forming a new coalition with the NC. He has openly stated that it would be natural for the largest party to lead a new government, expressing his willingness to support NC President Sher Bahadur Deuba as prime minister. This has pressured Oli into urgent negotiations with senior NC leaders to secure their continued backing.
NC leaders have publicly criticized the government’s performance, though both parties have agreed to resolve their differences.While Deuba himself may not be actively seeking to destabilize the government, Dahal’s statements have strengthened his bargaining power in key political appointments. Prime Minister Oli, once known for his uncompromising stance, now appears more flexible, offering crucial positions to the NC to maintain their support. UML leaders suspect that certain forces are working to isolate them ahead of the 2027 elections, potentially forming a grand electoral alliance against them. UML members also feel that the NC is increasingly dominating government affairs, creating unease within their ranks.
Following the March 28 protests, pro-monarchy forces are attempting to regroup. Police recently arrested Durga Prasai, a key figure in the protests, in India’s Assam state, where he was hiding. Authorities are investigating his alleged involvement in arson, vandalism and violence during the demonstrations. The movement also appears fragmented, with Jagman Gurung’s group and the Rastriya Prajatantra Party (RPP) failing to coordinate unified protests. The RPP plans to launch mass demonstrations soon and is demanding the release of its leaders, Rabindra Mishra and Dhawal Shumsher Rana, though the government has refused negotiations.
In his New Year message, the former king expressed regret over last month’s violence but framed the protests as a sign of growing public awareness about Nepal’s future. Despite skepticism about his commitment to democracy, he reiterated his support for a multi-party system and constitutional monarchy, signaling a tacit approval of the pro-monarchy movement.
Meanwhile, teachers continue to protest, demanding government action on their grievances. Despite ongoing talks, resolution seems not so close, prompting the government to prepare for a House session to pass the Education Bill.
The High-Level Economic Reform Advisory Commission, led by former Finance Secretary Rameshore Khanal, has identified declining consumption and investment as major obstacles to economic growth.
The commission recommends immediate policy measures to stimulate demand, alongside structural reforms to reduce production costs and improve competitiveness. Key issues include sluggish credit growth, stalled real estate transactions, funds trapped in cooperatives, delayed government payments, and a crisis in the construction sector. The report also highlights how pandemic-era monetary policies, inadequate fiscal stimulus and import restrictions have exacerbated economic stagnation over the past two years.
In yet another development, former President Bidya Devi Bhandari has hinted at her entry into UML politics, suggesting that due to health reasons, Prime Minister Oli may gradually hand over party leadership to her. Meanwhile, former Vice-President Nanda Kishor Pun has joined the Maoist Center. At the same time, the Rastriya Swatantra Party (RSP), the fourth largest party in the parliament, continues to face a crisis disproportionate with its size after Chairperson Rabi Lamichhane’s re-arrest, casting uncertainty over its upcoming general convention. With Lamichhane detained, internal divisions among top leaders have weakened the party’s functionality, though efforts to strengthen grassroots organization continue.
