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Introduction

Rameshore Prasad Khanal has taken office as Nepal’s Minister of Finance under the new interim government led by Prime Minister Sushila Karki. Sworn in on 15 September 2025, Khanal assumes the role amid significant political upheaval following nationwide protests against corruption. His appointment comes at a time of economic strain and is expected to steer policy toward fiscal reform, revenue enhancement, and stabilisation ahead of the general election scheduled for March 2026.

 

Background / Context

Nepal is currently governed by an interim administration after mass protests, primarily led by the Gen-Z generation, erupted in early September 2025. The demonstrations demanded accountability, transparency, and systemic change; they culminated in the collapse of the government headed by K.P. Sharma Oli.

Sushila Karki, Nepal’s first female Chief Justice, was appointed interim Prime Minister on 12 September 2025. Her mandate includes holding general elections, restoring public trust, and stabilising institutions.

Rameshore Khanal is a seasoned bureaucrat and economist. He has previously served as Finance Secretary, and more recently chaired the High-Level Economic Reform Commission, which presented recommendations on tax policy reform, revenue mobilisation, public sector reform, and governance improvements. His academic background includes a Bachelor of Commerce (BCom), MBA, and he also holds an associate membership in the Indian Cost & Management Accountants (ACMA) body.

Given the damaged public infrastructure from the protests and unrest, there is pressure on the interim government to manage fiscal resources carefully while also preparing for elections and restoring services.

 

Detailed Explanation of the Appointment and Agenda

Swearing-in and Cabinet Composition

·       On 15 September 2025, President Ram Chandra Paudel administered the oath of office to Rameshore Khanal as Finance Minister, alongside Kulman Ghising (Energy, Water Resources & Irrigation) and Om Prakash Aryal (Home, Law & Parliamentary Affairs). The move was recommended by PM Karki.

·       Khanal succeeds Bishnu Prasad Paudel, who had served under the previous administration until its collapse.

Policy Priorities and Early Moves

Rameshore Khanal has already signalled a shift toward tighter fiscal discipline and reform:

·       He has proposed to raise NRs 100 billion (Nepal Rupees) by trimming or cancelling politically driven or poorly planned projects.

·       A three-member taskforce, coordinated by the Chief of the Budget Division, has been formed to rationalise existing and new projects, especially in view of funding elections within six months.

·       Priority is given to repairing public buildings damaged during recent protests (e.g. Singha Durbar complex, ministry offices) and ensuring essential government operations can resume.

Challenges & Legal/Regulatory Framework

·       The budget for the current fiscal year includes allocations for development (over NRs 400 billion in some estimates), but the existing budget did not anticipate the cost of reconstruction, election administration, or damage from unrest.

·       Khanal will need to navigate existing laws and regulations related to public procurement, public finance management, revenue collection (tax law), and transparency/anti-corruption frameworks.

·       He inherits responsibilities such as presenting an annual budget to Parliament (though under an interim government setting), overseeing the Department of Customs, Inland Revenue Department, Public Debt Management, and ensuring compliance with international obligations (e.g., regarding money laundering risk).

 

Impact Analysis

Below are who is likely to benefit or lose, and what the practical implications might be for various stakeholders.

Stakeholder	Potential Benefits	Potential Challenges / Losses
Government / Public Sector	- Restored credibility through technocratic leadership. - More efficient use of public funds. - Better coordination of damaged infrastructure repair and election funding.	- Tight budgets might mean cuts to politically popular programs. - Bureaucratic inertia or resistance to reform. - Short time frame before elections limits long-term planning.
Businesses / Private Sector	- Greater macroeconomic stability may improve investor confidence. - Reforms in tax policy and public procurement could reduce transaction costs. - Clarity about government priorities and regulatory environment.	- If tax or revenue collection is strengthened, businesses may face higher compliance burdens or increased taxation. - Disruption from government restructuring or cancellation of projects.
Taxpayers / Citizens	- More responsible use of public funds; fewer wasteful expenditures. - Faster restoration of services and repaired infrastructure. - Potential for better transparency and accountability.	- Possible cuts in subsidies, non-essential spending, or delays in certain programmes. - Short-term hardship may surface if reforms require austerity.
Auditors / Chartered Accountants / Financial Professionals	- Demand for compliance, audit and advisory services could rise. - Opportunities to contribute to reform efforts (procurement, revenue audits). - Need for expertise in public financial management and legal compliance.	- Increased scrutiny of accounts, possibly more rigid regulatory enforcement. - Tight deadlines and pressure in interim settings may strain capacity.

Regional & Macro Implications

·       Given Nepal’s status with grey-listing by the Financial Action Task Force (FATF) due to risks around money laundering etc., a credible finance minister with reform credentials could help improve international standing and maintain foreign aid / investment.

