Private Sector Pledges Cooperation with Government for Economic Reconstruction in Nepal

17th September 2025, Kathmandu

Nepal’s private sector has pledged its full cooperation with the government to rebuild and revitalize the nation’s economy after the recent civil unrest.

Private Sector Pledges Cooperation 

This commitment was made during a high-level meeting with the new Finance Minister, Rameshwar Khanal, who emphasized the need for a collaborative public-private partnership to ensure a swift and comprehensive recovery. The meeting addressed the significant damages caused by the protests and outlined a strategic path forward.

Private Sector’s Vision for Recovery

Private sector leaders, including Chandra Dhakal, President of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), acknowledged the losses their businesses have sustained but expressed a strong determination to assist the government. They have proposed several key measures to restore business confidence and facilitate economic recovery. These include establishing a continuous dialogue mechanism between the government and private sector organizations, creating a more business-friendly environment for open operations, and providing financial relief. The Finance Ministry’s immediate approval of a one-month extension for tax submissions, a direct request from the private sector, is seen as a positive first step in this collaborative effort.

During the meeting, senior representatives put forth a range of proposals, showcasing a proactive approach to corporate social responsibility. Anjan Shrestha, Senior Vice President of NCCI, suggested that businesses use their CSR funds to aid in the reconstruction of public and private property. This idea is significant, as it taps into a resource that is specifically earmarked for community development and can be quickly mobilized for reconstruction efforts. Other proposals included:

Loan Restructuring and Rescheduling: To provide much-needed financial breathing room for businesses impacted by the protests, which caused widespread damage to commercial properties, including hotels and car showrooms.

Investment Incentives: Proposing tax benefits and concessions to attract both new domestic and foreign investment, which is crucial for job creation and economic growth.

Tourism Promotion: Suggesting targeted measures to revive the tourism sector, such as special packages for Indian tourists and temporary reductions in VAT and commodity taxes.

Support for SMEs: Recommending production-based relief and soft loans for Small and Medium Enterprises, which form the backbone of the Nepali economy and are often the most vulnerable during times of crisis.

These proposals highlight a shift from a reactive to a proactive stance, demonstrating the private sector’s commitment to playing a central role in the nation’s recovery rather than simply waiting for government aid.

Government’s Response and Long-Term Strategy

Finance Minister Rameshwar Khanal, an experienced technocrat known for his focus on fiscal discipline and market-friendly policies, has already begun implementing several key measures. His appointment is seen by many as a stabilizing factor, bringing a sense of order and clear direction to the Ministry of Finance. He has already taken steps to streamline the government budget by forming a three-member task force to cut fragmented and politically-influenced projects. This move is part of his broader strategy to ensure that national resources are directed toward productive sectors and urgent reconstruction needs. The Finance Minister has also assured private sector representatives that the government is actively considering proposals related to capital and loan guidance, including potential deferrals for up to two years.

This coordinated effort is crucial because the protests have inflicted significant economic damage. Initial estimates suggest the collateral damage could be in the trillions of rupees, with losses to private businesses alone running into billions. The destruction of public and private properties has also created a climate of uncertainty, with both domestic and foreign investors questioning the safety of their ventures in Nepal. The government’s willingness to engage in dialogue and implement key private-sector demands is a powerful signal that it is committed to creating a secure and predictable business environment.

The collaborative approach is also vital for the government’s long-term economic plans. By working with the private sector, the government can not only facilitate a quicker recovery but also build a more resilient and sustainable economy. The focus on public-private partnerships, targeted relief, and structural reforms aligns with the recommendations of the High-Level Economic Reform Advisory Commission, which Khanal himself chaired before his appointment as Finance Minister. The Commission’s report identified deep-rooted problems such as over-reliance on imports, weak productivity, and an undisciplined financial sector. The proposed solutions, which are now being implemented, emphasize creating an investment-friendly environment, flexible labor laws, and effective public-private partnerships. This strategic alliance between the government and the private sector aims to accelerate economic revival and ensure that private enterprises are a key driver of Nepal’s post-crisis economic landscape.

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