Government removes budget transfer limit for reconstruction of public structures damaged during Gen-Z protests

Kathmandu: The government has decided that there will be no limit on budget transfers (virements) for the repair and reconstruction of public structures damaged during the Gen-Z protests.

The decision allows the Ministry of Finance to reallocate as much budget as necessary for restoration works and related national priorities.

According to officials, the new directive enables the government to transfer funds up to four times more than the initial allocation for certain projects — exceeding the limits normally set by the Appropriation Act. The Act generally restricts such transfers to within four times the original allocation for approved programmes.

However, through a notice published in the Nepal Gazette, the Ministry of Finance has opened the door for unrestricted transfers for five key areas — repair and reconstruction, House of Representatives elections, relief and rehabilitation, disaster response, and urgent national programs.

The Appropriation Act allows the Cabinet to issue special orders through the Gazette if any obstacles arise during implementation. Acting on this provision, the Ministry has formally decided that the usual budget transfer ceiling of 10 percent of the total budget and four times the initial allocation will not apply in these special cases.

The Interim Cabinet meeting on October 9 decided that the ceiling on budget transfers would not apply for the reconstruction of public properties destroyed during the Gen-Z uprising on September 8–9. The decision also covers relief measures, economic recovery programs, and the restoration of disrupted public services.

The same exemption applies to the upcoming House of Representatives elections scheduled for March 5, as well as to disaster management, post-disaster reconstruction, and critical ongoing projects requiring immediate funding.

Under the normal provisions of the Appropriation Act, more than 10 percent of the total budget or more than four times the initial allocation cannot be transferred, nor can transfers be made to new or unbudgeted programs. Similarly, budget transfers are restricted during the first quarter and the final month of the fiscal year.

The recent government order effectively suspends these limits for emergency response and reconstruction needs arising from the Gen-Z unrest and other exceptional circumstances, giving the Ministry of Finance full flexibility to manage funds where most required.