Wednesday, June 7 2006 16:35 Hrs (IST) - World Time -

New Delhi: As it emerges from the monarchial system to full democracy, Nepal is looking up to India for all round support, including financial and political, for the reconstruction and stabilisation of the Himalayan country.

Kathmandu wants New Delhi to support it in its endeavour to bring Maoist rebels into the mainstream and play a role wherever it is required. It also seeks resumption of non-lethal defence supplies.

"Nepal is in dire need of economic support and we expect support from India," Nepalese Finance Minister Ram Sharan Mahat told sources here.

Mahat, who is accompanying Prime Minister G P Koirala on his four-day 'goodwill' visit here, said Nepal has identified specific projects in hydro power projects, roads and rural development sectors for funding by India.

Nepal specifically wants help in construction of roads particularly in Terai and Hills and development of the power sector, the minister said.

In the power sector, he pointed out that Nepal had ample water resources and said a hydro power project could be built by India on turnkey basis.

The capacity of the project could be decided depending on the interest India shows, the minister said. He indicated that it could be either 100 MW for local utilisation or a big one of the capacity of 300 MW to 600 MW whose output could be sold to India.

"India will be the obvious market for our power," he said.

Mahat said India's support needed to be over a period of time to help his country emerge from the current crisis to economic stability.

On the defence front, the Finance Minister refused to comment on whether Nepal would seek resumption of military supplies from India.

Sources, however, said Kathmandu is likely to seek restoration of supply of non-lethal defence material like vehicles and communication equipment.

The Koirala government is not seeking lethal equipment as it does not want to spoil the atmosphere building up towards peace talks between the government and Maoist rebels. Kathmandu is wary that seeking of supply of lethal equipment may cause suspicion among the Maoists, leading to distrust and their withdrawal from talks.

The Koirala government also seeks Indian support as it moves ahead in its talks with the rebels to bring them into the mainstream.

The Maoists have sought release of its about 140 cadres believed to be lodged in jails in India. This issue is expected to come during Koirala's discussions with the leadership here.

Mahat said Koirala, despite his ill health, had made it a point to visit India first as he wanted to express gratitude for the support of Indian government and people extended during the movement for restoration of democracy.