In the Girija Prasad Koirala-led cabinet formed in 2048, he was given the responsibility of Minister of Land Reforms. Known as an ideal leader, he, Jagannath Acharya, was adamant that BP should follow the path embraced by him. In the 1950s, the importance of cultivable land was many times greater than it is now.

There was no such thing as barren land. Not only in the city, but also in the villages, there were many families who could not cultivate their fields. That is why Minister Jagannath used to say in his speeches, ‘BP abolished Birta, now we must effectively implement the land reform program.’ He had announced that he would establish tenant farmers’ rights, provide land to squatters, and bring more land than was legally encumbered in the name of industry under legal jurisdiction.

For almost two years after the government was formed, he was seen as very active for land reform. At that time, the issue of land was very urgent. Because land was considered a very important asset . The slogan of land reform and giving land to squatters was very popular in politics . Slogans of land rights were also written on the walls during elections . Slogans like "Ghar Ghaderi" (Build a house for those who do not have a house), "Ghar Ghaderi" (Build a house for those who do not have a house), "Ghar Ghaderi" (Build a house for those who do not have a house) and "Bhoomi Nath" (Build a house for those who own a house) were used on the streets .

Jagannath wanted to break the perception that the Congress, being a party of the rich, only stands on the side of the landlords . That is why he was known as a 'land leader' in the Congress . He is compared to Bhim Bahadur Tamang of Dolakha and is discussed as a leader with a peaceful and clean image . 

The problems raised by Jagannath Acharya at that time regarding the rights of tenants, the rights of the Guthi and the rights of the industries have not been resolved yet . Just as the issue of Giribandhu of Jhapa has been raised now, he had said at that time that the issue of land restrictions should be resolved by making a law . 

But he could not agree with Prime Minister Koirala on the issue of land reform in the then cabinet. He resigned from the ministry in 2050 Baisakh, saying that the land reform work he was trying to do was not progressing. He had announced his resignation from the ministry saying that he had not been able to implement the 'revolutionary land reform plan' for the benefit of the people. In his resignation letter, he mentioned that he had not been able to carry out revolutionary land reforms and had not received political support while working. His resignation was also linked to internal conflict within the Congress.

He was close to Congress President Krishna Prasad Bhattarai and Supreme Leader Ganeshman Singh. Koirala used to remind him not to rush into bringing a land policy. Koirala had said that bringing new laws at a time when the country was moving towards a liberal economic policy would have a negative impact on the economy. But Jagannath had resigned from the ministry, saying that it was hindering the work he was trying to do. He used to understand the people's property as land. Land was very important at that time.

Jagannath, who had been disagreeing with the Congress government and especially Girija Prasad Koirala's style of work, was expelled from the Congress party without even being an ordinary member. Laxman Prasad Ghimire, the Chief Secretary of the Congress Office, published a press release on 28th Shrawan 2053, informing that Jagannath had been expelled for three years. He was accused of engaging in anti-party activities, holding meetings in districts against the party's policy and code of conduct, and announcing the formation of a new party.

Jagannath had said that he would gather representatives from 55 districts on 20th and 21st Bhadra 2055 and announce the formation of a new party. He had said, 'I do not want to stay in the Congress because the Congress has abandoned BP's socialism.' He had said that he was not surprised by his expulsion from the party. He said, ‘Their main differences are because the Congress has abandoned democratic socialism. The party had behaved unjustly against them.’ He had said that he himself wanted to leave the party and would not resist.’