The Nepal interim government has announced a large-scale relief package to address the devastation caused by the recent Gen-Z protests, which left more than 70 people dead and caused billions of dollars in damage.

Officials say the losses are nearly equal to half of Nepal’s GDP, making this one of the most disruptive episodes in the country’s recent history.

The Cabinet approved the relief plan to stabilize fragile sectors, aid economic recovery, and keep businesses afloat after the violent protests that forced the ouster of former Nepali Prime Minister KP Sharma Oli.

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Nepal interim government rolls out economic recovery plan

According to private-sector assessments, businesses alone lost around 80 billion Nepalese rupees ($563 million), with nearly 15,000 jobs affected. Tourism, one of Nepal’s most vital industries, was among the hardest hit.

The interim government said the package is designed to restore stability while ensuring that citizens and businesses can rebuild.

The relief package offers a 50% exemption on customs and excise duties for companies importing furniture, machinery, and equipment to replace what was destroyed in the unrest.

For uninsured businesses, tax authorities will use simplified valuation procedures to recognize losses, allowing deductions under Nepal’s tax laws. Other measures include reconstruction loans and extended repayment timelines on both principal and interest.

A Payroll Protection Scheme is also being introduced to ensure employees in affected businesses continue receiving wages during the rebuilding process. “This measure is designed to prevent mass layoffs,” the government draft said.

Austerity measures aim to curb spending

Alongside the relief plan, the Nepal interim government has launched strict austerity measures. Small-scale projects at provincial and local levels have been scrapped, while no new government projects will be funded in the current fiscal year.

Officials said the steps are necessary to control spending and redirect resources toward urgent recovery efforts.

The Gen-Z protests not only caused severe economic damage but also reshaped Nepal’s political environment. The youth-led demonstrations highlighted frustration over corruption, unemployment, and inequality, pushing the Nepal interim government to act quickly.

With the relief package and austerity measures now in place, Nepal faces the challenge of balancing economic recovery with long-term political stability. The aftermath of the protests in Nepal underscores the growing power of youth movements in shaping the country’s future.

Protests erupted in Nepal on September 8 following the government's decision to block unregistered social media sites, including Facebook, X, and YouTube, following the platforms' failure to abide by regulations demanding official registration in the country despite warnings from the Nepali Minister for Communication and Information, Prithvi Subba Gurung.