When Nepal’s streets filled with angry young protesters and uncertainty hung over the country’s political future, the government that took charge had one mission: restore stability and hold elections.
In the middle of that tense moment, economist and former finance secretary Rameshore Khanal stepped in as Nepal’s finance minister under the interim leadership of Sushila Karki. The government had only six months to act before elections would bring in a new administration.
Now, with the election completed and a new government set to take office soon, Khanal looks back on those six months with a sense of quiet completion. Speaking exclusively to The Statesman, he said the task was never about headlines or dramatic reforms.
“Our goal was simple,” he said. “We wanted to conduct the election smoothly and responsibly. We were committed to that from the beginning.”
For Rameshore Khanal, the brief tenure was less about political drama and more about steady administrative work.
A government focused on finishing the job
Khanal said the interim government was careful not to create unnecessary political excitement or sensational decisions during a fragile period.
“The main thing was that we did not want to provoke anyone or create a sensational government,” he explained. “We had one responsibility; conduct the election properly. And we did it.”
Despite the limited time, he believes the administration managed to complete important tasks.
“Aafno kaam sampanna garein chhoto awadhi maa,” he said, meaning that he believes the government fulfilled its responsibilities in the short time available.
He pointed to several measures taken by the finance ministry during the period. These included simplifying customs procedures, improving the income tax system to make it more taxpayer-friendly, and introducing relief schemes for people affected during the Gen Z protest movement.
The protest had caused significant damage to property and led to loss of lives in some areas. Khanal said his ministry worked with other agencies to provide compensation and relief to those affected.
“The compensation and relief scheme for those who suffered losses has already been implemented,” he said.
Preparing the country for elections
The election itself was the central responsibility of the interim government, and Khanal says the administration treated that task as a promise.
“I had vowed to conduct this election,” he said. “That was my part.”
According to him, the government ensured there was no shortage of resources for the election process.
Nepal did not rely on international aid to organise the polls. However, Khanal said some countries offered assistance voluntarily.
“India, China and Japan extended support on their own initiative,” he said. “But we did not depend on foreign aid. We made sure nothing was lacking during the election.”
The government also worked under difficult financial circumstances, as the fiscal year had already begun before the interim administration took charge.
Cutting waste and scrapping weak projects
One of Khanal’s earliest announcements as finance minister was that poorly prepared government projects would be scrapped.
He believed Nepal could not afford to spend money on projects that lacked proper planning.
“We could not move ahead with unready and fragmented projects,” he said, reflecting on that decision now. “Every rupee had to be spent responsibly.”
During the six months, the finance ministry also focused on reducing unnecessary expenses within government departments.
Economic challenges and criticism
The interim government faced criticism from some quarters over slow economic growth and weak revenue collection.
Khanal acknowledged the criticism but said the government had inherited difficult circumstances.
“When this government was formed, two months of the fiscal year had already passed,” he explained. “Business activities were already slow.”
The country also faced natural disaster during the period.
“In October, floods hit Kathmandu and surrounding areas. There was a lot of damage,” he said.
Those events further slowed economic activity. Still, Khanal believes the government managed to rebuild confidence in the private sector.
Rebuilding trust with the private sector
One of the government’s priorities was restoring confidence among businesses.
According to Khanal, many entrepreneurs had become cautious because of strict financial audits and regulatory pressure in earlier years.
“Because of full audits, the private sector had become scared,” he said.
To address that concern, the finance ministry introduced measures aimed at making financial processes easier.
These included simplifying tax procedures, improving online payment systems, and streamlining customs clearance.
Khanal said the government tried to build a more cooperative relationship with businesses.
“You can call it a private-sector-friendly government,” he said.
Despite the disruptions caused by protests and natural disasters, he said the economy showed some positive signs.
According to Khanal, Nepal recorded 3.2 percent economic growth in the first quarter during the government’s tenure.
“In Nepal’s context, that is a good number,” he said.
Fiscal position and credit standing
Khanal also pointed to improvements in Nepal’s broader financial indicators.
He said aggregate government revenue has been increasing, and the country currently has reasonable fiscal space.
The government also worked to reduce unnecessary spending, which he believes helped maintain financial stability.
On the international front, Khanal said Nepal’s sovereign credit rating performance remained stable during the period.
Remittance concerns amid global conflict
Remittances remain one of the most important pillars of Nepal’s economy, but Khanal expressed concern about emerging global developments.
He emphasised that remittance income does not directly belong to the government.
“Remittance is not the government’s income. It is the income of individuals,” he said.
However, global conflicts could affect Nepali workers abroad.
He noted that tensions in the Gulf region and international conflicts, including the one going on in Iran right now, could affect employment opportunities for migrant workers.
“I have been hearing that Nepali people are losing jobs,” he said. “Will they return? We don’t know.”
Despite these concerns, he said Nepali workers have a strong reputation abroad.
“In foreign employment, Nepali workers are known to be hardworking and trustworthy,” he added.
Working through the FATF Grey List
Another challenge for Nepal’s financial system has been its placement on the Financial Action Task Force (FATF) grey list, which includes countries working to improve their systems against money laundering and terror financing.
Khanal said Nepal has made progress on several compliance factors during the past year.
“The country has improved in multiple areas,” he said, expressing hope that continued reforms will strengthen Nepal’s financial credibility.
A career built on reform
Khanal’s appointment as finance minister carried a strong message in Nepal’s policy circles.
Just five months before joining the interim government, he had chaired a high-level economic reform commission tasked with recommending ways to rescue the struggling economy.
When he became finance minister, he was effectively responsible for implementing some of the same proposals he had previously recommended.
His career in public service spans 31 years, including roles at Nepal Rastra Bank and later as finance secretary.
During his time in government, Khanal gained a reputation for integrity and reform.
He exposed the fake VAT billing scandal, strengthened tax collection systems, and took action to prevent misuse of public resources.
In 2010, he resigned after disagreements with then finance minister Bharat Mohan Adhikari. Outside formal government roles, he later served briefly as an unpaid adviser to former prime minister Baburam Bhattarai.
What’s next?
As Nepal prepares for its next political chapter, Khanal is watching the election results closely. He noted that current trends indicate a clear majority for the Rashtriya Swatantra Party.
If that result holds, he believes it could bring greater political stability.
“I hope this will provide some stability to the current situation,” he said.
When asked what’s next for him, he says he is not thinking about his personal future. “Politics is not my agenda,” he said, “It never was.”
“When the crisis happened, I could not say no,” he said. “I did my part. I hope I did it well.”