AGP Executive Report

Judicial Independence & Diplomacy: Nepal’s Chief Justice Sharma arrived in India for an international UN trade-law conference, underscoring Kathmandu’s push to rebuild a “new judiciary” amid fresh international concern over political interference in Supreme Court appointments. Aviation & Mobility: Nepalgunj–Pokhara direct flights were suspended again, pushing passengers toward monsoon-risk road travel as fuel costs and weak demand bite. Public Finance: Nepal’s public debt rose 11.25% in FY2025-26 to Rs 2.974 trillion, with debt-to-GDP climbing to 45.07% even as the IMF flags low distress risk. Economic Diplomacy: Foreign Ministry says country-specific economic diplomacy strategies are underway with 20 partners, while PM Shah met industry groups to expand export markets. Governance & Services: Foreign Ministry says passport-system glitches will be fixed gradually; Rapti Academy started grievance hearings for better hospital transparency. Legal/Policy Watch: Government sought suggestions for a hydrogen vehicle policy framework; equivalency certificates are delayed due to pending regulations. Regional/International: Nepal–Korea signed two MoUs worth USD 11.8m for agri value chains and legal information services; US delivered USD 1m in maternal and child health equipment.

Electricity Regulation: Dr. Ram Prasad Dhital has been reappointed as Chair of Nepal’s Electricity Regulatory Commission and took the oath along with new members, restoring experienced leadership while one female seat remains vacant. Constitutional & Legal Reform: A constitutional committee report is drawing controversy after opposition parties questioned its recommendations, including changes affecting the Judicial Council’s composition and a referendum proposal. Infrastructure & Transport: Japan’s Nagdhunga Tunnel is highlighted as a major Nepal-Japan infrastructure milestone, with traffic management plans for thousands of vehicles. Disaster Response: Monsoon rains and landslides have blocked nine road sections and disrupted major highways, forcing night-time closures and reroutes. Education Governance: The Education Minister says the government will work closely with the private sector to improve education and regulate education consultancies, while seeking feedback on health amendment bills. Economy & Trade: Nepal’s trade deficit jumped 16.63% to Rs 1.781 trillion as imports outpaced exports. Digital Crackdown: NTA shut down 223,568 online betting apps and websites. Foreign Relations: Nepal and Korea signed two MOUs worth $11.8m for agricultural value chains and legal information access. Politics & Appointments: Finance Minister Swarnim Wagle vows to end political interference in civil service postings and transfers.

Everest Porter Support: Nimsdai Foundation opened the Lobuche Porter House, a new accommodation facility for Everest-region porters, designed for up to 100 people and inaugurated with international trekkers and local communities. Party Politics & Democracy: CPN-UML chair KP Sharma Oli said major parties must protect constitutional democracy and warned against “new and old” narratives sparking controversy, while NCP coordinator Pushpa Kamal Dahal called for unity among progressive forces to safeguard republican gains. Monetary & Trade Rules: Nepal Rastra Bank revised foreign exchange rules to allow Indian Rs 200/500 notes (with limits) and clarified cross-border currency movement; customs data also shows foreign trade rose 15.88% in FY 2025-26, with Birgunj leading trade flows. FATF Grey List Push: Finance Minister Swarnim Wagle told tax officials to improve transparency and voluntary compliance to help Nepal exit the FATF Grey List. Energy Governance: Dr. Ram Prasad Dhital was reappointed ERC chair, and IPPAN met India’s ambassador to discuss cross-border electricity trade. Organic Agriculture Drive: PM Balendra Shah directed domestic certification of organic production and steps to curb chemical fertilizers and pesticides. Telecom Ownership Tension: Ncell urged the government to review disputed 25-year licensing/ownership conditions to protect investment and service continuity. Education Autonomy: Education Minister Sashmit Pokharel called for ending party influence at TU and ensuring academic autonomy. USAID Fallout: AP reports transgender aid workers in Nepal turned to sex work after USAID cuts eliminated jobs.

