The KP Sharma Oli-led government has completed one year in office, delivering a mixed record on its promises. Two major parties came together pledging to ensure political stability, especially after the CPN (Maoist Center), the third-largest party, had repeatedly shifted alliances—often playing the Nepali Congress (NC) and CPN-UML against each other.
One notable outcome over the past year is a degree of government stability, if not full political stability. The current NC-UML coalition appears relatively stable and is unlikely to collapse in the near future, though questions about its longevity persist.
Despite the coalition’s stability, the government has failed to curb the frequent transfers of high-level bureaucrats, which has severely disrupted the functioning of government agencies. At the provincial level, however, there is now more stability, ending the earlier pattern of frequent changes in chief ministers and governors.
When the coalition was formed, both parties had agreed to amend the constitution. However, there has been no progress on that front, drawing criticism from opposition parties and the general public. The parties seem uncertain whether to first assess the constitution’s implementation or proceed directly with amendments. “The slow progress clearly shows that NC and UML raised the amendment issue without a well-thought-out plan,” says political analyst Chandra Dev Bhatta. “It’s a complex issue that requires delicate handling.”
While the NC and Madhes-based parties have discussed constitutional amendment internally, there has been no broader cross-party effort. Parties remain deeply divided on the matter, with each inclined to revive their core agendas from the constitution-drafting process.
The 2015 constitution was a compromise among parties with competing priorities. Reviving the amendment issue risks hardening those old positions, making any changes unlikely. Prime Minister Oli himself has repeatedly said that constitutional amendments are unlikely before 2027. Within the NC, the faction led by senior leader Shekhar Koirala has criticized the government for its inaction on this front.
On the economic front, there have been signs of modest recovery. To recommend reform measures, the government formed a high-level panel led by Rameshwor Khanal, which has already submitted its report. It remains to be seen how the government will act on its recommendations.
Though the economy underperformed over the past year, some recovery has been observed. According to the Asian Development Bank, Nepal’s economy is expected to grow by 4.4 percent in the current fiscal year, up from an estimated 3.9 percent in FY 2023/24. Consumer inflation has also declined to 2.72 percent, down from four percent last year.
However, with just days left in the 2024/25 fiscal year, more than half of the development budget remains unspent. According to the Financial Comptroller General Office (FCGO), only 46.59 percent of the capital budget had been utilized as of July. Of the Rs 352.35bn allocated, just Rs 164.15bn has been spent.
On the external front, Prime Minister Oli paid an official visit to China, where he signed a long-pending framework agreement. While this caused some unease within the Nepali Congress, it has not led to significant rifts between the coalition partners. Projects selected under the Belt and Road Initiative (BRI) framework have yet to show any real progress. The Prime Minister has also made other bilateral visits, and preparations are underway for his upcoming visit to India, which is expected to take place soon.
