KATHMANDU, July 27: The Indian government has released Rs 2.1 billion of the Rs 25 billion grant pledged to the government of Nepal for the reimbursement of the first tranche of the housing grant distributed to the earthquake victims in Nuwakot and Gorkha districts.
Three years after pledging to provide grant assistance of Rs 25 billion as grant aid and Rs 75 billion as soft loan, the Indian side released the amount to the government for the first time on Friday. Right after the 2015 earthquakes, India had pledged Rs 100 billion in assistance including Rs 75 billion in soft loan for post-quake reconstruction.
After Indian dillydallying in releasing the pledged grant, the government had distributed housing grant to the victims in Nuwakot and Gorkha from its internal resources and had forwarded the expenditure details to the Indian side for reimbursement last year. India had pledged to cover housing grants of 50,000 earthquake victims whose houses were completely damaged in the two districts.
Indian Ambassador to Nepal Manjeev Singh Puri handed over a check of Rs 2.1 billion to the secretary at the Ministry of Finance Rajan Khanal amid a function on Friday. The Indian Embassy in its statement said the amount was released for the reimbursement of the first installment of housing grant to 42,086 in the two districts. Finance Minister Yuba Raj Khatiwada was also present at the check handover over function.
According to the National Reconstruction Authority officials, they had asked the government to request the Indian side to provide at least Rs 4 billion in the first phase.
Since March 2018, the Indian government has been partnering with the United Nations Development Program and the United Nations Office for Project Services for providing Socio-Technical Facilitation to housing grant beneficiaries in Gorkha and Nuwakot to help home owners ensure that their homes comply with the earthquake resilience criteria fixed by the government.
However, even though the Export-Import Bank (Exim Bank) in Mumbai has issued a Line of Credit (LoC) for the Rs 75 billion soft loan, the government of Nepal has not been able to utilize it in reconstruction work due to the complicated procedures involved, according to officials. Of late, the government has been requesting the Indian side to simplify the overall process and release the pledged loan as early as possible.
In September 2016, both the countries agreed to utilize Rs 5 billion from the LoC for the payment of third tranche of the housing grant in two districts. Similarly, as per the understanding reached between Nepal and India, the government will utilize the soft loan to reconstruct over 300 schools in all 31 earthquake-hit districts. Similarly, the National Reconstruction Authority also plans to utilize the soft loan for the reconstruction of various heritage sites including Harihar Bhawan.
Even though the government has started reconstruction of public schools from internal resources, the task of heritage sites reconstruction is still in limbo due to the delay on the part of the Indian side to release both grant and soft loan on time.
However, the Embassy of India in its statement on Friday has maintained that the government of India remains committed to continuing support to the government of Nepal in post earthquake recovery.