Saturday, June 10 2006 10:56 Hrs (IST) - World Time -

New Delhi: Committing itself to economic progress and political stability of Nepal, India today announced a package of about Rs 1,000 crore for reconstruction and development of the cash-strapped country.

It also backed Prime Minister G P Koirala's efforts to 'consolidate the achievements of the (Nepalese) people's movement by finding a peaceful solution to the armed conflict, (and) restoring political stability in Nepal through talks with Maoists.

The economic package is in the form of immediate budgetary support, lines of credit, waiver of dues and investment in reconstruction and developmental projects in infrastructure, water and oil sectors.

In a Joint Statement issued at the end of the four-day visit of Koirala here, India announced to extend immediately a one-time grant of Rs 100 crore to the budget of Nepal government and a soft credit line of US $ 100 million (Rs 4.5 crore) for execution of infrastructure development projects prioritised by Nepal government.

New Delhi agreed to waive the dues outstanding as on date owed by the Nepal government to Indian government on account of defence purchases. Kathmandu owes about Rs 100 crore for the purchases of defence material.

India would enhance its 'Aid to Nepal' budget for the current financial year from Rs 65 crore to Rs 150 crore annually, arrange immediately supply of 25,000 metric tonnes of fertilisers to Nepal at subsidized rates.