Key Recommendations from the Khanal Commission Report

Political & Legal Reform

• 1. Enact a new Political Party Act or amend the 2073 Act.
• 2. Limit political parties’ campaign spending and enforce financial transparency.
• 3. Ensure candidates use only registered, transparent funding sources.
• 4. Enhance audit mechanisms under the Election Commission.
• 5. Subject party accounts to the Auditor General’s review.
• 6. Establish mandatory quarterly income and expense reports for parties.
• 7. Promote internal democracy and candidate selection transparency.
• 8. Strengthen oversight of campaign finance.
• 9. Decriminalize defamation related to economic speech to encourage open dialogue.
• 10. Protect economic policy from political instability.

Federalism & Governance

• 11. Improve inter-governmental coordination (federal, provincial, local).
• 12. Build capacity of local/provincial institutions.
• 13. Clarify roles and responsibilities among three tiers of government.
• 14. Simplify fiscal transfer mechanisms to sub-national units.
• 15. Introduce performance-based grants for local bodies.
• 16. Promote shared infrastructure planning across tiers.
• 17. Decentralize project approval while maintaining quality standards.
• 18. Introduce legal ceilings on number of agencies at local level.
• 19. Create a federal governance reform task force.
• 20. Publish an annual “Governance Performance Index.”

Revenue & Tax Reform

• 21. Simplify Income Tax, VAT, and Customs Acts.
• 22. Improve coordination between Inland Revenue and Customs departments.
• 23. Use AI to detect tax evasion and misreporting.
• 24. Avoid redundant audits and reduce harassment by tax authorities.
• 25. Digitize all tax filing, refund, and inspection processes.
• 26. Amend laws to allow full tax deductibility of R&D expenses.
• 27. Eliminate tax on retained earnings.
• 28. Use data analytics to expand tax base.
• 29. Introduce a risk-based tax audit system.
• 30. Establish a central taxpayer grievance mechanism.

Energy & Infrastructure

• 31. Prioritize completion of large hydropower projects.
• 32. Address land acquisition issues in energy transmission.
• 33. Promote pumped storage hydropower technology.
• 34. Allow foreign investment in green infrastructure bonds.
• 35. Create time-of-use electricity tariffs (peak vs. off-peak).
• 36. Improve voltage stability to reduce appliance damage.
• 37. Expand rural electrification via decentralized solar grids.
• 38. Promote e-cooking and EVs to create electricity demand.
• 39. Reduce line losses through grid modernization.
• 40. Set a 10-year master plan for infrastructure development.
• 41. Encourage PPPs in urban infrastructure.
• 42. Provide viability gap funding for non-profitable but essential infrastructure.
• 43. Mandate periodic maintenance budgets in all infrastructure projects.
• 44. Use domestic capital and NRN remittances for infrastructure investment.
• 45. Complete delayed airports before approving new ones.
• 46. Halt new large road projects until current ones are finished.
• 47. Review feasibility of Budhigandaki and other mega-projects.
• 48. Promote railway and dry port development.
• 49. Integrate climate adaptation into infrastructure design.
• 50. Simplify acquisition and compensation for infrastructure land.

Agriculture & Rural Economy

• 51. Promote contract and collective farming models.
• 52. Encourage private agribusinesses through subsidies.
• 53. Expand irrigation to reduce rainfall dependency.
• 54. Develop agriculture commodity boards.
• 55. Streamline fertilizer supply chains.
• 56. Digitize land records and market information systems.
• 57. Launch a Farmer Welfare Fund.
• 58. Increase crop insurance penetration.
• 59. Encourage agro-processing and cold storage.
• 60. Integrate rural road and agro-logistics planning.
• 61. Provide concessional loans to commercial farmers.
• 62. Link farmers to export markets.
• 63. Increase extension services through public-private partnerships.
• 64. Promote women and youth in farming.
• 65. Modernize animal husbandry and veterinary services.
• 66. Support organic and climate-resilient agriculture.
• 67. Align agri-policy with land-use master plans.
• 68. Use satellite and AI for crop monitoring.
• 69. Implement zoning for specific agricultural regions.
• 70. Encourage e-marketing of agricultural products.

