Nepal projects held up,India to change funding rules

With political uncertainty looming large in Nepal,New Delhi is getting worried about adverse impact its having on the India-aided infrastructure projects in the Himalayan country.

Sources said that almost every single project which is being implemented by the Indian government is running the risk of time and cost-overrun due to the situation prevailing there.

The Indian mission in Nepal has been raising the matter with the government in Kathmandu,but the political instability is taking its toll.

It is learnt that the Ministry of External Affairs MEA has decided to move the funds under the Aid to Nepal component from Plan to Non-Plan head in order to give some flexibility to spending by the government.

Funds,through the Aid to Nepal component,are being used to develop the countrys infrastructure in the border areas adjoining India 8211; like the Integrated Check Posts ICPs,cross-border rail links and the feeder and lateral roads in the Terai region of Nepal.

By moving this fund from Plan to Non-plan,sources reasoned,the Ministry of External Affairs will have the elbow room on spending the finances at its own pace.

For spending the funds under the Non-plan head,the ministry will not have to go to the Planning Commission. In case of delays 8211; which is not in the control of the Indian government as is the case here 8211; the MEA will be able to decide on the utilisation of funds at its own discretion, a source in South Block said.

Story continues below this ad

A top official told The Indian Express,Nepal is undergoing a political transition and the situation is fluid. India is working and assisting the Government of Nepal in its socio-economic development through Aid to Nepal budget. India has undertaken projects in the areas of infrastructure development,health,water resources,rural and community development and education. In view of the importance and uniqueness of relations with Nepal as also the political transition that Nepal is undergoing,a decision was made to shift the funds allocated under the Plan head covering primarily the development of infrastructure at the border to the Non-plan head to provide greater flexibility for implementation of the projects and meet the requirements that such a transition demands.