The Government of Nepal has unveiled a sweeping 408-point action plan aimed at overhauling the country’s economic structure and public administration. Among the key measures, the government plans to raise the eligibility age for the senior citizen allowance to 70 years—up from the current 68—and make possession of a National Identity Card (NID) mandatory to claim the benefit. Relevant authorities have been instructed to implement this policy shift within one year.
A significant institutional change includes the planned removal of private sector representatives from the board of directors of the Securities Board of Nepal (SEBON), the county’s capital market regulator, within a year. Currently, the board includes members from the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Institute of Chartered Accountants of Nepal (ICAN). The new structure will replace these with government officials such as the Revenue Secretary from the Ministry of Finance and a Deputy Governor from Nepal Rastra Bank.
At present, the SEBON board already includes the Secretary of the Ministry of Finance and an Executive Director from Nepal Rastra Bank. The new plan proposes further restructuring by adding subject-matter experts to the board, with the Ministry of Finance tasked with implementing the changes.
The government also intends to restructure the Nepal Stock Exchange (NEPSE). However, unlike SEBON, NEPSE’s reform will retain private sector ownership of shares, with necessary adjustments to be finalized within the next year.
Read: Reimagining Social Security
The ‘Economic Reform Implementation Action Plan, 2082’ was made public on Friday, May 23. It was drafted based on recommendations from a ‘High-Level Economic Reform Advisory Commission’ formed under the coordination of former Finance Secretary Rameshore Khanal, which submitted its report on April 11.
Following a Cabinet decision on April 15, a separate Action Plan Formulation Committee was formed under the coordination of Chudamani Paudel, Secretary for Governance Affairs at the Office of the Prime Minister and Council of Ministers. Other members included Govinda Bahadur Karki (Commerce and Supplies Secretary), Krishna Bahadur Raut (Industry Secretary), and Dinesh Kumar Ghimire (Revenue Secretary).
Read: Unlocking Alternative Finance
The committee developed a sector-specific and ministry-wise roadmap based on the commission’s recommendations. It emphasizes the roles of provincial and local governments in successful implementation. Reform timelines range from six months to three years.
Legislative Repeals and Legal Overhaul
As part of the action plan, the government intends to repeal 14 ‘outdated laws’, including Income Ticket Charge Act, 1962, Black-marketing and Some Other Social Offenses and Punishment Act, 1975, Private Forest Nationalisation Act, 1957 within two years.
Read: Making Nepal Remote Work-Ready
Fiscal and Administrative Restructuring
The plan envisions aligning administrative functions with Nepal’s federal structure. A unified account system incorporating expenditures from federal, provincial, and local governments is to be implemented within a year. Similarly, an integrated project banking information system for all three levels of government is also expected within the same timeframe.
Several national pride projects, including the Lumbini Development Fund and Pashupati Development Fund, will be delisted within six months.
Read: Outward FDI: Opening the Gates
Tax reforms include broader anti-evasion provisions under the VAT Act and a reduction in the number of items subject to excise duty—limited to products harmful to public health and the environment. These changes are targeted for completion within a year.
A flat 10% income tax will apply to export income, and government-owned enterprises are to be transformed into public limited companies within a year.
Privatization and Asset Management
Identifying the Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Engineering Consultancy Service Centre, National Construction Company Nepal, and Nepal Orind Magnesite as institutions that have failed to sustain their operations, the government plans to formally liquidate these enterprises and take control of their physical assets for repurposing into more productive uses.
Read: High-Level Commission Calls for Structural Overhaul to Revitalize Economy
Similarly, Nepal Airlines Corporation is set to be restructured within two years by onboarding a strategic external partner for professional management. The Dairy Development Corporation will also be converted into a public entity with a presence in all provinces.
Financial Sector Reform and Inflation Control
The government aims to reduce the operational costs of the banking system and narrow the interest rate spread between loans and deposits within a year. Development of a bond market is also planned within the same period to address interest rate volatility.
To manage inflation, the plan targets reduced government spending and lower indirect tax rates over the next year.
Implementation and Monitoring
The committee emphasized that the action plan translates “implementable recommendations” into concrete measures. Ministries are required to prepare detailed, milestone-based implementation strategies and integrate them into their annual programs.
The Office of the Prime Minister and Council of Ministers will oversee the monitoring and evaluation process. The Ministry of Federal Affairs and General Administration will coordinate with local governments, while the Prime Minister’s Office will liaise with the provinces.
(With inputs from RSS)
