INDIA-NEPAL ECONOMIC COOPERATION PROGRAMME BACKGROUND From the beginning, the core philosophy of India’s development assistance programme in Nepal is based on India’s belief that the welfare of the people of these two countries is interlinked. Guided by this philosophy, soon after independence in 1947, India strongly supported Nepal’s desire for transformation into a modern and welfare state. India, itself a developing country and with its limited resources, started contributing significantly towards the development infrastructure and human resources in Nepal, with the programme of cooperation launched in 1951. Some of the first projects which opened Nepal to the rest of the world were executed with the Indian assistance. For the first two Five Year Plans of Nepal, India was the only foreign country involved in Nepal's development. The objective of this programme had been and remains to supplement the efforts of the Government of Nepal in Nepal’s national development. To give a concrete shape to this vision of development cooperation, Government of India set up the Indian Aid Mission in Kathmandu in 1954, which was later renamed as the Indian Cooperation Mission (ICM) in 1966 and remained functional till the 1980s. The change in the nomenclature was to reflect the fact that India’s association with the economic development of Nepal was more in nature of cooperation than merely financial assistance. The ICM, with its more than 80 staff, devoted exclusively to implementing Indian-assisted mega development projects in Nepal. Later, the ICM was recast as the Economic Cooperation Wing of the Embassy of India, which continues to carry forward the development assistance to Nepal with the same zeal as under the ICM. CURRENT PROGRAMMES India’s economic assistance to Nepal has grown manifold in the past two-three years, particularly since the restoration of multiparty democracy in Nepal, and our economic cooperation engagement with Nepal has emerged as one of the most important elements of India-Nepal relations. In overall terms, there are presently over 290 small and large projects being undertaken under the India-Nepal Economic Cooperation Programme, with a committed outlay of over Indian Rs. 14 billion. The relevance and importance of our economic assistance in Nepal is particularly enhanced today as Nepal steps into a new era of democracy, peace and development. SMALL DEVELOPMENT PROJECTS One of the current hallmarks of India’s developmental engagement with Nepal is the success of the Small Development Projects (SDP) programme, which focuses on social and physical infrastructure in the sectors of education, health and community development, and is being implemented since 2003 under a bilateral agreement between the Governments of India and Nepal. The SDPs, which are community-owned and executed by the local agencies of Government of Nepal, emerged from the diversification of India’s economic assistance programme from the earlier exclusive attention to large infrastructure projects to grassroots programme, which could reach out to the beneficiaries directly, efficiently and promptly without the complexities of inter-governmental negotiations involved in big projects. The methodology is simple and straight forward for these projects with little or no overhead costs and 100% of project funding reaching the beneficiary. These grassroots projects have proved immensely useful in supplementing the local developmental efforts of the Government of Nepal through a well devised community-oriented, transparent and participative programme. Its imprint now covers almost the entire Nepal, with over 220 SDP projects valued at approximately Indian Rs. 240 crores. MEGA PROJECTS FOR CROSS-BORDER CONNECTIVITY With a view to facilitating greater cross-border exchanges and bringing about qualitative transformation in cross-border connectivity between India and Nepal, a number of mega infrastructure projects also form an important part of India’s economic assistance portfolio in Nepal. Creation of Integrated Check Posts at the four border check points on the Indo-Nepal border (Raxaul-Birgunj, Jogbani-Biratnagar, Bhairahwa-Sunauli, Nepalgunj Road-Nepalgunj) is one of the most important endeavours for achieving this objective that has been agreed upon between the two governments. It envisages world-class infrastructure at these border points for smooth flow of people and goods across the border. In addition, Government of India is also undertaking projects for development of over 1500 km of road network in Nepal's Terai region that would provide easy access between the Indo-Nepal border areas and Nepal’s East-West Highway. A link road connecting Mahendranagar in Nepal’s far-west with Tanakpur in India will extend the connectivity beyond Nepal’s East-West Highway into India. Similarly, a project presently on anvil for cross-border rail links at five locations at the Indo-Nepal