Between the 1981 and 1986 elections, there was a growing rift among the pancha. Without a viable economic and political program, disillusionment with the panchayat system increased. In the face of a deteriorating economy, faltering development plans, and the failure of the panchayati raj to inspire motivation and confidence in an already demoralized bureaucracy, the credibility of the government waned. The banned political parties, especially the Nepali Congress Party, after initial efforts at reconciliation, concentrated on organizational work and the demand for political pluralism. Most political activities, however, were noticeable only within the panchayat system itself. Appointed in 1983, the new prime minister, Lokendra Bahadur Chand, had a no-confidence motion filed against him immediately after taking office. The motion was declared inadmissible on the grounds of errors in drafting, but this power struggle among different groups of pancha further undermined the panchayat system.

The uneasy political stalemate was upset when in late May 1985, the Nepali Congress Party, in preparation for the 1986 election, decided to launch a satyagraha (civil disobedience) campaign--in which many communists also participated--to demand reforms in the political system. A large number of Nepali Congress Party activists were quickly arrested. Although the campaign generally lacked popular support, it received considerable attention and interest among intellectuals and students, caused tension within the government, and further divided the already fractured panchayat. Kathmandu also was subjected to violence, including explosions that rocked the royal palace and other key buildings. There was further discontent when, at the panchayat workers' annual congress, the moot issue of government accountability to the legislature was disallowed from discussion.

In a politically charged atmosphere, the second quinquennial nationwide election to the Rashtriya Panchayat was held in May 1986. Slightly more than 9 million voters cast their ballots for 1,584 candidates for 112 seats. According to official sources, 60 percent of all eligible voters participated in the election.

The election was marked by a lack of enthusiasm, which partly reflected the Nepali Congress Party's boycott. A few communist factions contested the election. About 20 percent of the candidates were elected either on the basis of their roles as champions of the opposition or for their stand against the elite. Allegations of electoral malpractice also were widely voiced. The electoral success of forty-five Chettris and Thakuris, sixteen Hill Brahmans, and seven Newars indicated that the traditional power structure remained largely unaffected. Marich Man Singh Shrestha, a Newar, was appointed prime minister. Three women were elected to the Rashtriya Panchayat from the Tarai Region, but no Muslims were elected.

Data as of September 1991