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Indian aid for cash-strapped Nepal

Prime Minister Koirala met his Indian counterpart Manmohan Singh today.

india Updated: Jun 07, 2006 15:54 IST

Prime Minister Manmohan Singh on Wednesday met his Nepalese counterpart GP Koirala here amid an indication that India will announce a grant of Rs 100 crore to the cash-strapped country for its immediate budgetary needs.

The entire gamut of bilateral relations was discussed during the meeting, with particular focus on reconstruction and stabilisation of Nepal.

Nepal is seeking financial help from India besides its support to Kathmandu's moves to talk to Maoist rebels.

India will announce a grant of Rs 100 crore to Nepal as budgetary support to it, a unique move signifying the importance New Delhi accords to that country, sources said.

Besides the amount, New Delhi will commit thousands of crores of rupees for long-term reconstruction and development of Nepal during Koirala's four-day "goodwill" visit, which began on Tuesday, sources said.

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

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

India feels that it needs to help Nepal as it emerges into a modern democracy, shedding its monarchial status.

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

India's assistance to Nepal is part of a policy to help that country during its phase of transition.