Nepal unveils major relief plan to address fallout from 'Gen Z' protests

Nepal’s interim government has announced a wide-ranging relief and austerity package to counter the devastating economic and social fallout from the massive youth-led “Gen Z” protests that shook the country earlier this month, according to reports in the Kathmandu Post.

The violent demonstrations, which ultimately toppled Prime Minister K.P. Sharma Oli’s administration, left more than 70 people dead and inflicted economic damage estimated in the billions of dollars. Officials say the financial losses are staggering—nearly equivalent to 18 months of the national budget and close to half of Nepal’s entire GDP.
Private sector groups paint an equally grim picture. Businesses reportedly lost around 80 billion Nepalese rupees ($563 million), with tourism—one of the country’s lifelines—among the hardest-hit industries. Nearly 15,000 jobs have already vanished, and thousands more remain at risk if recovery efforts stall.
In response, the Cabinet-approved package lays out a mix of incentives, financial relief, and tough spending cuts. Companies and professional institutions that saw property destroyed by looting, arson, or vandalism will be allowed a 50 percent exemption on customs and excise duties when importing replacement machinery, equipment, or furniture. For uninsured businesses, the government has pledged simplified valuation procedures so that losses can still be counted as tax-deductible under Nepali law.
To cushion the blow for workers, a Payroll Protection Scheme will be rolled out. The scheme is designed to prevent mass layoffs by ensuring wages continue to flow while businesses rebuild. In addition, firms will have access to subsidized reconstruction loans and extended repayment schedules for both principal and interest.
But the relief plan comes hand in hand with deep belt-tightening. The government announced it is axing all small-scale development projects at provincial and local levels, while no new projects will receive funding for the rest of this fiscal year. Officials argue that redirecting funds toward recovery is essential to stabilize the economy.