Nepal Announces Sweeping Relief Plan After Gen Z Demonstrations

(MENAFN) In response to devastating youth-led protests that rocked Nepal earlier this month, the country’s interim government has announced a sweeping relief and austerity package, aiming to rebuild a battered economy and stabilize key sectors, local media reported on Thursday.

The violent demonstrations, largely driven by Gen Z activists, resulted in over 70 fatalities and inflicted economic losses amounting to nearly half of Nepal’s GDP — a figure equivalent to approximately one and a half years of the national budget, according to media.

The Cabinet-approved package comes in the wake of the collapse of Prime Minister KP Sharma Oli’s administration and is designed to restore economic continuity, assist impacted industries, and avoid further job losses.

Private sector estimates suggest that damages to businesses have already surpassed 80 billion Nepalese rupees ($563 million), with nearly 15,000 direct jobs affected. Tourism, a key economic pillar, is reportedly among the worst-hit sectors.

As part of the recovery blueprint, the government is offering a 50% reduction in customs and excise duties for businesses and institutions that suffered from vandalism, looting, or arson — aimed at easing the import of machinery, furniture, and essential equipment needed to restart operations.

Tax relief will also be extended to uninsured businesses, with authorities accepting simplified loss assessments for deductions under existing tax legislation.

The package introduces several liquidity support tools, including subsidized reconstruction loans and extended repayment windows for both interest and principal.

A major component is the launch of a Payroll Protection Scheme, aimed at safeguarding employment in devastated sectors.

“This measure is designed to prevent mass layoffs and ensure that workers continue to get their wages while businesses rebuild,” the government draft said.

In tandem with the relief efforts, authorities have also announced an aggressive austerity initiative to curb spending. All small-scale projects at both provincial and local levels have been canceled, and no new government projects will be financed in the current fiscal year.

The combined measures mark one of the most extensive crisis-response packages in Nepal’s recent history, reflecting both the scale of destruction and urgency to rebuild.

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