Q&A: Policy flip-flops and ‘midnight changes’ are eroding public trust

Former Finance Secretary Vidyadhar Mallik on why systemic policy flip-flops, entrenched special-interest exemptions, and outdated infrastructure continue to erode public trust and compromise Nepal’s economic governance.

Nepal’s annual budgetary process has increasingly transformed from fiscal planning into a battleground of political friction and interest-group manoeuvring. The recent rollout of the federal budget has been quickly overshadowed by intense scrutiny over ‘midnight changes’ to tax lines, pushing the integrity of the Ministry of Finance back into the crosshairs of parliamentary debate. By bypassing formal legislative scrutiny and using the annual Financial Act to implement ad-hoc tax holidays and major structural shifts, the state continues to compromise predictability for investors. Meanwhile, the administrative machinery remains tethered to outdated infrastructure, attempting to manage modern digital economies with tools from a past era.