Diplomacy & Party Politics: PM Balendra Shah’s “one-on-one” diplomatic rule appears to be changing as he prepares separate meetings with India and China envoys, while domestic politics stays tense with Nepali Congress factions hardening positions and the Bagmati coalition shaken after UML withdraws support. Parliament & Governance: Attendance at parliamentary sittings is low, with PM and senior leaders repeatedly missing sessions; meanwhile, a minister’s decision to send his own secretary to a UN Habitat event instead of the ministry secretary has sparked internal friction. Youth Protest & Rights: Five youths were arrested after chanting “Down with Nepo Baby!” at TU, demanding merit-based university governance and an end to political interference. Public Finance & Policy: Cabinet extended fee waivers and incentives for international flights via Pokhara and Gautam Buddha airports to mid-September 2028, aiming to revive low turnout; the government also implemented an amended procedure for interest grants on concessional loans to curb misuse. Disaster & Safety: Heavy rain and landslides blocked major highways across seven districts; separate reports also note NEA compensation for an electric shock victim and bird flu declared under control with no new cases since July 17. Energy & Economy: NEA begins RCOD extension process for 218 hydropower projects, and energy minister calls for better coordination across federal, provincial and local levels.

Nepal Sanskrit University: Prof Dr Bhim Prasad Khatiwada was sworn in as the newly appointed Vice Chancellor of Nepal Sanskrit University in Kathmandu, pledging to strengthen research and quality in arts, literature, culture and religion. Judicial probe & accountability: The government formed a judicial inquiry committee headed by former High Court judge Keshav Prasad Bastola to investigate the self-immolation death of Ganesh Nepali, with a report due within seven days. Telecom regulation: Nepal’s Supreme Court cleared the way for the Axiata–Spectrlite UK deal over Ncell shares by dismissing a writ petition, directing the Nepal Telecommunications Authority to decide under telecom rules. Economy & consumer policy: Cabinet approved withdrawing the 3% equity tax on private education and health sectors after public backlash; lawmakers also debated regulating hotel room rates under the Integrated Tourism Bill, drawing pushback from hoteliers. Trade & infrastructure: Cargo rail from Kolkata to Biratnagar is expected to cut transport costs and time for traders and industrialists. Sports & culture: SAFF confirmed the Men’s Championship in Bangladesh (Nov 4–17) but Nepal’s participation hinges on FIFA lifting ANFA’s suspension; NC marked BP Koirala Memorial Day with a Green Run and announced a Humanitarian Welfare Fund. Regional politics: India’s “Cockroach” youth protests continued amid police action and fresh violence near Parliament Street, with internet disruptions reported.

LDC Graduation: ECOSOC has recommended that the UN General Assembly decide on Bangladesh and Nepal’s request to extend their LDC graduation preparation period by three years, pushing the target to November 2029. Tax & Public Services: Gen-Z activists in Nepal are protesting taxes on basic services like education and healthcare, arguing the burden hits daily survival. Budget Execution Push: Nepal’s Finance Ministry issued a 47-point directive to ministries and agencies to speed up fiscal-year budget implementation, curb waste, and improve capital spending and procurement discipline. Election Commission Confirmations: Parliament’s hearing committee has set July 28-29 for hearings on the proposed Chief Election Commissioner and two Election Commissioners. Flood Disruptions: Heavy rain and landslides have blocked or partially disrupted major highways, with night movement restrictions in flood-prone stretches. Political Tensions: Former PM Sher Bahadur Deuba says he will oppose “retaliation” politics and warns of pressure on the judiciary and constitutional bodies. Bagmati Coalition Shake-up: CPN-UML ministers in Bagmati Province have resigned and withdrawn support from the ruling coalition. Infrastructure & Trade: Cargo rail has arrived at Biratnagar customs yard, boosting the Morang-Sunsari industrial corridor; officials and industry say policy and cost reforms are still needed for sustainability. Monsoon Governance: The government has started reviewing public holiday policy, citing service delivery delays, and formed a task force to propose revisions within 25 days. Media Oversight: Nepal Television’s satellite bandwidth procurement probe report has been sent to the PMO and CIAA for further action. Health & Society: Dr. Govinda KC announced a 22nd hunger strike over unaddressed demands in medical education and health services.

Equity Tax Reversal: Nepal’s government has withdrawn the 3% equity tax on private education and health after backlash, with PM Balendra Shah saying it would not be implemented “for now,” while NC President Gagan Thapa welcomed the move and urged review of other “impractical” taxes like VAT on electricity. Digital Governance Push: The Cabinet unveiled sweeping digital governance reforms—services to be faceless, fully digital, transparent and time-bound—directing agencies to restructure via time-and-motion studies and integrate systems under a national digital platform. Education Policy & US Ties: Education Minister Sasmit Pokharel met the US Chargé d’Affaires to discuss deeper cooperation in education, technical-vocational training and sports, while also meeting private school bodies to strengthen stakeholder participation in reforms. Energy & Trade: IPPAN met India’s ambassador to discuss expanding cross-border electricity trade and hydropower cooperation; MCC work also advanced with completion of 46 transmission towers under the MCC Nepal Compact. Landlessness Management: The Land Problem Resolution Committee began a process to relocate displaced landless squatters from Kathmandu Valley back to home districts via a 35-day public notice. Women’s Rights & Justice: Women Minister Sita Badi held talks with hunger striker Binu Yadav, discussing health treatment, livelihood support and forwarding other issues to relevant bodies. Political Signaling: NCP Coordinator Prachanda said a new leftist collaboration environment is forming, with talks also underway with Nepali Congress on provincial power-sharing.

