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Kathmandu

Honeymoon is Over!

The new Nepalese government, led by Prime Minister Balendra Shah, has, within a few weeks of assuming office, been rattled by numerous ministerial resignations, legal controversies, and growing frustration among Generation Z over employment opportunities, transparency, and unmet expectations

By PD Dr. Pushpa R. Joshi | July 2026

After a landslide victory in the elections backed by the Gen-Z movement, former Mayor of Kathmandu Metropolitan City, Balendra Shah, was sworn in as the Prime Minister of Nepal on 27 March 2026. The rise of Shah, a lesser-known rapper-turned-politician, to the country’s highest executive post is undoubtedly an incredible achievement. During the elections, excitement was in the air as everyone eagerly hoped for a chance to see Shah. Crowds would gather in large numbers wherever he went while campaigning. The people of Nepal were frustrated by the misdeeds of leaders of the established parties over the last thirty-five years and by the mediocre performance of previous governments.

The association of Balendra Shah with the Rastriya Swatantra Party (RSP) revived the party’s deteriorating image, which was carrying the legal baggage of its President, Rabi Lamichhane. Lamichhane was in judicial custody on allegations of embezzlement of cooperative funds and money laundering during the Gen-Z movement. He dubiously broke free from the prison amid the chaos on September 9, but the Gen-Z supporters compelled him to return behind bars after a few days. The interim electoral government, led by former Chief Justice Sushila Karki, showed leniency towards Lamichhane, who was released on bail.

Surprisingly, Balendra Shah, a vocal critic of the RSP, joined the party on the eve of the elections, seemingly rejuvenating it. The outcome of the elections shows that the strategy worked quite well, and the RSP secured almost a two-thirds majority in the parliament. As a pre-electoral commitment, Balendra Shah was unanimously chosen by RSP parliamentarians as their Prime Minister candidate. People expected a positive start from the Prime Minister and his team, as the government was carrying the legacy of unprecedented casualties and devastation caused by the Gen-Z movement.

The government seems to have off-tracked from the outset, as within the few weeks in the office, the Balendra Shah administration has been rattled by multiple ministerial resignations, legal controversies, and rising frustration among Gen-Z over jobs, transparency, and unmet expectations — the very generation that powered his rise is now asking hard questions. In addition, the spontaneous, arbitrary arrests of former Prime Minister KP Sharma Oli and former Home Minister Ramesh Lekhak were overturned by the court. On the other hand, Sudan Gurung, the Home Minister and a close aide to Prime Minister Shah, was known to be involved in serious financial and moral controversies. Furthermore, the sources of the extensive wealth and numerous properties owned by the Prime Minister and members of his ministerial council have not been transparently disclosed.

Prime Minister Shah’s decision to displace the landless squatters without adequate planning and proper management has been widely condemned by a large segment of society. Over and above that, the Prime Minister has blatantly breached the seniority provision in appointing the Chief Justice and has appointed an allegedly inept Attorney General. Furthermore, Prime Minister Shah has been seemingly ignoring the Parliament with the lame excuse that he has more important obligations to fulfill than attending the parliamentary proceedings—a grave contempt of the people’s verdict.


Prime Minister Shah, being an introvert, seems confined to his own shell in the company of his close coterie. Despite being people’s representative, he is not publicly visible and easily accessible. His supporters and RSP followers defend him, stating that the Prime Minister is working diligently for the people and the country. However, no significant achievements by the Prime Minister and his ministers have yet become apparent. While it may be too early to pass a definitive judgment on the government’s performance, the Prime Minister’s occasional irresponsible remarks do little to inspire confidence in a promising future.

The most irresponsible act of Prime Minister Shah was seen during a spontaneous question and answer session in the Parliament, where, responding to the question of one of the parliamentarians, Shah falsely declared from the rostrum of the Parliament that Nepal has encroached on Indian land in several places - a totally bogus statement from a head of government. It’s understandable that the RSP parliamentarians are staying silent on this issue, as they seem to have become quite passive in their support for the Prime Minister. However, it’s truly disheartening to see so many RSP followers and so-called intellectuals backing him in this deeply troubling remark.

It is still too early to render a verdict on the Balendra Shah-led government, though the early indications do not appear promising

Loyal supporters of the government and Prime Minister Shah himself claim that he is working around the clock in the best interests of the people. However, there is little tangible evidence to support this assertion thus far. On the other hand, the recently announced budget for the coming fiscal year presents a markedly different picture. The finance minister has been alleged to have tampered with the Budget script in favor of certain interest groups. Moreover, the imposition of a 3% “equality fee” on private education and healthcare services, along with a 5% VAT on monthly electricity consumption exceeding 50 units, has not been well received by the public.

The Financial Action Task Force (FATF) has placed Nepal on its grey list with a deadline to address its financial standing by early next year. A delegation of the Asia-Pacific Group on Money Laundering (APG) had recently visited Nepal to evaluate and assist the country in exiting the FATF grey list. The reports revealed that the delegation was not satisfied with Nepal’s efforts to improve its financial standing and, hence, warned that Nepal must significantly accelerate its anti-money laundering and counter-terrorist financing reforms or risk being downgraded to the FATF blacklist at the September 2026 APG meeting. On the contrary, the government has recently withdrawn several pending money-laundering cases linked to RSP chairman Rabi Lamichhane and his associates by administrative decision. The APG must be closely observing these activities.

It is still too early to render a verdict on the Balendra Shah-led government, though the early indications do not appear especially promising. Prime Minister Shah has a humongous responsibility on his shoulders. Hence, he needs to reconsider his working style and begin acting in the best interests of the Nepalese nation. Setting aside all grievances and differences, it is certainly time to deliver results. Otherwise, the government’s untimely downfall is inevitable.

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