National Independent Party's Economic Blueprint: Focus on Middle-Class Growth and Digital Governance Amid Fiscal Challenges

Kathmandu. The National Independent Party (NIP) has secured a near two-thirds majority in the House of Representatives elections. Having campaigned with the declaration to make Balen Shah the Prime Minister and securing a mandate close to a two-thirds majority, the NIP government appears likely to be formed within the next 1-2 weeks. There is significant public interest regarding the economic policies of the upcoming Balen government.

The NIP has outlined its economic policies in its Citizen's Charter and Manifesto. In the Citizen's Charter published before the election, the NIP stated its adoption of a liberal economic policy with social justice and plans to expand the middle class. Given the current low per capita income, the NIP government's policy will aim to make Nepal a 'nation with a respectable middle income' by maintaining an average annual economic growth rate of 7% (at constant prices) and targeting a per capita income of at least $3000 and an economy size of $100 billion (at current prices) within five to seven years. The NIP's Citizen's Charter mentions a guarantee of 'integrated social security' based on need from birth to death, access to modern banking and financial services for all citizens, and the end of exploitation by microfinance and cooperatives operating under strict regulation.

The upcoming NIP government will adopt policies focused on connectivity for a competitive economy, including quality road and air networks, a reliable energy grid, and the expansion of affordable high-speed internet to all settlements. The policy includes achieving an installed electricity capacity of 15,000 megawatts, constructing 30,000 km of national highways, and completing 10 'signature projects' of national importance. The NIP government's Citizen's Charter also states policies for Nepalis living abroad, including online voting rights, continuity of lineage-based citizenship, implementation of a sovereign diaspora fund, an environment for safe investment and dignified return, and a policy for dignified foreign employment.

The NIP had stated in its manifesto that public services would be delivered online rather than through queues. The NIP stated in its manifesto: 'To strengthen national records and digital good governance, we will provide National Identity Cards to all Nepalis residing in Nepal and build an integrated database. Through this, we will strengthen the national record management system, making service delivery, social security, and public policy implementation data-driven to build a reliable foundation for good governance. We will end the hassle of citizens having to visit office after office, stand in line, rely on intermediaries, and have unnecessary direct meetings with employees to obtain government services. To ensure transparency, access, and accountability, we will approve and strictly implement a time-bound action plan for digital service delivery.'

The NIP has adopted a policy to reform the structure of the Revenue Tribunal and abolish the Department of Revenue Investigation. Since the NIP has committed through its manifesto to build a skilled professional unit dominated by Chartered Accountants for corruption control, revenue investigation, and monitoring, the government's policy is expected to follow suit. The NIP has also announced that within 100 days of forming the government, it will start returning savings to small depositors to secure the hard-earned money of ordinary citizens. For this, the NIP is preparing to establish an 'Integrated Savings Security Fund' from the state to secure depositors' earnings, which will prioritize payments to small depositors from distressed institutions.

It stated in its manifesto: 'Our objective is not just to jail the operators, but to return the depositors' money. Therefore, in line with the policy of resolving issues by 'listening rather than jailing,' if the operators or management of any cooperative financial institution are ready to return the depositors' money and have a reliable source and plan, we will facilitate a legal path for a 'settlement.' In such a situation, we will give them the opportunity to manage assets and recover loans while remaining outside of custody, by setting a full guarantee and timeline for the return of savings.'

What is the country's economic condition?

While the NIP is set to form its own government with a two-thirds majority in a few days, the state of the country's treasury is not very satisfactory. The recently published Nepal Rastra Bank's 'Macroeconomic Report-2026' indicates ample liquidity in the banking system, but the investment environment is weak, resulting in sluggish credit flow to the private sector. In the first six months of the fiscal year 2082-83, deposits in banks and financial institutions increased by 5.7%, or NPR 417.48 billion, reaching NPR 7,681.35 billion.

Due to the inability to disburse loans, more than NPR 1.2 trillion in deposits remains locked up in banks and financial institutions. Meanwhile, the government is not collecting revenue as expected and has also failed to spend the budget. According to the Office of the Auditor General under the Ministry of Finance, while the government targeted revenue collection of over NPR 1,533 billion in the current fiscal year, it has only collected NPR 735 billion so far. Expenditure is high compared to income. The government has already spent over NPR 893 billion from the total budget so far. This suggests that the incoming government will face severe resource pressure in the coming days. There appears to be a significant financial shortfall in implementing the promises announced by the NIP.