Kathmandu: Former Finance Minister Rameshwor Khanal has presented a comprehensive reform roadmap, highlighting four key structural problems holding back Nepal’s economic growth.

Speaking at an economic symposium organized by Barakhari Media, Khanal said that despite being rich in natural resources, Nepal’s citizens continue to face economic hardship due to policy failures and institutional weaknesses.

He identified fiscal inefficiency as the first major issue, noting that less than 55 percent of the allocated capital budget is utilized. The second challenge is Nepal’s inability to exercise an independent monetary policy because of its fixed exchange rate with the Indian rupee. Third, banks and financial institutions are overly focused on real estate and trade rather than productive sectors. Lastly, weak governance and cumbersome administrative systems have discouraged investment.

To address these issues, Khanal proposed establishing a National Infrastructure Implementation Agency to ensure timely execution of key projects. He believes this could increase capital expenditure to 90 percent within three years. He also suggested simplifying the business registration process from 17 days to just 5 days through digitalization and making the “single-window system” for foreign investment more effective.

Khanal further emphasized the need to reconsider Nepal’s fixed exchange rate regime, suggesting a shift toward a “crawling peg” or “managed float” system to boost exports and strengthen monetary flexibility. He also called for formalizing the informal economy through digital payments, mandatory PAN implementation, and a more scientific tax system, especially in the real estate sector.

In terms of financing, he recommended moving beyond traditional budgetary support toward project-based concessional loans and conducting a sovereign credit rating to access international capital markets. He stressed that addressing challenges such as youth migration and capital flight will require strong political commitment and institutional discipline.

Concluding, Khanal expressed confidence that if these reforms are implemented effectively, Nepal could achieve an annual economic growth rate of 8–9 percent over the next decade and emerge as a clean energy hub in South Asia through hydropower exports, agro-processing, and digital services.