Padma Shamsher was appointed the hereditary prime minister of Nepal on November 29, 1945. His formal inauguration was not held until June 1946. On the 12th day of his rule, December 10, 1945, however, Padma Shamsher declared, “I regard myself as the servant of the nation.”His voice emotional with these words, and to the people who assembled to hear him, it foreshadowed the reform that was coming in the Rana rule during his tenure. None of the Rana prime ministers had ever used such an extraordinary expression, as it indicated that the people were sovereign and democratic rule would be maintained in the governance of the country. Padma Shamsher certainly broke the ice by stating that the prime minister, despite being a hereditary chief executive, is still a public servant.

Padma Shamsher's declaration was made in the large assembly of officials and the general public at the Tundikhel grounds, where he outlined the policy and objectives of his administration. His predecessor, Juddha Shamsher, was prime minister for 13 years, between1932 to 1945. The new prime minister demonstrated his desire to facilitate a momentum, particularly a newness, to the current affairs. In a country that had not yet developed an elected parliament or deliberative house, Padma Shamsher wanted to deliver the policies and programmes to the general public in an open assembly. This communicated to the people that change was eminent.

In the British tradition, the opening of the parliament, of which the Ranas were already knowledgeable, marks the formal beginning of the parliamentary year, and the King's Speech, which Padma Shamsher contemplated delivering, sets out the government’s agenda for the upcoming parliamentary session and outlines the proposed policies and legislation. In Britain, it is the only regular occasion when the three constituent parts of Parliament – the Sovereign, the House of Lords and the House of Commons – meet. That Padma Shamsher wanted to follow this indicated a possible shift in constitutional traditions (even though Padma was not the king, and the Tundikhel was not the parliament).

As part of his new policies and programmes, Padma Shamsher prioritized certain changes, including educational reforms, transportation facilities, development of industries and pay raises for public servants. According to historian Adrian Sever, Padma Shamsher emphasized the need to invest in educational facilities in order to facilitate Nepal’s development and, likewise, announced his plans to establish a nationwide network of primary schools. He also promised the development of transport facilities, industry and the plans for the expansion of the ropeway, railway and road networks in Nepal.

In order to please the military, I. R. Aryal & T. P. Dhungyal have noted, Padma Shamsher added a cost of living allowance to military personnels’ basic pay and declared pay raises for junior officer corps and the lower echelons of the civil service. Additionally, at subsidized prices, civilians could buy rice at the rate of twelve and a half pice per ‘mana’ and the military at ten pice per ‘mana’. This arrangement pleased both the civilians and the military. But the people of the Tarai became increasing discontent, as they had to pay a certain amount of paddy in their payment of revenue. However, Padma Shamsher did not address this concern Additionally, he announced that from mid-March to mid-August, the government offices would open from ten to five and, for the month of mid-August to Mid-March, from eleven to four. Due to this measure, civil servants were pleased to some extent, and these reforms were not large challenges for the government.

Later, Padma Shumsher called a conference of the landlords of Nepal for consultation regarding agricultural reform and related issues. They discussed the means whereby the economic condition of the Terai region could be improved. As the Tarai was relatively open and vulnerable to political influence from India, the government was anxious to ensure the stability of the region by securing the continued support and cooperation of the landed class. The landed class, in turn, requested the prime minister to sanction wood for the purposes of embankments of the rivers, digging canals, irrigation and other such matters. The Muslim population of Tarai asked for licenses to enable it to sell its grains and other foods.

During his tenure, Grishma Bahadur Devkota has noted, Padma Shamsher operationalized elections of the municipalities and established the Nepal Literature Council; additionally, the ordinary people were allowed to keep radios at their houses. The publication of the Gorkhapatra, the oldest newspaper of Nepal, was increased from twice a week to thrice a week. A new feature, "Letter to the Editor," was also introduced to the newspaper. The common people were allowed to comment on the activities of the civil servants in this column. On private initiatives, literary magazines were also allowed to be published. The government provided financial support to magazines like “Sahitya Shrot.”

In terms of relations with the state and international relations, Padma Shamsher introduced some additional reforms as well; for example, by easing restrictions on the royal family, King Tribhuvan was allowed to travel to India for medical purposes with his two younger sons, Prince Himalaya and Prince Basundhara. Additionally, Padma Shamsher also sent the Director General of the Industrial Development Board to the United Provinces and Punjab in order to study their industrial contexts. For increased relations with India, China and the United States, Padma Shamsher extended goodwill missions to Calcutta, Washington and Nanking in order to confer various orders and decorations.

