Koirala heads for India with economic wish list

Revival of the strangled economy would top the agenda for talks between the premiers of Nepal and India.

india Updated: Jun 06, 2006 15:59 IST

As Nepal's Prime Minister Girija Prasad Koirala leads a 41-member team to India on a four-day visit beginning on Tuesday, the revival of the strangled economy would top the agenda for talks.

Last-minute changes in the travel plans added two more ministers to the prime ministerial delegation.

Physical Planning and Construction Minister Gopal Man Shrestha and Agriculture and Cooperatives Minister Mahanta Thakur are also accompanying Koirala now, besides Finance Minister Ram Sharan Mahat, Local Development Minister Rajendra Pandey and Minister of State for Women, Children and Social Welfare Urmila Pandey.

The ailing Koirala's personal physician, Madhu Ghimire, will also travel with him. This is the prime minister's first trip abroad since assuming office in April.

The visitors would get down to business only on Wednesday, when Koirala meets his Indian counterpart, Manmohan Singh.

Koirala will also meet President APJ Abdul Kalam, Home Minister Shivraj Patil, Defence Minister Pranab Mukherjee, United Progressive Alliance chairperson Sonia Gandhi and opposition leader LK Advani.

During the meetings, Nepal would ask India for development aid worth Nepali Rs.75 billion for the next five years, a report said.

Besides budgetary support, the Koirala government would seek assistance in three sectors—hydropower, roads and aviation, the Kathmandu Post daily reported on Tuesday.

The daily said New Delhi would be asked for budgetary support worth Nepali Rs.1 billion to meet the current cash crunch due to low revenue mobilisation caused by political turmoil in April.

The other proposals include converting the dues owed to the Indian Oil Corporation by the Nepal Oil Corporation worth over Nepali Rs.5 billion into a long-term loan and a waiver on the money owed to the Indian government for arms and ammunition, the daily said.

While there was no official confirmation of the report, the business delegation accompanying the prime minister will be asking for the removal of four per cent additional customs duty imposed on the import of Nepali goods through the Indian Budget for 2006-7, exemption of goods of Nepal origin from Value Added Tax, and setting up a special economic zone in Birgunj in southern Nepal or near the Indian border with incentives at par with the best provided in nearby Indian states.

The Confederation of Nepalese Industries, whose representatives are part of the business delegation accompanying Koirala, will lobby for Indian investment in Nepal's hydropower sector.

They will also ask New Delhi to set up the necessary infrastructure like an appropriate transmission line for supplying around 100 MW of electricity that Nepal needs from India till its hydropower projects come on stream.

With the important Indo-Nepal Trade Treaty coming up for renewal next year, Nepali entrepreneurs want the pact to be more comprehensive and long-term with its incentives and exemptions protected from state-level taxes in India.

For better and cheaper transport, they would also propose building an electrified East-West Railway in Nepal and an alternative fast track road linking Kathmandu to Raxaul as well as extending Indian railheads till Jogbani and Sunauli in Nepal.

First Published: Jun 06, 2006 15:59 IST