Government Unveils Detailed Plan for Reconstruction Following Widespread Protests

Following widespread protests on Bhadra 23 and 24 that caused extensive physical and economic damage across various parts of the country, the government has publicly unveiled a detailed action plan for its reconstruction and rehabilitation.

The action plan, prepared based on the report from the committee led by National Planning Commission Vice Chairman Dr. Prakash Kumar Shrestha, covers the extent of the damage, reconstruction strategy, resource management, and private sector revival. Furthermore, the plan outlines budget allocations for reconstruction by all three tiers of government for the current fiscal year and the next two fiscal years.

The Commission plans to implement the reconstruction work in phases. The action plan states that activities will proceed based on immediate, medium-term, and long-term strategies. Moreover, the action plan prioritizes mobilizing domestic resources as the primary basis for reconstruction.

A policy has been established where all three tiers of government will initiate reconstruction using their own resources, with the federal government providing support if resources fall short. The strategy also involves advancing reconstruction in a coordinated manner, collaborating with the private sector and non-governmental organizations.

According to National Planning Commission Spokesperson Dr. Dibakar Luitel, short-term and long-term plans must be prepared for the reconstruction of damaged structures, and budgets must be allocated accordingly. “Some work has already begun using the budget from the current fiscal year.

Discussions are ongoing about setting aside a specific budget for the reconstruction of damages caused by the recent protests while preparing the budget for the next fiscal year. The objective is for all three tiers of government to prioritize this matter in their upcoming fiscal year budgets,” he stated.

According to the action plan, the government emphasizes building service-user-friendly, economical, and disaster-resilient infrastructure, aiming to minimize such damages in the future. The estimated budget required for the federal government is approximately NPR 4.34 billion for the current fiscal year, and an estimated NPR 10.18 billion each for the next two fiscal years.

Similarly, provincial governments will require approximately NPR 812.5 million for the current year and NPR 1.46 billion each for the next two years. Local levels are estimated to require NPR 1.42 billion for the current year and NPR 3.21 billion each for the next two years.

All three tiers of government have adopted a policy to manage initial maintenance by reallocating funds from the current budget, utilizing existing vehicles and assets, and purchasing new items only when necessary. Furthermore, a provision for mandatory insurance of all government assets has also been proposed.

The government has adopted a policy of tightening expenditure management to mobilize necessary resources for reconstruction. A policy has been adopted to cut small, fragmented, and ineffective projects, with the federal government refraining from undertaking projects costing less than NPR 30 million, and transferring such programs to provincial and local levels.

In addition, some programs previously operated by the federal government—such as micro-enterprise development, public housing, and thatch-roof-free housing programs—will be removed from the federal level to be operated by local levels. The government also plans to mobilize support for the reconstruction fund from development partners and Non-Resident Nepalis. The policy also mentions that those who contribute such support will be honored by the state.

The private sector was also severely affected by the protests. With total damages exceeding NPR 33 billion, business establishments were the most impacted. Damages in the business sector amount to approximately NPR 27.49 billion, while damages to individual households are around NPR 6 billion. Structural analysis of the damage shows approximately 45% in buildings and houses, 5.5% in vehicles, and the remainder in other assets. Insurance claims worth approximately NPR 23 billion have been filed.

It is analyzed that this damage, occurring amidst a weak post-COVID-19 economy and external sector pressure, has further weakened the morale of the private sector. The government has proposed various relief and concession programs for the revival of the private sector. The action plan includes urging local levels to provide exemptions on map approval fees for damaged buildings and implementing a provision for property tax exemption for three years.

A provision has been proposed to ensure quick payment of claims for insured structures and to provide concessional loans from the Nepal Rastra Bank and other financial institutions if insurance companies face liquidity shortages. Furthermore, concessions will be provided to the banking sector, working capital loans can be converted into installment loans, the loan restructuring period will be extended until Ashar 2083, and grace periods will be extended as needed. A provision for providing loans at a fixed interest rate for five years has also been proposed, which mentions adding only a zero-point-five percent premium to the base rate.

The plan also mentions that the state should arrange partial relief for damages to public service vehicles, mobile phones, laptops, clothing, and similar items during the protests. The action plan prepared by the Commission states that up to 25% of the total damage can be provided as relief through the District Administration Office based on the police report.

Although the government has published a detailed action plan, its effective implementation appears challenging. Given the weak revenue collection, increasing expenditure in the federal structure, and high economic pressure, financial discipline, coordination, and transparency will be necessary to complete reconstruction work of this magnitude.

According to government statistics, the total damage caused by the protests amounts to NPR 84.4577 billion. Of this, the highest damage is seen in government and public sectors, while the private sector has also been severely affected. The report shows that government structures incurred damages of approximately NPR 44.93 billion, while the private sector suffered losses of approximately NPR 33.54 billion. Damages in community and other sectors amount to approximately NPR 5.97 billion.

Within government structures, the federal government appears to be the most affected, with damages amounting to approximately NPR 29.67 billion. Following this, local levels incurred damages of about NPR 9.81 billion, and provincial governments about NPR 4.49 billion.

It is estimated that approximately NPR 36.30 billion will be spent on the reconstruction and rehabilitation of structures across all three tiers of government. Of this, approximately NPR 20 billion is estimated to be spent solely on building reconstruction. Similarly, NPR 6.16 billion is estimated for vehicle procurement, and NPR 10.14 billion for other assets.