Finance Minister Wagle announces end of ‘Elite Business Control’ over state mechanisms, vows to complete reform

KATHMANDU: Finance Minister Swarnim Wagle has declared that the era of a few business groups influencing Nepal’s state machinery is coming to an end, signaling strong policy and governance reforms ahead.

Speaking at the Inter-Governmental Fiscal Council meeting in Kathmandu on Thursday, Wagle said the government is actively working to free state structures from the control of “two to four business groups.” He warned that policy-level corruption and undue influence over state mechanisms will no longer be tolerated.

Addressing concerns about constitutional changes, Wagle clarified that the government remains committed to operating within the constitutional framework. He also highlighted economic disparities, noting that Bagmati contributes around 40 percent to the economy, while Karnali contributes only about 4 percent, underscoring the importance of federalism.

The minister announced a budget ceiling of Rs 1.89 trillion with a revenue target of Rs 1.48 trillion, assuring that allocations for provincial and local governments will not be reduced.

He also revealed plans to amend the Public Procurement Act to remove development bottlenecks, either through an ordinance or the upcoming budget. Additionally, 15 outdated laws have already been scrapped, with more set for repeal.

Wagle emphasized stricter accountability, warning ministries against misuse of funds, while also pushing for digitalization to enhance transparency. He added that future major infrastructure projects will be focused outside Kathmandu Valley to promote balanced development.

Here is the summary of the views he expressed at the program:

We have noted the concerns raised regarding long-term liabilities and internal debt. However, the fundamental point is that we are attempting to move away from traditional, incremental, and superficial reforms. We no longer have the luxury of maintaining the status quo. This government was elected with a massive mandate, and expectations are incredibly high. Even our opposition is offering us the “benefit of the doubt,” showing goodwill by saying, “Go ahead and do it, we will support you on good issues; why should we be divided when it comes to building the nation?”

Regarding the federal structure, since our party (RSP) does not hold positions in local or provincial governments, we are committed to working with everyone. We believe in the spirit of cooperative federalism. While we are at the center, we believe that many of the results we desire will be achieved through the implementation and allocation of resources at the local level.

At the federal level, we are addressing long-standing reforms that had been stalled. We are primarily focusing on three areas. The first is Good Governance. From day one, we have been ruthless in enforcing standards; you have even seen us dismiss ministers who failed to meet the benchmarks we set. This standard comes directly from the Prime Minister; he has set such a high bar that there is no room for us to deviate. This momentum is now reaching other state agencies, the bureaucracy, and security apparatuses. Previously, the entire country was held hostage by a nexus of political and vested interest groups. We are now taking action to break that cycle. The objective is to ensure that rules are fair for everyone. We are committed to ending the culture of impunity and establishing the rule of law. We are prepared to hold ourselves accountable first.

The second aspect of governance is micro-delivery, which is people-centric. The Prime Minister has made it clear: citizens should not have to stand in long lines or pay bribes. We are clearing the backlog by the end of Ashad (mid-July). All that was missing was political will, which we have now provided. I saw a report this morning that a resident in a remote village in Myagdi received their passport right at their doorstep. We are delivering on our promises through digitalization and by motivating our mechanisms to be service-oriented.

Our second priority is Economic and Sectoral Reform. We cannot afford to look backward; we must focus on how to move forward and fix what is broken. We have already started this from the Ministry of Finance. On my first day, I dissolved the Revenue Investigation Department, not to remove its core functions, but to prepare for them to be absorbed by other agencies. We have already symbolically repealed 15 archaic acts—some dating back to the 1950s—and we will repeal or amend dozens more through the upcoming budget. Where regulations are lacking, such as in the digital sector or data integrity, we will introduce new laws. We are planning a “Big Bang” approach to economic reform. We are also reviewing the Public Procurement Act to make it scientific, as the current delays in capital expenditure are embarrassing. Whether through an ordinance in a week or the upcoming budget session, we will reform it.

We are also focused on Transformative Infrastructure. We are planning highways that connect the Terai to the northern border. We are creating a “quadrangle” of connectivity—from the Nagdhunga tunnel to the Mugling-Pokhara road and the Narayanghat-Butwal section. My personal mantra during the election was to reduce travel distance and costs. We are studying how to attract private capital and create an enabling environment for it. We have recently registered a bill for alternative financing, which includes issuing project-specific bonds and diaspora bonds to pool resources from the NRNs and financial institutions like NIFRA and HIDCL.

The goal is to move beyond relying solely on the government’s limited capital expenditure by mobilizing external funds and fostering public-private partnerships. The mandatory condition for all of this remains zero tolerance for corruption and mismanagement. If we align our policies and budgets—federal, provincial, and local—we can achieve a synergy where one plus one equals three.

Currently, our economy is roughly 7 trillion rupees, or about 45-46 billion dollars. If we maintain a consistent real growth rate, we can reach a 100-billion-dollar economy in five to seven years. A 100-billion-dollar economy will have a different stature. We are moving away from an era where only a few “policy-captured” individuals benefited, toward a policy that lifts everyone. I encourage you all to align your local budgets with these governance, reform, and infrastructure priorities so that we can move upward together. We have already seen success stories in local innovation, such as in Lalitpur and Bharatpur, and we encourage healthy competition among all municipalities to follow these examples.