Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government has begun mobilising domestic and external resources to rebuild infrastructure damaged during the Gen-Z protest movement, allocating Rs4.34 billion for reconstruction in the current fiscal year while preparing to seek financial support from development partners and the non-resident Nepali community.
According to the Ministry of Finance Nepal, fiscal pressure and limited internal resources have forced authorities to explore external assistance to fund reconstruction work.
The ministry’s recent mid-term review report states that diplomatic initiatives will be undertaken to secure contributions from development partners and the diaspora to support rebuilding of public infrastructure damaged during the protests.
Multi-tier spending plan across three levels of government
The federal government alone is set to spend Rs4.34 billion this fiscal year on reconstruction. The report indicates that an estimated Rs10.18 billion annually will be required over the next two fiscal years to complete rebuilding works.
Provincial governments are projected to spend Rs812.5 million this year, followed by about Rs1.46 billion annually over the next two years.
Local governments will shoulder a larger share of reconstruction at the grassroots level. They are expected to spend Rs1.42 billion this fiscal year and roughly Rs3.21 billion annually for the following two years.
Cost-cutting measures adopted to fund rebuilding
To create fiscal space for reconstruction, the government has already begun implementing austerity measures. These include cutting small and fragmented development projects, halting federal projects costing below Rs30 million, and tightening vehicle procurement rules.
Officials say these measures are aimed at diverting resources to priority reconstruction works while reducing non-essential expenditure.
The finance ministry has also initiated discussions with donors to fill the expected financing gap.
Damage estimated at over Rs84 billion
A committee formed under the coordination of the secretary of the National Planning Commission Nepal estimated that the Gen-Z protests caused physical damage worth Rs84.45 billion nationwide.
Of the total loss, damages in the government and public sector accounted for Rs44.93 billion, while the private sector suffered losses estimated at Rs33.54 billion.
The report suggests that reconstruction of government infrastructure alone will require Rs36.30 billion, including nearly Rs19.99 billion for rebuilding public buildings.
Three-year reconstruction target
Under the government’s reconstruction action plan, priority principles include maximum mobilisation of domestic resources, coordination among the federal, provincial, and local governments, and construction of resilient infrastructure capable of withstanding future disasters or unrest.
The plan states that structures with minor damage will be repaired within the current fiscal year, while partially or fully destroyed infrastructure is targeted to be rebuilt within three years.
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