All Three Levels of Government Must Allocate Budgets for Reconstruction of Structures Damaged by the Janjati Movement

March 16, Kathmandu – After the widespread physical and economic damage caused by the protests held across various parts of the country on September 8 and 9, the government has released a comprehensive action plan for reconstruction and reorganization.

Based on the report of a committee led by Dr. Prakash Kumar Shrestha, Vice-Chairman of the National Planning Commission, the action plan covers the extent of damage, reconstruction strategies, resource management, and private sector rehabilitation. The plan includes budget provisions for the reconstruction efforts to be undertaken by all three levels of government in the current and next two fiscal years.

The Commission has prepared to implement the reconstruction process in phases, organized into immediate, medium-term, and long-term strategies. Priority is given to mobilizing internal resources as the main basis for reconstruction.

All three levels of government are to carry out reconstruction with their own resources, and if resources are insufficient, the federal government will provide assistance. Coordination with NGOs for the reconstruction of the private sector is also part of the strategy.

According to Dr. Diwakar Luintel, Joint Spokesperson of the National Planning Commission, short-term and long-term plans have been formulated for rebuilding damaged structures, with corresponding budget allocations needed accordingly.

“Some reconstruction work has already begun using this fiscal year’s budget. Discussions are underway to allocate a specific budget for reconstruction related to damages caused by the Janjati movement in the upcoming fiscal year. The aim is for all three levels of government to prioritize this issue in their budgets,” he explained.

The action plan emphasizes constructing service-friendly, cost-effective, and disaster-resilient infrastructure to reduce similar damages in the future. The federal government anticipates spending around NPR 434.3 million in the current fiscal year and plans to allocate NPR 1.018 billion annually for the next two fiscal years.

The provincial governments will need about NPR 812.5 million for the current year and NPR 1.46 billion annually for the next two years. Local governments are expected to require NPR 1.42 billion this year and NPR 3.21 billion annually during the following two years.

All three levels of government will fund initial repairs with the current budget, utilize existing vehicles and assets, and only purchase new ones when necessary. Additionally, compulsory insurance coverage for all government assets has been proposed.

The government has adopted a strict expenditure management approach to mobilize resources for reconstruction. This includes cutting smaller, fringe, and ineffective projects, restricting the federal government from undertaking projects costing under NPR 30 million, and transferring such programs to provincial and local authorities.

Programs currently run by the federal government, such as Small Enterprise Development, Public Housing, and Sloping Roof Free initiatives, will be administered by local governments moving forward, with the federal role phased out. The government also plans to seek reconstruction fund contributions from development partners and non-resident Nepalis, with policies to honor contributors.

The private sector has been severely affected by the protests, with over NPR 3.3 billion in total damages. Commercial establishments also bore the brunt with damages valued around NPR 2.749 billion, while individual households suffered losses of about NPR 600 million.

Structural analysis indicates approximately 45% damage to buildings and houses, 5.5% to vehicles, and the remainder to other assets. About NPR 2.3 billion in insurance claims have been filed.

The damage has dampened the private sector’s morale amidst a fragile post-Covid-19 economy and external pressures. The government has proposed various relief and concession programs for private sector revival, including waivers on map approval fees, three-year exemptions on property taxes, and expedited payment of insurance claims.

If insurance companies face liquidity shortages, arrangements for concessional loans will be made available through Nepal Rastra Bank and other financial institutions. Banking sector relief measures include concessional lending, converting working capital loans into installments, extending loan rescheduling until mid-July 2026 (Bhadra 2083), and providing grace periods if necessary. Loans will be offered at a fixed interest rate for up to five years, with an additional premium of only 0.5% over the base rate.

The plan also provides for partial relief for damage to public service vehicles, mobile phones, laptops, and clothing sustained during the protests. Based on police reports, districts can grant up to 25% relief on total damages.

Despite the detailed action plan released by the government, effective implementation remains a challenge. Weak revenue collection, increasing expenditures under the federal structure, and high economic pressure require financial discipline, coordination, and transparency to ensure successful reconstruction.

According to official data, the protests resulted in damages equivalent to approximately NPR 8.445 billion. While most damage occurred in government and public assets, the private sector was also significantly affected. Damage to government structures alone is estimated at around NPR 4.493 billion, private assets at NPR 3.354 billion, and community assets at approximately NPR 597 million.

Within government structures, about NPR 2.967 billion in damages occurred at the federal level, NPR 981 million at local levels, and NPR 449 million at provincial levels.

The total estimated cost for the reconstruction and reorganization of government structures at all three levels is about NPR 3.63 billion. This includes roughly NPR 2 billion for building reconstruction, NPR 616 million for vehicle procurement, and NPR 1.014 billion for other assets.