Two major coalition partners, the Nepali Congress (NC) and CPN-UML, are reviewing the performance of government ministers, with plans to dismiss those deemed ineffective. Ministers were informed at the time of their appointment that they would face evaluation after one year and could be removed based on their performance. Prime Minister KP Sharma Oli and NC President Sher Bahadur Deub have begun consultations for a cabinet reshuffle. However, the move is likely to stir discord within both the NC and UML.
Overall, ministerial performance has been unsatisfactory. While ministers made lofty promises and generated noise, tangible results have been lacking. Meanwhile, CPN (Maoist Center) Chairperson Pushpa Kamal Dahal is once again pursuing the unification of fringe communist parties to bolster his political position. With his attempts to spark friction between the NC and UML proving ineffective, he has shifted focus to party unification.
Dahal has reached out to CPN (Unified Socialist) Chairperson Madhav Kumar Nepal for immediate unification. However, many CPN (US) leaders and cadres prefer to return to the UML rather than merge with the Maoist Center. Should Nepal decide to unify with Dahal’s party, it could trigger a split in the CPN (US). Meanwhile, the UML has taken stricter measures to curb former President Bidya Devi Bhandari’s activities within the party.
The UML has issued a circular instructing party units not to engage in any debate over Bhandari's potential return to active party politics. Intra-party tensions are also mounting in the Maoist Center, with Chairperson Dahal and senior leader Janardan Sharma exchanging public barbs. Dahal has accused internal forces of spreading false rumors that he is planning to split the party.
While Dahal shows no intention of relinquishing party leadership, a power struggle is underway. Senior leaders Sharma and Barshaman Pun are positioning themselves as his successors. In the Dahal-Sharma tussle, Pun appears to be aligning with Dahal to gain favor. All three major parties—NC, UML, and Maoist Center—face looming leadership crises as Deuba, Oli, and Dahal approach retirement.
The UML’s circular may hinder Bhandari’s ability to organize political events, as party leaders now fear disciplinary action. Since the party revoked her membership, many of her vocal supporters have stopped attending her programs. Though Bhandari has expressed her intent to stay active in politics, recent party decisions are likely to restrict her activities significantly.
Amid rumors of a challenge to Deuba’s leadership, Shekhar Koirala has admitted that his faction lacks the numbers to replace him as parliamentary party leader. Speaking publicly, Koirala said even Deuba is aware of this reality. Still, Koirala continues to ride the wave of anti-incumbency sentiment within the party to strengthen his own position, criticizing both the party and government leadership.
Deuba remains in a relatively secure position as Koirala and General Secretary Gagan Thapa, despite both wanting to prevent Deuba from returning as prime minister, remain rivals and are not working together. Their push to hold the party’s general convention before the 2027 election seems unlikely to succeed, as unresolved issues over active membership persist. Within the NC, realignments and the formation of new factions are expected in the coming days, as Deuba has announced he won’t contest the presidency again.
Meanwhile, the Nagarik Unmukti Party has expelled Chairperson Ranjita Shrestha over her alleged involvement in a corruption scandal. Once an emerging force in the 2022 parliamentary elections, the party had recently withdrawn its support to the government and now finds itself mired in internal conflict. In Nepal, intra-party power struggles have become a political norm, often resulting in splits.
The controversy surrounding the land-related bill remains unresolved. The ruling NC has proposed a five-point amendment to address differences, particularly with UML. Madhes-based parties have expressed dissent on several provisions. Upendra Yadav, chairman of the Janata Samajbadi Party Nepal, has said the bill violates the constitution and plans to challenge it in court. The Rastriya Swatantra Party has called for the bill to be returned to the Agriculture Ministry.
Parties are also preparing for the by-election in Rupandehi-3. It is still unclear whether the NC and UML will form an electoral alliance. Candidate selection is underway, and the by-poll is expected to serve as a barometer for current public support for political parties.
In Bagmati Province, the government faces renewed instability due to internal party rifts. Indra Baniya has been elected the party’s parliamentary leader, defeating incumbent Chief Minister Bahadur Singh Lama. Lama is under pressure to resign after losing control over his own party. Though the province had seen stability for the past year due to the NC-UML coalition, tensions are now resurfacing.
On a different front, the US government has officially confirmed that Millennium Challenge Corporation (MCC) projects will continue in Nepal, ending months of uncertainty. Both the Biden and Trump administrations have viewed MCC in Nepal as a counter to China’s Belt and Road Initiative (BRI).
Nepal’s decision to sign the BRI framework agreement with China earlier this year increased pressure on Washington to retain MCC support. A bipartisan consensus exists in the US on countering China’s growing influence, and the continuation of MCC underscores Nepal’s strategic importance, despite broader aid cuts.
Finally, Prime Minister Oli is scheduled to visit Turkmenistan from Aug 5–8 to participate in the Third UN Conference on Landlocked Developing Countries. Preparations are also underway for his likely visit to India in September, though the date has not been confirmed.