Bilateral Security: BIMSTEC national security chiefs met in New Delhi and agreed on practical maritime guidelines for humanitarian assistance and disaster relief, plus principles for maritime law enforcement interactions—an incremental step as regional competition in the Bay of Bengal grows. Tax & Social Policy: Prime Minister Balen Shah said the government will not implement the 3% equity fee on private education and health for now, after Finance Minister Swarnim Wagle consultation, citing added burden on ordinary people. Economy & Trade Facilitation: Nepal’s rail cargo push advanced as a cargo train reached Biratnagar directly from Kolkata with third-country mustard, enabled by revised Nepal–India transit treaty protocols. Local Governance: Thirteen local levels failed to publish their budgets on time, while federal authorities also directed district and local officials to stay at duty stations amid monsoon disaster risks. Justice & Institutions: The Supreme Court halted Kathmandu District Court’s plan to split benches, and set concerns over ambiguous cross-border motor insurance clauses, urging IRDAI to standardise coverage language. Energy & Industry: Energy officials issued survey permits for 99 hydropower projects (and permits for solar projects), while the PM pledged support to expand Nepal’s readymade garment/textile sector using domestic raw materials. Public Services: Kathmandu University vice-chancellor selection moved forward as 35 applications were approved for shortlisting. Health & Consumer Compliance: The government launched a bill-receipt incentive lottery to boost tax compliance, and reports highlighted gaps in health insurance coverage for inpatient treatment. Infrastructure Disruptions: Heavy monsoon rains blocked major highways at multiple points, with night driving restrictions in flood-prone stretches.

Budget Execution Push: Finance Minister Dr Swarnim Wagle directed ministries to move fast on implementing the 2083/84 budget, while the Finance Ministry issued detailed guidelines for provinces and local levels—requiring procedures to be published, limiting new financial liabilities, and tightening rules on consulting and supervision. Capital Market Fix: PM Balendra Shah met market stakeholders and promised action to revive Nepal’s capital market, including investor morale, clearer tax handling, and rules around margin lending—amid political chatter over Finance Minister Wagle’s role. Governance & Regulation: Communications Minister Dr Bikram Timilsina urged tighter coordination with the private sector to make advertising cleaner under the National Advertising Policy 2083, and the Commerce Department warned of strict action against illegal trade on physical and digital platforms. Disaster Response: Minister Dr Timilsina coordinated rescue, relief and damage assessment efforts in Nuwakot after monsoon-related incidents increased. Territorial Symbol Row: Cabinet approved replacing the controversial map on the one-rupee coin with the Lo Ghyakar (Ghar) Monastery image. Trade Logistics: A new cargo train brought mustard containers from Kolkata to Biratnagar, extending rail-based third-country imports to eastern Nepal.

Madhesh Economic Push: Madhesh Province says it wants to lift its GDP contribution to 13% by expanding production, tourism, and private investment, and plans an investment summit for FY 2026/27 after last year’s event was derailed. Administrative Overhaul: The government’s secretaries meeting approved 22-point reforms, including a “one-door service” model for high-footfall offices and a grievance system aimed at resolving 100% of complaints on time. Public Staffing Controls: Government offices can’t create new staff positions this fiscal year without Prime Minister’s Office approval, with plans to redeploy excess staff. Land Rights Deadline: The National Land Commission has issued a “final” call for land management applications for landless Dalits, squatters, and unorganized residents from 66 local levels, giving 35 days from July 19. Capital Market Watch: NEPSE rose 1.55% to 2719.24 points as PM Balendra Shah met capital-market stakeholders; trading hit Rs 5.51 billion. Health Fee Backlash: A 3% “Health Equity Fee” on private hospital treatment has come into effect, drawing criticism over higher patient costs. Budget Implementation: Finance Minister Swarnim Wagle has begun budget implementation discussions with key ministries for FY 2083/84. Transport System Disruption: Transport authorities are migrating databases and updating tax rates, suspending non-essential transport services in Bagmati for about a week.

