Former Finance Secretary Rameshore Khanal has called for a new wave of deep, home-grown structural reforms to restore investor confidence and put Nepal back on the path of accelerated economic growth.

Khanal, also the chair of the High-Level Economic Reforms Recommendation Commission, made the remark while delivering a keynote during the 9th NewBiz Conclave & Business Excellence Awards being held in Kathmandu. 

Khanal said that despite a rapid post-COVID recovery, Nepal has faced economic setbacks due to policy inconsistencies and governance failures. This has led to a widespread loss of confidence among the private sector and the general public.

“The private sector has been demanding bold reforms for more than two years,” said Khanal. "The government also recognises the urgency, which is why the High-Level Economic Reform Recommendation Commission was formed."

Khanal said the current economic environment mirrors the 1990s when Nepal undertook its first generation of liberal economic reforms. While those reforms—often guided by international norms—yielded results across banking, media, aviation, exports, and agriculture, Khanal stressed that the upcoming wave must be home-grown and designed for Nepal’s unique realities.

Read: Advancing Next Gen Reforms

“We decided not to accept any direct support from foreign agencies. Instead, we consulted widely—across sectors, provinces, and communities—to propose reforms that are both acceptable and implementable,” he said.

The commission submitted its final report to the Ministry of Finance earlier this year on April 11, offering an in-depth analysis of Nepal’s economic challenges and a sweeping set of proposals to stimulate recovery and long-term growth. It was formed on October 7, 2024, and began its work on October 23. It had earlier submitted an interim report to Deputy Prime Minister and Finance Minister Bishnu Paudel on December 9, 2024.

Click here to read our Khanal Commission-based reports

A Governance-Centred Reform Agenda

Khanal argued that no economic policy—regardless of how well-crafted—will work without tackling the root causes of poor governance and corruption. At the heart of this dysfunction, he said, is the way political campaigns are financed in Nepal.

“Addressing political financing is key to cleaning up governance. Unless this is fixed, policies and laws will continue to favour special interest groups, cartels, and syndicates,” he said.

He also highlighted the state’s persistent inefficiency in executing infrastructure projects, pointing to the extended closure of the Narayanghat-Butwal road section, a critical trade corridor, as a glaring example.

Legal Bottlenecks and Investment Climate

The Commission examined over 300 existing laws and found that many were outdated, control-oriented, or outright redundant. Khanal said more than a dozen laws need urgent amendments to make Nepal competitive for global investors.

“Some cement industry entrepreneurs told me they had to visit 37 offices just to get a factory up and running. That is not how you attract investment," he said. "We need world-class regulations that enable rather than obstruct."

Focus on Growth Sectors and Pragmatic Policy

Khanal listed agriculture, forestry, mining, hydropower, ICT, tourism, and social services as key growth sectors that face excessive red tape. He criticised overly rigid environmental clearance procedures that, paradoxically, are stricter for economic projects than for armed conflicts.

“Growth must come from either natural resources or human capital,” he said. "We're not using either effectively."

Encouraging Government Response

Despite early scepticism, Khanal noted that the government responded swiftly to the Commission’s recommendations. Within a week of submission, a secretariat-level task force was formed and an action plan was drafted.

The Government of Nepal has unveiled a sweeping 408-point action plan aimed at overhauling the country’s economic structure and public administration.

The ‘Economic Reform Implementation Action Plan, 2082’ was made public on Friday, May 23. It was drafted based on recommendations from the Khanal Commission. 

"We proposed 378 reforms; the government expanded on them, presenting an action plan with 408 measures. Nearly three dozen recommendations have already been incorporated into the budget and appropriation bill," he said.

He concluded his remarks on a hopeful note, emphasising that the reform process is ongoing and that stronger political commitment will be essential for sustained impact.

"The government, led by a coalition of the two largest parties, seems serious about implementation. There is hope," Khanal said.

Organised by New Business Age with Asian Paints as the title sponsor, the ninth edition of the NewBiz Conclave and Business Excellence Awards  recognise excellence in nine categories. The prestigious Lifetime Achievement Award will also be provided later in the day to an individual with exceptional contributions to the development of trade and commerce in the country.