Still, despite Padma Shamsher’s efforts to please his people, anti-establishment movements were ongoing, and public unrest and dissatisfaction against the Ranas continued to increase. According to Professor Ram Kumar Dahal, under the leadership of BP Koirala and other Nepalese youths and with the support of Indian socialist leaders (including Jaya P. Narayan and Ram Manohar Lohia), the Akhil Bharatiya Nepali Rastriya Congress (All India Nepali National Congress) was established on October 31, 1946. The party even received congratulatory messages from leaders of the Indian Congress Party (ICP) during its conference in Bhawanipur, Calcutta on January 25-26, 1947. Then in Nepal itself, Nepali National Congress (NNC) was established with the purpose of supporting the Indian National Movement (INM) and introducing a liberal democratic system under a constitutional monarchy. After his release from jail since 1941, founder Tanka Prasad Acharya of the NNC was elected as its first president, BP Koirala as its acting president and B.C. Sharma, Dilli Raman Regmi, GP Upadhaya, Krishna Prasad Bhattarai and Rudra Prasad Giri as its members.

The establishment of the NNC in India inspired other sects of Nepalese people to revolt against the dictatorial Rana rule. Inspired by the NNC, the workers of the Jute and Cotton Mill in BP Koirala’s hometown of Biratnagar demanded an improvement in the condition of factory workers, leading to a general strike on March 4, 1947; during this strike, BP Koirala’s two brothers, Tarini Prasad Koirala and Girija Prasad Koirala, Man Mohan Adhikari and others were particularly active in exploiting the situation in their favour. BP Koirala and other workers reached Biratnagar and conducted a peaceful labour strike, which served as a test case for the newly-established party’s organizational strength against the Ranas in bringing the political issues to the forefront.

The Padma Shumsher government, in the course of suppressing the strikes, sent 250 military men to Biratnagar, and when they reached on March 25, 1947, they arrested top-ranking leaders of the NNC, including BP Koirala, Girija Prasad Koirala, Tarini Prasad Koirala, Man Mohan Adhikari as well as leaders of the Indian Socialist Party. Matrika Prasad Koirala continued leading the strikes after the arrest of the top-ranking leaders.

These firings and arrests had a great impact on the mindset of the Nepalese people. The NNC, in its executive meeting in Calcutta, threatened the Rana rulers that they would organize a countrywide people’s movement if the government did not stop its oppressive measures and release its leaders. However, the Rana government paid no heed to their threatening demands and instead jailed three Koirala brothers, MM Adhikari and others.

The NNC and others, in order to ratify the executive decision regarding the call for a nationwide movement, called its conference on April 9-10, 1947, in which 125 representatives from various parts of the country participated enthusiastically. The party conference decided to launch a nationwide movement on April 13, 1947. Accordingly, the Anti-Rana Movement was launched in various parts of the country, but focused on Biratnagar, Birgunj, Janakpur, Illam Nepalgunj and in three towns in the Kathmandu Valley.

Padma Shumsher’s declaration of constitutional reforms on May 16, 1947 became breaking news. He called a general meeting at his Bishal Nagar palace and announced that they were going to have a constitutional government in Nepal, which led to the dissolution of the ongoing NNC movement.

As noted by constitutional lawyer Ganesh Raj Sharma, initially, the Indian government attempted to echo the British way of adjusting with the Rana regime, which was by accommodating each other's interests. With Padma Shamsher in his confidence, Indian Prime Minister Jawaharlal Nehru pressurized Nepali politicians in exile to forego the agitation in favor of cooperating with Padma Shamsher’s three-tiered partyless Panchayat system. Then, during the time Padma Shamsher announced the basic outlines of his reforms on 28 May, 1947, Nehru had an interesting conversation with M.P. Koirala and Ganesh Man Singh, NNC leaders at the time.

According to Sharma, an excerpt from the recorded advice of Nehru sheds light on the strategy adopted by India towards the political forces in Nepal: "How could you assert that your movement may not create more power to reactionaries? They may be bent to undertake any stringent measure and if they fall upon your movement relentlessly, this would mean complete setback of your toddling movement. If you call it off now and divert your energy in consolidating your power, expand your propaganda among the masses, you could be better equipped for your next struggle. Calling off does not mean you stop it forever. If you find that the government is not sincere and she had not given what she had declared, you could launch your movement again."

Nehru emphasized, "Would it not be better if you let us to be stronger? The Nepal government has extended her hand of friendship towards us. You know other nations are also eager to exploit her to their benefit but India must not give that chance, she must take it. That is what I want and for this I have suggested to stop the movement for the present. Besides, Nepal government has sent objections regarding the base of your movement in British India. To give shelter to the politicians is a different thing and underground work also can be overlooked. But open bases to launch movement against one independent country is quite different thing. That is, however, significant at present but under heavy pressure our position will be rather delicate."

Padma was considered a simple and credulous person. After his appointment as prime minister, he refused to move into Singha Durbar, the official residence of the Prime Minister, despite pressure from his family members and senior officials to do so. He ran his prime ministership from his relatively modest residence at Bishalnagar and, three times a week, he visited Singha Durbar to attend to business.

Ultimately, on January 26, 2048, Padma Shamsher, the self-declared "servant of the nation" made another important announcement regarding constitutional changes. Given the enormous pressure, Padma Shamsher's liberal personality and his determination to push forward (despite the unwillingness of most of the Ranas), the first Constitution of Nepal known as Government of Nepal Act was promulgated.