border (Jalpaiguri-Kakarbhitta, Jogbani-Biratnagar, Jaynagar-Bardibas, Nautanwa-Bhairahwa, Nepalgunj Road-Nepalgunj) will significantly boost cross-border linkage and will be of immense value in promoting trade and commerce between the two countries. All these are high value projects and likely to cost a few thousand crores of Indian rupees. OTHER LARGE AND INTERMEDIATE PROJECTS Among other large and intermediate-size projects presently being implemented under the India-Nepal Economic Cooperation Programme include the construction and faculty support for BP Koirala Institute of Health Sciences, Dharan (cost: IRs. 120 crores); 200-bed Emergency and Trauma Centre at Bir Hospital, Kathmandu (tentative cost: IRs. 80 crores); Manmohan Memorial Polytechnic at Biratnagar (tentative cost: IRs. 25 crores); 100-bed Nepal Bharat Maitri Bakhtawari Hari Eye Hospital at Krishnanagar, Kapilvastu (tentative cost: IRs. 10 crores); Science Learning Centre at Kathmandu (tentative cost: IRs. 10 crores); Polytechnic at Hetauda (tentative cost: IRs. 22 crores); Dharmashala at Pashupati Temple Complex (tentative cost: IRs. 10 crores); development of 22 Farmers’ Managed Deep Tube Well Irrigation Systems in Jhapa, Sunsari, Saptari and Siraha districts in Eastern Terai (tentative cost: IRs. 4 crores). WELFARE SCHEMES FOR EX-SERVICEMEN For the welfare of ex-servicemen and GOI pensioners living in Nepal, which now number over 122,000, Government of India implements a number of welfare schemes every year under the India-Nepal Economic Cooperation Programme. These include drinking water projects, medicine pack scheme, solar electrification projects in remote areas etc. TRAINING INITIATIVES Training programme for the Nepalese government officials has been recently launched as a new dimension of India’s economic cooperation engagement with Nepal. Under this, training-cum-exposure visits to India for Local Development Officers from almost all districts of Nepal, along with a group of Finance Officers, has been successfully organised. The programme has so far also included a study visit in December 2007 by a high-level delegation from the Public Service Commission of Nepal to study India’s reservation policy in recruitment. More such training proposals for various levels of Nepalese officials are in pipeline, which we believe will further strengthen awareness of each others’ systems and reinforce the friendly, professional and close relations that characterize the interaction between the civil servants of the two countries. ASSISTANCE TO NEPAL’S PEACE PROCESS As part of the economic assistance programme, Government of India has responded with greatest earnestness to the needs of the people and the Government of Nepal in facilitating the peace process and meeting other specific requirements following the Janandolan-II in April 2006. During the visit of Prime Minister Koirala in June 2006, India announced trebling its development assistance to Nepal during 2006-07 under the ‘Aid to Nepal’ programme. Both sides also agreed to expedite progress on long-term mega infrastructure projects in Nepal in the areas of roads, railway linkages, border infrastructure, water resources, construction of an oil pipeline, special economic zone, airports upgradation, and other areas to be mutually agreed upon by the two Governments. A number of other support measures were announced and implemented during that visit, including,
Government of India welcomed the roadmap laid down by the historic Comprehensive Peace Agreement of November 2006 towards political stabilization in Nepal through peaceful reconciliation and inclusive democratic processes, and has consistently responded with a sense of urgency to the needs of the people and Government of Nepal in ensuring the success of the peace process, of which the Constituent Assembly elections are an important and inalienable part. To this end, a number of specific assistance totaling over IRs. 75 crores has been provided in response to requests from the Government of Nepal. These include,
India remains steadfast in its commitment to extend assistance for Nepal’s economic rehabilitation and political stabilization. India holds that while there is an urgent need to hold the elections to the Constituent Assembly in Nepal in a free and fair manner, it is equally critical to ensure that economic deliverables, particularly in the areas of education, health and infrastructure, reach people without any pre-conditions in a smooth, quick and unencumbered manner. India’s assistance programme in Nepal is guided by this vision. The existing developmental engagement stands to be further strengthened with the ushering in of a new era of hope and peace in Nepal. PowerPoint Presentation on India’s development assistance to Nepal Reference Map of economic cooperation projects with Government of India assistance in Nepal Booklet 'Being Together Growing Together' (pdf version) |