Receives economic package and promises to restart work on projects

12 June, 2006 Prakash Luitel (prakash)

Prime Minister Girija Prasad Koirala made a historic four day visit to India [6-9 June] to receive a massive economic package worth 15 billion Nepali rupees over the next five years. He also received an unusual welcome from one of Asia's top leaders.

Indian Prime Minister Manmohan Singh, who rarely receives the guests in his country, went to the airport himself to meet Koirala. Singh's welcoming is significant for Koirala because this is the first time it has occurred in the history of Nepal.

"I am quite satisfied with the outcomes, and my satisfaction will be evaluated by the people of Nepal," said Koirala.

"I found them extremely concerned about the situation in Nepal. Everybody has extended their support for peace. The welcome that I received in India is one of respect to the Nepalese for their courageous victory and ongoing struggle for democracy," he added.

Nepalese PM Koirala has been succeeded in objective of his prioritized visit of India.

Significantly, India has decided to extend immediately a one-time grant of 1.6 billion Nepali rupees as direct budgetary assistance. India has also decided to provide assistance of US$100 million in a soft loan for infrastructure development projects. Moreover, India will also increase its aid for Nepal's current fiscal year budget to 2.4 billion Nepali rupees, up from 1.4 billion.
India also made a commitment to supply 25,000 metric tons of fertilizer at subsidized prices. In a huge relief for Nepali businessmen and exporters, India decided to exempt all its imports of Nepali manufactured goods from a 4 percent additional customs duty.

According to officials, India's assistance will go toward projects like the 1,500-kilometer Hulaki Highway in the Terai region, the Budhi Gandaki hydroelectric project, the east-west railways, and a polytechnic school in the far-western region. India had promised cooperation in the development of these projects to the former government in September 2004.

India will also write off debts worth 1.5 billion Nepali rupees belonging to the Defense Ministry, which has been receiving lethal and non-lethal military assistance from India since 1964. In addition, India will double the quota of scholarships it gives to Nepali students. And it will defer the recovery of 5 billion Nepali rupees in dues from the Nepal Oil Corporation.

India expressed its support for an end to the decade-long insurgency, which has claimed more than 13,000 lives, and was positive about the United Nation's involvement as an observer in weapons management. Moreover, India seemed receptive to the idea of releasing at least 138 Maoists currently jailed in India. The prime minister made the request at the behest of the Maoists, who have made it one of their demands. No date for their release has been set.

Koirala was accompanied by Finance Minister Ram Sharan Mahat, Local Development Minister Rajendra Pandey, Minister for Physical Planning and Works Gopal Man Shreshtha, Agriculture Minister Mahanta Thakur, and State Minister for Women and Social Welfare Urmila Aryal. Also part of the 42-member delegation were the acting foreign secretary, the industry and commerce secretary, numerous industrialists, and 13 journalists.

It was Koirala's first foreign trip since taking office in late April after King Gyanendra handed back power to parliament. The king has been made a mere figurehead by the Nepalese, who curtailed his privileges and power, a result of his 14-month long unpopular autocratic rule.

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