All Three Government Levels Must Allocate Budgets for Reconstruction of Structures Damaged in the Janajati Movement

March 16, Kathmandu – Following the widespread physical and economic damages caused by the protests held on September 8 and 9 across various parts of the country, the government has unveiled a detailed action plan for reconstruction and rehabilitation.

Based on a report by a committee led by Dr. Prakash Kumar Shrestha, Vice-Chair of the National Planning Commission, the plan details the extent of damage, reconstruction strategies, resource management, and private sector revival. It also includes budget allocation strategies for reconstruction by all three government tiers in the current and next two fiscal years.

The Commission has devised a phased approach for reconstruction activities grounded in immediate, medium-term, and long-term strategies. Priority has been given to mobilizing internal resources as the primary basis for reconstruction.

The policy dictates that each government level should advance reconstruction using their own resources, with the federal government stepping in to assist if resources are insufficient. Coordination with private sector and non-governmental organizations is a key strategy in the rebuilding efforts.

According to Dr. Diwakar Luintel, spokesperson for the National Planning Commission, both short-term and long-term plans must be prepared for damaged structural reconstruction, with budgets allocated accordingly.

“Some initiatives have already begun using the current fiscal year’s budget. Discussions are ongoing to ensure the next fiscal year’s budget also allocates specific funds for reconstruction caused by the Janajati movement damages. The aim is for all government levels to prioritize this in their upcoming budgets,” he said.

The action plan emphasizes developing service-friendly, cost-effective, and disaster-resilient infrastructure to reduce future damage. The federal government estimates that approximately NPR 434 million will be required in the current fiscal year, with an estimated NPR 1.018 billion annually for the following two years.

For provincial governments, an estimated NPR 81.25 million is needed this year and NPR 146 million annually for the next two years. Local governments will require NPR 142 million this year and about NPR 321 million each year subsequently.

All three government levels have adopted policies to carry out initial repairs with existing budgets, utilize current vehicles and assets, and only procure new items when necessary. Additionally, mandatory insurance coverage for all government properties has been proposed.

The government aims to mobilize resources for reconstruction through strict expense management. Measures include cutting small, stalled, and ineffective projects, with projects costing under NPR 3 million not to be undertaken by the federal government but transferred to provincial and local levels.

Programs previously managed by the federal government, such as small enterprise development, public housing, and asbestos-free roofing initiatives, are planned to be devolved to local governments. The government also plans to raise funds for the reconstruction through development partners and non-resident Nepalese, with policies to recognize contributors.

The private sector suffered significant impact during the protests as well. Of the total damage exceeding NPR 3.3 billion, commercial establishments bore the greatest brunt with losses of about NPR 2.749 billion, while individual households endured approximately NPR 600 million in damages. Structural analysis shows that 45 percent of damages were to buildings and houses, 5.5 percent to vehicles, and the remainder to other assets. Insurance claims amounting to about NPR 2.3 billion have been filed.

The damage has weakened private sector morale amid an already fragile post-COVID-19 economy and external pressures. The government has proposed various relief and concession programs aimed at assisting the private sector’s revival. The plan includes exemptions from map approval fees, three-year waivers on property taxes, and expedited insurance claim payments.

In cases of liquidity shortages in insurance companies, arrangements have been proposed for concessional loans from Nepal Rastra Bank and other financial institutions. The plan also outlines measures in the banking sector, such as offering concessional loans, converting running capital loans into installments, extending loan restructuring until mid-July 2026, and adding grace periods if necessary. Loans would be disbursed at fixed interest rates for five years with a premium of only 0.5 percent above the base rate.

Due to damages sustained during the protests to public service vehicles, mobile phones, laptops, and clothing, the government intends to offer partial relief. The action plan permits up to 25 percent relief for total damages in districts based on police reports.

While the government has released this comprehensive action plan, its effective implementation is a significant challenge. With weak revenue collection, increasing expenditure within the federal structure, and escalating economic pressures, strong financial discipline, coordination, and transparency will be essential to ensure impactful reconstruction.

Official data indicates that damages from the protests amounted to approximately NPR 8.45 billion. Although much damage occurred to government and public property, the private sector was seriously affected as well. About NPR 4.49 billion worth of damage occurred to government structures, NPR 3.35 billion in the private sector, and around NPR 597 million in community assets.

Within the federal government’s assets, damages reached around NPR 2.967 billion; local governments suffered about NPR 981 million in damages, and provincial governments about NPR 449 million.

The estimated total cost of repair and reconstruction across all three government levels is about NPR 3.63 billion. Reconstruction of buildings is estimated at NPR 2 billion, vehicle procurement at NPR 616 million, and other assets at about NPR 1.014 billion.