India will offer an assistance of Rs 26.10 billion to neighbouring Bhutan during the fiscal 2007-08.
The union cabinet, chaired by Prime Minister Manmohan Singh, gave its approval to continue the Indian assistance under 'Aid to Bhutan' non-plan budget of the ministry of external affairs towards Bhutan's extended Ninth Plan (July 2002 - June 2008), Information and Broadcasting Minister Priya Ranjan Dasmunsi said on Thursday.
The package will include the development subsidy and tied assistance given by India to Bhutan and also refunds and subsidies, he said.
Explaining the reasons for giving such a huge financial assistance to Bhutan from non-plan expenditure of the ministry, Dasmunsi said: "This decision will result in continued strengthening of India-Bhutan relations based on our strategic and economic interests in an area of high geo-political sensitivity.
"It will provide support to the new king of Bhutan, and the kingdom's transition to a constitutional democracy. It will also generate opportunities for Indian companies to participate in major projects in Bhutan by fulfilling our existing commitments," he added.