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India to give Rs 100 crore grant to Nepal

New Delhi will commit thousands of crores of rupees for economic reconstruction of Nepal over a period of five years.

india Updated: Jun 06, 2006 22:36 IST

India will announce a grant of Rs 100 crore to cash-strapped Nepal for its immediate budgetary needs during the visit of Prime Minister GP Koirala in New Delhi which began on Tuesday.

Besides the amount, New Delhi will commit thousands of crores of rupees for economic reconstruction of Nepal over a period of five years, sources said.

Nepal has sought waiver of dues running into lakhs of rupees on account of its defence purchases from India in the past and New Delhi is likely to consider it favourably.

The amount of Rs 100 crore will be a budgetary support, a unique move signifying the importance India accords to Nepal, sources said in New Delhi on Tuesday night.

The grant is expected to be announced after the talks between Prime Minister Manmohan Singh and Koirala on Wednesday.

The reconstruction package will involve funding of various infrastructural and developmental projects in sectors like roads and power.

India feels that it needs to help Nepal as it emerges into a modern democracy, shedding the monarcial shadow.

"India is committed to the reconstruction of Nepal which is at present at the crossroads," the sources said.

India's assistance to Nepal is part of policy to assist that country during the phase of transition.

Singh has already made a special gesture by putting aside protocol and receiving Koirala at the airport.