Parliament & Governance: The HoR Finance Committee held talks with bankers and financial stakeholders on the Nepal Rastra Bank Act amendment bill, as lawmakers weigh changes to central bank autonomy and banking governance. Constitution & Law Reform Debate: UML General Secretary Shankar Pokharel warned the government’s reported plan to amend over 150 laws could be used to expand state power, while NC President Gagan Thapa urged constitution-amendment debate anchored in good governance and federalism. Child Rights Oversight: The HoR Law, Justice and Human Rights Committee directed ministries to prepare practical action plans to protect children in correction homes and asked for immediate alternative arrangements due to congestion. Monsoon Disruption: Flooding and landslides hit highways nationwide; night vehicle bans were imposed on key routes, traffic resumed on Hetauda–Kathmandu after earlier restrictions, and the Bagmati River rose above warning level at Gaurighat. Security & Regional Cooperation: BIMSTEC security chiefs endorsed maritime law-enforcement guiding principles and HADR guidelines, with Nepal among member states. Political Developments: UML chief KP Sharma Oli accused the government of betraying loan-sharking victims again, while Prachanda’s provincial power-sharing talks were postponed after Madhav Nepal fell ill. Infrastructure: The Sisnekhola–Nagdhunga tunnel will open first for emergency vehicles, then expand in phases.

Money Laundering Case Review: RSP lawmaker Govinda Panthi has demanded an impartial institutional review of the investigation and prosecution in the Bishnu Paudel money laundering case, questioning reliance on statements from Shriram Towa directors and pointing to the Special Court’s release order while recovery of Rs 209 million is sought. Parliament Training Push: CPN-UML is training its MPs to strengthen their parliamentary role, with KP Oli and other senior leaders briefing lawmakers on committee work and party policy coordination. Party Ideology Messaging: Nepali Congress President Gagan Thapa said NC is built on ideology and sacrifice, not power, as he unveiled a statue of veteran leader Krishna Prasad Bhattarai (Kishanji). Central Bank Autonomy Debate: The HoR Finance Committee discussed a bill to amend the Nepal Rastra Bank Act with bankers and financial stakeholders, focusing on strengthening the monetary system. Hydropower Deadline Extensions: NEA plans to extend RCOD deadlines for stalled hydropower projects by classifying them into four groups based on progress and PPA obligations. Electricity VAT Fallout: Finance Minister Wagle’s “no end-consumer price increase” promise is being tested as 5% VAT on electricity for domestic users over 50 units has come into effect. Monsoon Disruption & Safety: NDRRMA has warned of heavy to extremely heavy rainfall, ordered nighttime vehicle suspensions in 23 districts, and directed movement only after road-risk assessment. Tourism & Economy: Bardiya National Park saw a slight visitor decline amid unrest and West Asia travel impacts, while Madhes Province plans an investment summit and cuts ministries to nine from July end. Health Crisis: Radiotherapy services at Sushil Koirala Prakhar Cancer Hospital in Banke have been disrupted for nearly three months after a LINAC failure, forcing patients to seek treatment in India. Consumer Justice: Nepal’s Consumer Court says it settled over half its cases in its first year, including major compensation rulings.

Health Policy: Health Minister Nisha Mehta visited the National Ayurveda, Panchakarma and Yoga Centre in Budhanilkantha and urged it to be developed as a “Centre of Excellence,” including better publicity and support for medicinal herb production. Judiciary & Governance: The Supreme Court issued a mandamus ordering Kathmandu Valley waste management reforms, including a coordination committee led by the Chief Secretary and mandatory waste segregation at source. Public Finance: Nepal Rastra Bank introduced loan rescheduling and restructuring for construction entrepreneurs, easing pressure where projects are completed or ongoing but payments are pending. Local Safety: Kathmandu DAO issued a travel alert amid red-flag monsoon rainfall risks; Makwanpur also suspended night-time movement on key routes. Infrastructure & Transport: Nagdhunga–Sisnekhola tunnel is set for trial/operation with an RFID-based modern toll system, while Rasuwa Timure customs trade is back to normal but a Chinese-funded dry port remains stalled. Economy & Tax: Electricity VAT rules kick in from July 17—5% on household consumption above 50 units and 13% for non-household users. Politics & Civil Society: NC and UML leaders paid tribute to veteran civil society figure Dr Devendra Raj Pandey, who died at 87.

