India readies economic package for Nepal

Nepal poured its heart out to India and New Delhi is likely to respond in spirit. Prime Minister Manmohan Singh was quoted in Nepali media as telling Nepal Prime Minister, GP Koirala, while welcoming him to New Delhi late on Tuesday evening: "You are South Asia's most towering leader. There is no one like you now."

Koirala and members of the visiting delegation were driven to their hotel in a cavalcade of 40 cars.

"The visit has got a flying start already. No other leader has got this kind of welcome in India - except US President George Bush. There is no doubt that the visit has started on a spectacular note," Dr Ram Saran Mahat, a member of Koirala's entourage, told Nepalese reporters.

Amid reports that an economic package that will range from $ 750 million to 1 billion will be given over the next five years, India has washed off all past policy sins and appears to be determined to pick up Nepal and put it back on its feet.

The bureaucratic chicanery that used to be routine in Nepal's dealings with India was significantly absent during this visit.

Although there were suggestions from Nepalese bureaucrats that as India had 'facilitated' talks between the political parties and the Maoists, it could use its good offices to get the Maoists off the back of the Seven Party Alliance (SPA), this found no larger resonance in official talks.

India too did not talk of phytosanitary checks on the Indo-Nepal border, measures to prevent a "surge" of goods into India, especially vegetable fats, and committed itself to developing hydroelectric and infrastructural facilities in Nepal.

Water resources continued to be an area of concern for both countries. The Mahakali Treaty, though ratified by Nepal Parliament in 1996, continues to remain unimplemented because of perceived fears of upper riparian Nepal over which party the balance of advantage will favour.

India continues to be a victim of the rivers of Nepal, as Bihar Chief Minister Nitish Kumar has pointed out. This and other bilateral issues are likely to be back on the table after this visit.

Mahat said Nepal had identified specific projects in hydro power, roads and rural development sectors for funding by India. The country wants help in construction of roads, particularly in terai and hills. In the power sector, he pointed out that Nepal had ample water resources and said a hydro power project could be built by India on turnkey basis.

The capacity of the project could either be 100 MW for local utilisation or a big one of the size of 300 MW to 600 MW whose output could be sold to India. "India will be the obvious market for our power," he said.

Nepal has also sought waiver of dues on account of its defence purchases from India in the past. Delhi might cede this request.

"India remains committed to give all support in undertaking infrastructure projects," Anand Sharma, Minister of State for External Affairs, said after a meeting with the delegation.