Nepal PM gets Rs 1,000-cr aid package

NEW DELHI: Nepal Prime Minister Girija Prasad Koirala today left India with a Rs 1,000 crore aid package to help tide his country through the crippling economic crisis. The package was announced on the last day of Mr Koirala’s four day visit.

It includes an immediate one time grant of Rs 100 crore and the offer of a soft credit line of $100m for the execution of infrastructure development projects on the discretion of the Nepal government, said a joint press statement.

The aid package comes after delegation level talks, where Nepal presented its aid requirements to India which has advanced a package that includes short term grants and long term financial aid. New Delhi has also decided to enhance its ‘Aid to Nepal’ budget for the current financial year from Rs 65 crore to Rs 150 crore annually and waive the outstanding that Nepal owes to India for defence purchases.

Mr Koirala also extended an invitation to Prime Minister Manmohan Singh to visit Nepal which has been accepted. Mr Singh, meanwhile, said that the visit was historic and offered full support to the Seven Party Alliance under the leadership of Mr Koirala, according to the joint press statement.

Apart from the economic aid package, the other important issue that was discussed between the two sides was the future role of the Maoists. Nepal has asked India for its support as it engages in talks with the the Maoists.

India had maintained that the Maoists must put down their arms and shun violence to join the political mainstream and this was reflected in the press statement as well. “The two prime ministers agreed that the success of democracy lay in creating an atmosphere free from violence and coercion, and respect for the law,’’ the press statement said.

Meanwhile, other elements of the aid package include a move to expedite progress on long-term mega infrastructure projects in the areas of roads, railway linkages, border infrastructure, water resources and construction of an oil pipeline (which is on the anvil ), Special Economic Zone, airports upgradation, and other areas to be mutually agreed upon by the both governments. Indian Oil will work out with Nepal Oil modalities for rescheduling the dues owed to it on account of oil supplies.

India will accelerate the release of all funds to Nepal under the Duty Refund Procedure Scheme. The government has also decided to extend the exemption of 4% tax for primary produce to goods manufactured solely in Nepal, after verification.

And India will arrange immediate supply of 25,000 metric tons of fertilizers to Nepal at subsidized prices
“This is for the immediate needs for the Government of Nepal.... The idea is to provide assistance to Nepal as soon as possible,” MEA official spokesperson Navtej Sarna said.

Also, defence minister Pranab Mukherjee said, “All issues relating to defence cooperation have been sorted out. Very soon, our defence cooperation group, the joint consultative committee, which is an institutional arrangement, will be meeting and they will be discussing the expanding areas of cooperation.”

India had suspended suspended its military assistance to Nepal when King Gyanendra siezed power last year.