The sweeping victory of the Rastriya Swatantra Party (RSP) in the March 5 election has given it a rare and historic political mandate. A party formed barely three years ago securing a near two-thirds majority is nothing short of a political fairy tale in Nepal’s turbulent democratic trajectory. This outcome has decisively altered the domestic balance of political power in RSP’s favour.
With government formation imminent, attention is now shifting from electoral momentum to policy delivery. The performance of the incoming administration will be measured against the commitments outlined in its Promise Paper (Bacha Patra), which serves as the party’s election manifesto. Among its most striking features is the centrality accorded to digital transformation. The term “digital” appears twenty-three times in the hundred-point document, an indicator that technological modernization sits at the core of the party’s governing vision.
Promise Paper outlines a comprehensive digital agenda. It proposes a transition to digital service delivery across government, and identifies institutional tools such as tippani.gov.np and paripatra.gov.np to streamline administrative procedures. The document also commits to enabling digital company registration, reducing direct interface between applicants and officials in routine administrative procedures. These initiatives are situated within the architecture of present Digital Nepal Framework. The manifesto further speaks of transforming Nepal’s economy into a digital one, encouraging cashless transactions and linking the country with seamless and efficient payment gateways.
RSP’s most consequential electoral pledge relates to the future scale of Nepal’s information technology sector. The Promise Paper visualises expanding the industry into a USD 30 billion sector within the next decade. As an expression of ambition, the target reflects a broader global reality. Digital services have become one of the few sectors through which smaller economies can integrate into the global knowledge economy without the constraints traditionally associated with geography or industrial scale.
But the manifesto also claims that Nepal’s IT exports already amount to roughly USD 1.5 billion. This figure is difficult to substantiate. Industry estimates generally place the sector’s exports closer to USD 1 billion, while official statistics from Nepal Rastra Bank indicate a significantly smaller figure of roughly USD 300 million in recorded service exports. The origin of the USD 1.5 billion estimate remains unclear and cannot be independently verified.
Such numerical exaggeration is not uncommon in electoral politics. Campaign documents often stretch figures to convey optimism about a sector’s future potential. When such estimates appear in written policy commitments, however, they risk distorting the policy baseline from which the sector’s actual growth must be assessed.
Two-day Huawei Digital Nepal Conclave 2022
Taken together, these commitments project an image of technological ambition. Yet the feasibility of this transformation ultimately depends on the strength of the infrastructure on which it rests.
At present, the foundations of Nepal’s digital ecosystem are fragile. Across most urban centres, internet cables snake along electricity poles, creating visual clutter while leaving networks exposed to disruptions caused by weather, construction activity, or routine maintenance. A serious digital transformation agenda would require the gradual undergrounding of these networks and the modernization of the national fibre backbone. While such efforts have begun in limited form, progress remains painfully slow.
Digital connectivity has nonetheless expanded over the past five years. Internet penetration has increased rapidly. Despite digital platforms becoming more integrated into everyday economic activity, high-speed connectivity stays uneven in quality and reliability. Digital governance systems cannot function effectively when bandwidth fluctuates across districts, institutions, and even government offices.
Cybersecurity represents another structural vulnerability. In January this year, a hacker group claiming links with Durga Prasai alleged that several government websites were so poorly designed that they resembled classroom level projects. Whether exaggerated or not, the episode highlighted the institutional weakness of Nepal’s digital security architecture. Expanding digital systems without strengthening cybersecurity infrastructure risks exposing the state to escalating technological threats.
Digital transformation therefore rests on two parallel foundations. The first is robust digital public infrastructure. The second is credible cybersecurity capacity capable of protecting digital systems as they expand.
The experience of Estonia provides a useful comparative example. The Baltic state today is widely regarded as one of the world’s most advanced digital states. When the country began creating its digital architecture in the late 1990s, its economy was small and still emerging from the disruptions of the post-Soviet transition. At that time, its GDP stood at roughly USD 6 billion, far smaller than many countries that now look to it for inspiration.
Estonia’s transformation did not occur through rhetorical commitments alone. The government invested systematically in the institutional foundations of digital governance. It established a universal digital identity system, built interoperable data exchange infrastructure, and expanded nationwide broadband connectivity. Over time, these investments created an integrated ecosystem in which most public services could be delivered online. Today Nepal and Estonia share a similar nominal GDP of roughly USD 49 billion, illustrating that smaller economies can achieve substantial digital transformation when institutional commitment and sustained investment align.
The central lesson is straightforward. Digital states are not built through slogans or technological enthusiasm. They emerge out of long-term investment in infrastructure, regulatory architecture, and institutional capacity.
Nepal has taken some preliminary steps in this direction, which means the new RSP government will have a foundation to stand on. In recent years the government has explored cooperation with international partners including the World Bank and the Asian Development Bank to fund the basics of digital governance. These partnerships have supported projects related to digital identification systems, online administrative services, and broader institutional reform.
However, the scale of these initiatives is modest when compared with the national need and RSP’s ambitious election pledge. If the incoming government under Balendra Shah intends to translate the digital vision into credible policy, the most immediate signal would be a clear financial commitment. A dedicated investment of at least NRs 10 billion within the next fiscal year would represent a realistic starting point. Such resources could support the undergrounding of fibre networks in major urban centres, modernization of government data architecture, and expansion of the national cybersecurity initiatives.
Given the size of Nepal’s national budget, such an allocation would be manageable. More importantly, it would demonstrate that digital transformation is being treated as a structural policy priority rather than a campaign slogan. Sustained investment would also create the conditions necessary for collaboration with the private sector and international partners.
Digital transformation is often imagined in terms of applications (apps), platforms, and technological breakthroughs. In practice, the most critical components of a digital state tend to stay largely invisible. They lie in the reliability of networks, the security of databases, the resilience of infrastructure, and the institutional competence required to manage these systems.
Without these foundations, promises of building a multi-billion-dollar IT industry or turning Nepal into an exporter of artificial intelligence will be reduced to a pipe-dream. With them, Nepal could gradually develop a credible digital economy capable of supporting both governance reform and private sector innovation. The direction the new RSP government chooses will determine whether its digital promise brings about structural transformation or remains an empty political declaration.
(The author is a software engineer at Ambition Guru and Digital Governance Fellow at Asia Dialogue Initiative Kathmandu.)
