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The government recently issued two saving bonds worth Rs 3 billion, not to invest in development projects but simply to repay installments and interest on existing loans. Nepal’s public debt has been rising sharply, exceeding Rs 2.67 trillion as of July 2025, with the debt-to-GDP ratio reaching nearly 43.7%. A large share of this liability is external, and debt-servicing obligations are placing increasing pressure on the national budget.

This burden accelerated after the adoption of the federal structure in 2015. Operating provincial governments has created substantial additional expenditure, and Nepal’s domestic revenue is insufficient to cover these costs. As a result, most of the annual budget is consumed by general administrative expenses, leaving little for development. This pattern is economically unsustainable.

If Nepal were to dismantle the federal system, the government could save a significant amount of money—resources that could instead be directed toward development projects capable of generating returns and expanding employment opportunities. Such reallocation would offer the economy a much-needed corrective path. All political leaders, economists, and administrators understand this reality, yet few speak openly about it. One reason may be their reluctance to oppose federalism, a system that many believe was encouraged by foreign powers despite being ill-suited to a small nation like Nepal.

It is also no secret that the current constitution—introducing secularism, republicanism, and federalism—was heavily influenced by Western actors who sought to shape Nepal’s political course. Critics argue that these changes served external interests by keeping Nepal economically dependent and its leadership perpetually vulnerable to foreign influence—an updated form of imperialism. India, too, played a central role by drafting the 12-point agreement in 2005, which brought together the seven parliamentary parties and the Maoists, ultimately paving the way for Nepal’s current political structure.

The political instability Nepal faces today is rooted in that agreement and the externally driven transformations that followed. In this critical moment, every Nepali—leaders, experts, administrators, and citizens—must be honest with the nation. Only by acknowledging past mistakes and prioritizing national interest can Nepal begin to restore stability and chart a more self-reliant future.