Federalism Under Strain: A new analysis warns Nepal’s provincial system is being hollowed out by traditional parties’ power games, turning provinces into “chess pieces” and risking the federal structure’s credibility. Political Opposition & Governance: RSP leader Hikmat Jung Karki met Young Republicans chair Hayden Padgett in Dallas, discussing stronger Nepal–US party ties and economic cooperation. Democracy Watch: Civil society stalwart Dr. Devendra Raj Pandey died at 87; Prachanda and NC President Gagan Thapa praised his role in the peace process, republican establishment, and civic freedom. Stock Market Pulse: NEPSE logged its strongest weekly gain in months, rising 2.95% with turnover jumping 48.5% to Rs29.19bn. Transport & Trade: Nepal launched direct rail cargo from Kolkata to Biratnagar under the transit treaty, expanding third-country rail access beyond Birgunj. Infrastructure: Nagdhunga Tunnel is set for trial operation from July 27, with tolls planned after the trial. Public Administration: Govt ended contract hiring for new posts and shifted retired contract staff into a centralized pool. Local Heritage: Churiyamai Tunnel management was handed to a local committee for conservation and visitor operations. Security & Borders: A woman from Uzbekistan was arrested at the India–Nepal border in Bihar for allegedly using a forged Indian Aadhaar card. Media & Procurement: A probe into Nepal Television satellite bandwidth procurement flagged irregularities worth over Rs206m. Economy & Industry: PM Balen Shah met footwear manufacturers over smuggling and promised a task force to curb under-invoicing.

Central Bank Autonomy Debate: Finance Minister Dr. Swarnim Wagle and NRB Governor Dr. Bishwanath Poudel pushed for Nepal Rastra Bank’s independence as MPs questioned the government’s proposed NRB Act amendments—especially clauses on governor qualifications, “cooling” periods, and board structure—amid calls to keep monetary policy insulated from politics. Loan Shark Crackdown: After a nine-point deal, loan-sharking victims suspended a nine-day “Justice March”; the government pledged to criminalise predatory lending, invalidate fraudulent debt documents, and draft a special bill within three months for a tribunal and victim property return. Court Watch: Nepal’s Special Court ordered former Finance Minister Bishnu Paudel’s release for regular court appearance in the money-laundering case. Economic Governance: Comptroller General data showed FY 2025/26 revenue and spending targets missed, with capital expenditure especially weak. Monsoon Disruptions: Six highways were blocked by floods and landslides, with movement restrictions on key routes. Agriculture & Environment: The agriculture minister flagged pending legal reforms, fertilizer availability, and stalled forest-guard recruitment; lawmakers urged linking forest policy to production and the economy. Trade & Logistics: A first rail cargo service began between Kolkata and Biratnagar, aiming to expand containerised imports via eastern Nepal. Public Health: A three-month dengue awareness campaign kicked off with “Clean Friday” and community clean-up drives.

Telecom & Digital Access: Nepal Telecom expanded 4G to remote villages in Mugu (Soru-6, Sorukot) and Bajura (Neta Bichchhya-1, Kuwadi-5), promising faster internet, better voice and SMS for scattered settlements. Public Finance & Tax Burden: New fiscal-year taxes start today, including a 3% health equity fee on private care and higher levies across education, healthcare, electricity, gold/silver, ridesharing, casinos and luxury hotels—raising costs for households. Health Policy: A three-month dengue awareness drive begins, with “Every Friday, Clean Friday” and local clean-up of mosquito breeding sites led by municipalities and wards. Medical Sector Reform: Prof. Dr. Govinda KC warns of a renewed hunger strike if medical education and health services are not freed from commercial influence by July 21. Energy & Investment Climate: Nepal Rastra Bank says it has eased financing rules for hydropower and energy infrastructure; meanwhile, industry leaders stress transmission and distribution must grow in parallel with generation. Governance & Regulation: The government appointed four new members to the Nepal Telecommunications Authority and urged stronger, transparent regulation. Anti-Corruption/Justice: A charge sheet was filed at the Special Court against former Finance Minister Bishnu Paudel and others in a money laundering case, seeking Rs 209 million recovery. Labour Migration: Nepal’s caregiver recruitment for Israel continues, with additional employment opportunities announced and candidates set to travel in batches from September 2026. Regional Security: BIMSTEC security chiefs, with NSA Ajit Doval chairing, pledged stronger cooperation against terrorism, cyber threats and maritime challenges.