New Delhi
9 June 2006
New Delhi on Friday offered a Rs 1,000 crore economic package to
Kathmandu including Rs 100 crore immediately as one-time grant to the budget that
finance minister of Nepal has to present before the end of current fiscal in mid-July and a
soft credit line worth 100 million dollars for infrastructure projects.
Nepal Premier Girija Prasad Koirala concluded his four-day official visit to India and
returned to Kathmandu in the evening but not before reaching an understanding with New
Delhi on security issues including defence cooperation and a waiver of the dues
outstanding owed by Nepal to India on account of defence purchases.
"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," Defence Minister Pranab Mukherjee said.
Although New Delhi remained mum on the political component of the talks, Prime
Minister Koirala told the Nepalese media that India has indicated her willingness to
release the Maoists currently lodged in various jails and also that New Delhi would not
object to United Nations role in Nepal in the months ahead. New Delhi only reiterated
that issues like UN's role were for the Government of Nepal to decide.
India has also agreed to enhance the "Aid to Nepal" budget for the current financial year
from Rs 65 crore to Rs 150 crore annually; grant exemption to all exports of goods
manufactured in Nepal to India from the four per cent additional duty of customs; and
work out modalities for rescheduling the dues owed by Nepal Oil Corporation.
The joint statement issued at the end of Mr Koirala's visit read, "The Government of
India expresses its readiness to expedite on long-term mega infrastructure projects in
the areas of roads, railway linkages, border infrastructure, water resources and
construction of an oil pipeline, special economic zone, airports upgradation and other
areas to be mutually agreed upon by [the two] governments."
Appreciating the steps taken by Kathmandu to consolidate the achievements of the
people's movement by finding a peaceful solution to the armed conflict, the joint
statement also read: "The two prime ministers agreed that the success of democracy lay
in creating an atmosphere free from violence and coercion, and respect for the rule of
law."
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