Balen Shah unveils 100-reform agenda

The assault on corruption and misgovernance has begun in Nepal. On March 28, in the first high-voltage act of PM Balen Shah, the government ordered the first-ever arrest of a former PM, KP Oli. I have been witnessing the entire election process in Nepal. To recap, elections were held on March 5; by 6/7 March it was eminently clear that the four-year-old Rashtriya Swatantra Party had swept the poll in both First Past the Post (FPTP) and Proportional Representation (PR) of Nepal’s mixed electoral system.

But it was only on March 25, that the seniormost lawmaker of the dissolved House, Nepali Congress’s Arjun Narsingh KC (NC coup-maker Gagan Thapa’s father-in-law), was sworn in by President Ram Chandra Poudel as lawmaker. The next day, 274 of 275 lawmakers, including RSP chairman Rabi Lamichhane, who is out on bail on charges of corruption, were sworn in by Narsingh KC. From Shah’s body language and protocol (Lamichhane was the last to arrive at the lawmaker oath-taking), it appeared that he recognised Lamichhane as the senior party colleague. Lamichhane proposed Shah as the leader of the parliamentary party. Despite speculation about a personality clash, leadership friction, and buzz about power-sharing, the December 28, 2025 Seven Point Agreement between Lamichhane and Shah contains no ambiguity about separation of power. Once Lamichhane is cleared of legal baggage, how he will be accommodated in the cabinet, if at all, remains a question mark.

Four-times PM Prachanda of the Nepal Communist Party also took oath, as three former PMs were missing, not given a ticket, while two others lost the election badly, including four-times PM KP Oli (ousted by the Gen Z revolt), whose popularity plummeted from ‘I love KP Oli’ to ‘Oli Chor Desh Chhod’. On March 27, at 12.34, with astrological precision, former rapper and Kathmandu Mayor Balen Shah took oath from Poudel as Vedic priests and Buddhist monks chanted hymns and verses at Shital Niwas, Poudel’s residence. Manual counting of two sets of votes, including in remote areas, took three weeks — a process which can be compressed.

Meanwhile, the outgoing Sushila Karki interim government released three reports, including the Judicial Commission recommendations by Gauri Bahadur Karki on the investigation of the 7/8 September Gen Z revolt resulting in 77 deaths and arson and looting worth USD 5 billion. Kantipur TV severely criticised the Karki Commission report as ‘selective justice’ (the report was first leaked by Jan Astha magazine) for excluding events and accountability for arson on September 8, which implicated Shah and Lamichhane.

The profile of the new House is stunningly different from any in the past except in 1960, when NC had a two-thirds majority in the 10-month-long tryst with democracy. RSP will have 182 lawmakers, two shy of a two-thirds majority, but no representation in the National Assembly or in any of the seven provinces. The second-largest party, NC, has 38 seats, with the rest of the opposition aggregating 55 seats. Communists and Madhesis are wiped out; only 15 per cent of lawmakers in the last House will be present in the new House; 96 are women, the highest number ever (37 per cent), with 37 per cent of the House being below 40 years of age. The 2015 Constitution, widely criticised for failing to provide a majority government, has enabled RSP to do precisely that. Since 1990, 33 governments have been formed, mainly coalitions, but since 2015, fractured coalitions. The 15-member Council of Ministers, including five women, is the smallest ever but has one big surprise: Gen Z leader Sudan Gurung, who brokered Shah’s entry into RSP, as Home Minister. None in the Shah team has been a minister before, including Finance Minister Swarnim Wagle, who has been in the Planning Commission of Nepal. Lack of experience may not be a handicap to their performance.

Most helicopter commentators are reimagining Nepal’s foreign policy. They say while a non-ideological and post-Communist government will present opportunities to external forces for expanding their political space, the RSP government will be able to expand its strategic

autonomy.  This is the first foray into foreign relations of a brand-new party since 1951. Fly-by-wire experts are misreading geography and forgetting a historic tenet set by the founder of modern Nepal, King Prithvi Narayan Shah in 1746: that Nepal is a pebble between two giant stones. Landlocked Nepal has two borders - with China and India. The US and EU are two other external players. Every government in Nepal has invoked King Shah’s legacy using terms like ‘balanced diplomacy’ and Nepal ‘acting as a bridge between China and India’. RSP is calling it a ‘vibrant bridge’. The focus, as before, is on economics and ‘developmental diplomacy’. In its manifesto, RSP has merely changed the semantics of foreign policy.

An old tradition of ambassadors and eminent citizens congratulating the newly elected Prime Minister and his Council of Ministers is being maintained. While the Indian ambassador, Naveen Srivastava, who will be leaving shortly, was leading the queue, the new Chinese ambassador Zhang Maoming not only shook Shah’s hand but engaged in a long conversation and handed over a letter inviting him to visit China. Which country, China or India, Nepal’s PM visits first is a very big issue. Every foreign policy move of this non-ideological PM and government will be carefully dissected to identify the tilt. For China, with Communist and Left lawmakers numerically reduced from 110 in the old House to 42 members at present, this is a cause for concern.

Balen Shah’s team has set an ambitious developmental agenda of 100 reforms. The government’s focus will be inward-looking, attempting to make life more convenient for ordinary Nepalese as Nepal will shortly exit from being a Least Developed Country.

Home Minister Gurung, who was the de facto leader of Gen Z and negotiated a number of agreements with the Karki government, is determined to prosecute the crusade against corruption, and already some former ministers have been arrested, and public response has been hugely positive. Former PMs Oli, Deuba, Prachanda, and some ministers will spend nervous nights as old files are dusted and closed cases reopened.

The writer, presently in Nepal, is a retired Major General, who served as Commander, IPKF (South), Sri Lanka; views are personal