An agreement was signed today between the Ambassador of India and Finance Secretary, Government of Nepal

An agreement was signed today between the Ambassador of India and Finance Secretary, Government of Nepal regarding India-Nepal Cooperation to renew the scheme for implementation of Small Development Projects through Local Bodies. Following the success of the scheme, started in November, 2003 with a financial commitment from Government of India of IRs. 50 crores, the scheme’s popularity and success has had a beneficial impact on 10% of Nepal’s population within the first 2 years. It has now seen the realization of 112 small projects so far, in around 50 districts all over Nepal.

The Small Development Projects are community- driven and have provided significant benefits to the people of Nepal in the key areas of education, health and infrastructure. Under the Scheme, schools, roads, health centres, etc. have been constructed. The success of the Scheme has encouraged the Government of India to make a fresh commitment of IRs. 150 crores (Nrs. 2.4 billion) for 2006-07 for its renewal announced during the recent visit of Prime Minister of Nepal to India. The projects would be implemented through the local Government authorities of Nepal and maintained by the community. At present 139 projects are currently being realized with a financial commitment of NRs. 1800 crores. Apart from tripling the assistance for the small development projects, the GOI also committed to double its scholarships for Nepal 1000 to 2000 per annum, extend a $ 100 million credit line and IRs. 100 crores grant assistance (NRs. 1.6 billion), Nepal Oil Corporation’s repayments have been rescheduled and subsidy on fertilizers offered. This is a manifestation of India’s commitment as a friendly neighbour to share and participate in Nepal’s economic development.