Industrial Policy & Trade

• 71. Identify 20 high-potential export items and support them.
• 72. Lower land and energy costs for industrial zones.
• 73. Create fast-track approval system for factories.
• 74. Allow FDI in residential real estate (over $200K).
• 75. Promote industrial clusters in provinces.
• 76. Establish Export Promotion Zones (EPZs).
• 77. Provide incentives for import substitution.
• 78. Simplify export documentation.
• 79. Create a National Industrial Promotion Board.
• 80. Provide fixed interest rate loans for 10 years to industries.
• 81. Promote digital manufacturing.
• 82. Encourage tech transfer partnerships.
• 83. Link industries with technical universities.
• 84. Mandate industrial waste recycling practices.
• 85. Provide tax holiday for 5 years for startups.
• 86. Build logistics hubs in border towns.
• 87. Promote 'Made in Nepal' certification.
• 88. Reduce customs clearance time to 24 hours.
• 89. Train customs officers in valuation and fraud detection.
• 90. Provide land pooling models for industrial development.

Financial Sector Reform

• 91. Implement credit scoring systems.
• 92. Allow peer-to-peer lending under SEBON.
• 93. Legalize crowdfunding and angel investment.
• 94. Encourage development of bond and derivative markets.
• 95. Reduce interest spread to below 4%.
• 96. Implement stress-testing for banks and cooperatives.
• 97. Regulate cooperatives to limit risky behavior.
• 98. Fix deposit interest rates to reduce volatility.
• 99. Create a financial ombudsman.
• 100. Improve digital banking and cybersecurity.
• 101. Enable e-KYC and biometric authentication.
• 102. Encourage capital adequacy improvement.
• 103. Phase out share pledges for margin loans.
• 104. Modernize the Nepal Stock Exchange.
• 105. Allow Non-Resident Nepalis (NRNs) to trade freely.
• 106. Introduce insurance-backed savings products.
• 107. Enable central bank-backed liquidity facility for co-ops.
• 108. Strengthen SEBON with autonomy and resources.
• 109. Promote green and sustainability bonds.
• 110. Integrate financial literacy into school curricula.

Digital Economy & Innovation

• 111. Government to prioritize domestic software procurement.
• 112. Allocate 10% of capital budget for tech R&D.
• 113. Promote AI, blockchain, and robotics startups.
• 114. Establish national innovation hubs in each province.
• 115. Introduce Startup Nepal Fund.
• 116. Streamline IT export approvals.
• 117. Enable e-invoicing across businesses.
• 118. Promote digital signature use nationwide.
• 119. Encourage cyber insurance products.
• 120. Invest in rural broadband internet.
• 121. Launch a National Data Infrastructure Policy.
• 122. Reduce customs on IT hardware imports.
• 123. Provide ICT curriculum from grade 6 onward.
• 124. Train teachers in digital tools.
• 125. Introduce online licensing and renewal portals.
• 126. Simplify VAT refund for digital exporters.
• 127. Encourage “Digital Agriculture” platforms.
• 128. Fund university-based incubators.
• 129. Establish tech parks with long-term lease options.
• 130. Promote open-source adoption in public institutions.

Human Capital, Labour & Social Protection

• 131. Raise retirement age to 60.
• 132. Streamline all social security payments with national ID.
• 133. Reorganize vocational training to match labor market needs.
• 134. Introduce “One Family, One Job” rural pilot program.
• 135. Expand apprenticeships in industry and agriculture.
• 136. Ensure health insurance coverage for all by 2085.
• 137. Review and index social security payments bi-annually.
• 138. Launch Youth Entrepreneurship Guarantee Scheme.
• 139. Reform school curriculum to include financial literacy.
• 140. Encourage returnee migrants to start SMEs.
• 141. Integrate soft skills in university curriculum.
• 142. Track labor market demand trends annually.
• 143. Provide startup training for rural women.
• 144. Digitize pension systems and portability.
• 145. Introduce job-matching platforms with verified employers.
• 146. Prioritize skill recognition for returnee migrants.
• 147. Allow part-time contracts in formal sectors.
• 148. Extend maternity and paternity leave coverage.
• 149. Encourage diaspora to support education endowments.
• 150. Launch National Human Capital Strategy 2082–2092.