The Indian Embassy in Kathmandu today said there has been no aid cut to Nepal. India is the largest bilateral donor to Nepal for long, Nepali officials said.
Responding to media reports that India has cut aid to Nepal, the embassy clarified: “It may further be reiterated that there is no aid cut in the case of Nepal.”
According to data provided by the embassy, the Indian aid flow to Nepal is routed through many channels and is in many forms.
The actual fund flow to Nepal from India’s Ministry of External Affair’s Aid-to-Nepal budget in 2014-15 was (Indian) Rs.300 crore, or over $50 million. While a good part of this aid is routed through the Nepali finance ministry, a lot of such aid is given directly to the beneficiaries. Such assistance includes granting of scholarships, and creating medical infrastructure, etc, it said.
Though some media reports claimed that China is ahead of India in terms of foreign aid, Nepali officials said that India is the largest bilateral donor to Nepal since long.
According to the Indian embassy statement: “Our aid in 2014-15, and in other years, normally includes nearly 3,000 scholarships to Nepalese students annually at a cost of IRs.50 crore; bilaterally committed free electricity supply and trainings for over 400 Nepalese persons from security, economic and other organizations accounting for IRs.50 crore; about 20 Small Development Projects, gifting of buses/ambulances (over 600 have been gifted so far), over 1,000 shallow tube wells and supply of iodized salt for IRs.50 crore.”
Besides, the Indian aid also contributed to “construction of river training embankments for IRs.40 crore; with payments for ongoing projects such as ICPs (Integrated Check Posts), Terai Roads (of which 90 km has been built) and rail links, depending upon project progress, accounting for the rest.”
“Every year, Government of India spends approx. NRs.700 million for construction, maintenance and repair of embankments,” it said.
Giving details of the Indian aid to Nepal, the embassy further said that four Lines of Credit totalling $1.65 billion are available for utilization, of which only $150 million has been disbursed since 2010. Its interest equalization is borne by MEA.
“Apart from this, pension is paid to ex-Gorkha soldiers totalling to about IRs.1,800 crore per year, or $300 million. In addition, our ‘Operation Maitri’ after the Nepalese earthquake last year, cost IRs.400 crore, or $70 million.”
Such financial support translates into on-ground socio-economic transformations in the form of spread of educational facilities, building health infrastructure, providing livelihood support and enhanced transport linkages leading to an overall improvement in the standard of living, said the embassy.
“Our initial allocations for foreign aid, including to Nepal and other neighbouring countries, are based on actual expenditure levels in the preceding years, and take into account absorption capacity of our valued partners,” said the statement.
“If there is sufficient expenditure and more is required, funds are sought by MEA at subsequent stages of the Budget Allocation Process,” it said, adding, “possibility of channelling more funds, if required, is always open”.
These figures indicate that, at the very minimum, the Indian government is spending $50-60 million towards Nepal’s assistance.
“Being fully committed to Nepal’s socio-economic development, India has continuously endeavoured to partake in the development process in Nepal. Any misrepresentation of figures undermines the quantum, scope and extant of the nature of socio-economic engagement between the two nations,” the statement said.