·       Stability in finance is crucial for macroeconomic indicators: inflation control, balance of payments, foreign exchange, and fiscal deficit.

 

Common Misunderstandings

·       Assuming Khanal is a politician party-affiliated – He is largely seen as a technocrat and civil servant, not active party politician. Many misunderstand his role as partisan.

·       Misreading the interim government’s mandate – It is not a full-term government; its job is transitional: holding elections, restoring stability—not launching large-scale long-term programmes.

·       Overestimating available fiscal space immediately – Because of damage, budget constraints, and need for urgent expenses, Khanal cannot immediately roll out large new expenditures; prioritisation and cuts will be necessary.

·       Believing that reform will be frictionless – Institutional resistance, political pressure, vested interests will slow or modify reform proposals.

·       Thinking that damage from protests only affects visible infrastructure – Many revenue offices, customs, sub-offices have been damaged, which impairs collection and enforcement operations.

Expert Commentary

“The appointment of Rameshore Khanal is a signal that Kathmandu recognises the urgency of economic repair. His technocratic background and recent reform recommendations position him to start cutting waste and restoring confidence. But given the compressed electoral time, the success will depend on whether emergency fiscal steps can be both bold and transparent.”
— Dr. Govinda Nepal, Economist, Kathmandu University.

From my experience, when a country transitions through interim governments after large-scale protests, the finance minister’s credibility often hinges on visible early wins—repair, transparency, targeted expenditure cuts. Khanal appears to be pursuing this path: filtering projects, forming task forces, addressing damaged public properties. These are steps in the right direction. However, the pressure to meet electoral promises may tempt political deviations from technocratic discipline.

 

Conclusion / Action Steps

Rameshore Prasad Khanal’s appointment as Nepal’s Finance Minister brings both opportunity and urgency. His credentials as a seasoned bureaucrat and reform advisor provide him the technical ability necessary to navigate the challenges posed by recent unrest, damaged infrastructure, and a compressed election timeline.

Going forward, the key actions to watch:

·       Project Prioritisation: Which infrastructure and development projects are kept, scaled back, or cancelled.

·       Revenue Mobilisation Measures: Changes in tax administration, closing loopholes, possibly adjustments in tax rates or policy.

·       Budget Adjustments: How the current fiscal year’s expenditures are reshaped to accommodate reconstruction and election costs.

·       Public Communication and Transparency: To maintain public trust, given the protests were driven by discontent over corruption and mismanagement.

If Khanal delivers visible fiscal discipline and growth in revenue without neglecting basic services, his tenure—even if brief—could reshape expectations ahead of the next full-term government.

 

FAQs

Q1: Who exactly is Rameshore Prasad Khanal?
A1: Rameshore Prasad Khanal is a Nepali economist, civil servant, and academic. He previously served as the Finance Secretary, chaired the High-Level Economic Reform Commission, holds a BCom and MBA from Tribhuvan University, and is an associate member of the Indian Cost & Management Accountants (ACMA).

Q2: Why was his appointment necessary now?
A2: His appointment follows mass protests (the “Gen-Z protests”) against corruption and political elites that toppled the previous government. An interim government was formed to restore order, prepare for elections, and initiate reforms. A technocrat like Khanal was seen as capable of stabilising finances and pushing for accountability.

Q3: What are the immediate financial risks Khanal faces?
A3: Among the main risks: insufficient revenue due to damaged tax offices; need to allocate urgent funds for rebuilding; balancing election-related expenses with day-to-day public services; managing public expectation while enforcing austerity or spending cuts.

Q4: What reforms has Khanal proposed or is likely to initiate?
A4: He has proposed cutting or cancelling politically driven/unprepared projects to free up roughly NRs 100 billion. He also formed a task force to prioritise projects, and is expected to focus on revenue collection, transparent budgeting, public procurement rules, and governance.

Q5: How will this appointment affect businesses and taxpayers?
A5: For businesses, clearer policy and procurement reform may reduce risk and improve efficiency. However, there may also be greater regulatory enforcement and possibly tax or compliance burdens. For citizens, expected benefits include better infrastructure repair and value for public spending. The flip side: some services or subsidies may be scaled back temporarily.

 

References / Sources

1.     Nepal picks three with reformist credentials for interim cabinet. Reuters.

2.     Rameshore Khanal takes charge of Finance Ministry during national crisis. Khabarhub.

3.     New Finance Minister moots project cuts to secure fund for election. Nepal News.

4.     Experienced bureaucrat takes charge of the national treasury. Nepal News.

5.     Rameshore Khanal Biography: Age, Career And New Finance Minister. Scovusca.