RSP set to form majority government; Balendra Shah likely to become PM by late March

KATHMANDU: Nepal’s political landscape is poised for a major shift as the Rastriya Swatantra Party (RSP) moves closer to forming a near two-thirds majority government following the completion of vote counting in the first-past-the-post category of the House of Representatives election. With the party securing a decisive mandate from voters, preparations have begun for the formation of a new government led by Balendra Shah, widely known as Balen.

The party had contested the election by projecting Shah as its prime ministerial candidate. With the vote count confirming an overwhelming public mandate, RSP leaders say the new government formation process will begin soon, with Shah expected to lead the parliamentary party and subsequently assume the premiership.

Government Formation Likely by Late March

According to party insiders, RSP plans to formally elect its parliamentary party leader by Chaitra 5, 2082 BS (March 18, 2026 AD). Following this step, President Ram Chandra Paudel is constitutionally expected to appoint the leader of the majority party as prime minister.

Nepal’s Constitution provides a clear framework for government formation under Article 76(1), which states that the President shall appoint the parliamentary party leader of the majority party in the House of Representatives as the Prime Minister.

Officials familiar with the process say the new government could be sworn in within the first week of Chaitra 2082 BS (mid- to late-March 2026 AD) once the final election results are formally announced and parliamentary procedures are completed.

Internal Consultations Intensify Within RSP

Senior RSP leaders have begun internal consultations on the composition of the new cabinet. Discussions are reportedly underway between party chairman Rabi Lamichhane and senior leader Shah regarding the selection of ministers and the structure of the upcoming administration.

Party sources say the leadership is inclined to appoint subject-matter experts and technocrats rather than traditional career politicians. The strategy reflects the party’s campaign promise to introduce competence-based governance and reform Nepal’s administrative system.

Newly elected lawmakers from the party are also reportedly seeking ministerial positions. However, some senior figures within the party have urged restraint.

Party Leaders Urge MPs Not to Lobby for Ministerial Posts

Just two days earlier, RSP leader Asim Shah publicly appealed to party lawmakers not to engage in lobbying or pressure tactics to secure cabinet positions.

In a statement posted on Facebook, he urged restraint and discipline within the party ranks.

“There is no need to lobby, make recommendations, conduct media trials, or run campaigns to become a minister,” Shah wrote. “Once Balendra Shah is appointed Prime Minister, he will personally select his cabinet team. He knows the qualifications and capabilities of all MPs very well.”

Asim Shah is widely considered one of the key facilitators behind the political cooperation between Lamichhane and Balen Shah.

Interim Government Signals Smooth Transition

The outgoing caretaker administration appears to be preparing for a smooth transition of power. Officials say the current government has refrained from making long-term policy decisions or appointments that could bind the incoming administration.

RSP leaders had earlier urged the interim government to avoid major policy decisions that might have lasting implications for the country’s governance or economic direction.

In a symbolic gesture reflecting the transition period, caretaker Finance Minister Rameshwor Prasad Khanal returned his official diplomatic “red passport” to the Ministry of Foreign Affairs on Tuesday, signaling the winding down of the caretaker administration’s tenure.

Election Results Indicate Strong Majority for RSP

The vote count for the first-past-the-post (FPTP) electoral system has already concluded, while counting under the proportional representation (PR) system is nearing completion.

Based on the current counting trends, RSP is projected to dominate both systems, consolidating a powerful parliamentary majority.

Projected proportional representation seat distribution:

RSP – 58 seats

Nepali Congress – 19 seats

Communist Party of Nepal (UML) – 16 seats

Communist Party of Nepal – 9 seats

Janamat Party / Shram Sanskriti bloc – 4 seats

Rastriya Prajatantra Party – 4 seats

In the direct election category, the results are already finalized:

RSP – 125 seats

Nepali Congress – 18 seats

CPN-UML – 9 seats

CPN – 7 seats

Labour-Culture bloc – 3 seats

Rastriya Prajatantra Party – 1 seat

In addition, renowned social entrepreneur and technologist Mahabir Pun has been elected as an independent candidate.

Once the proportional representation tally is finalized, the Election Commission Nepal will formally allocate PR seats based on the total votes secured by each political party.

Swarnim Wagle Emerges as Leading Candidate for Finance Minister !

As cabinet discussions intensify, economists and political observers are closely watching speculation surrounding the Finance Ministry.

Economist and RSP leader Swarnim Wagle has emerged as a leading candidate for the powerful portfolio.

During the election campaign, party chairman Lamichhane had publicly asked Wagle to begin preparing the budget framework for the upcoming fiscal year—an indication of the party’s confidence in his economic leadership.

Wagle, a respected economist with experience in international development and Nepal’s economic policy circles, is widely seen as a technocratic choice capable of steering Nepal’s fiscal reform agenda, strengthening economic governance, and restoring investor confidence.

Expectations for Policy Reform and Economic Governance

The potential formation of an RSP-led majority government has triggered significant expectations among business leaders, investors, and policy analysts who are hoping for structural reforms in governance, public finance, and anti-corruption measures.

Observers note that if Shah becomes prime minister, the administration could represent a generational shift in Nepali politics, bringing new leadership, technocratic governance models, and reform-oriented policy priorities.

For Nepal’s business community and international investors, the key questions now revolve around the new government’s approach to fiscal policy, economic reforms, regulatory transparency, digital governance, and investment climate improvements.

As final election results are confirmed and constitutional procedures unfold in the coming days, attention will remain focused on the formation of the new cabinet and the policy agenda of what could become one of the most transformative governments in Nepal’s recent political history.