The government has decided to mobilize the subsidy of Rs 200 million pledged by India only after making a work procedure to spend the grant amount.

According to the Ministry of Finance, although there is a provision that India can directly invest in the projects up to Rs 200 million, the government will draft a procedure to implementation this provision. The procedure will designate areas of investment and a monitoring mechanism will also be formed. The agreement clearly states that India should get approval from the Ministry of Finance of the Federal Government before starting any development project.

“There is no reason to doubt as there is a clear arrangement in the agreement itself. However, the project will be implemented after drafting a procedure,” said a senior official of the Ministry of Finance. According to the Ministry of Finance, the maximum budget limit of each project to be implemented under this project, which is funded by India, will be Rs 200 million.

According to the agreement signed during the recent visit of India’s External Affairs Minister S Jaishankar, the Ministry of Federal Affairs and General Administration will study the proposals received from the local level and other government agencies and recommend the projects to the Ministry of Finance for receiving grants from India.

Even in the case of projects to be implemented by non-governmental organizations, the Ministry of Finance will have to give consent based on the recommendations of the related ministries.

There is also a provision to approve the project only after obtaining the approval of the Social Welfare Council. The approved project will be implemented by including it in the budget of the local level through a tripartite agreement between the Ministry of Federal Affairs and General Administration, the implementing agency and the Indian Embassy. Generally, there is a provision that rural municipalities have to contribute 5 per cent and municipalities 10 per cent in the project run with Indian grants. In special cases, there is also a provision not to contribute such funds. The duration of the agreement will be five years.

Finance Secretary Dr Krishna Hari Pushkar on behalf of the Government of Nepal and Navin Srivastava, the Indian ambassador to Nepal, on behalf of India, signed a memorandum of understanding last week so that India can directly provide grants to projects worth up to Rs 200 million in Nepal. Critics argue that this will increase Indian interference.

CPN (UML) MP Raghuji Pant objected to this agreement with India and said that the tendency to spend at will is against the independence and sovereignty of Nepal, and it will cause unwanted political influence and interference in the country. According to him, Nepal should reconsider this agreement.

A meeting of the Council of Ministers held on December 7 had decided to accept India’s grant for the implementation of the High Impact Community Development Project (HICDP). This program, which is being funded by India was previously run under the name of 'Small Development Project' (SDP). Under this program, the Indian Embassy has been investing in projects by selecting the project itself.

The then Prime Minister Surya Bahadur Thapa had first approved such a project in 2003. At that time, the government had arranged the Indian embassy to directly invest in projects worth up to Rs 30 million. Later, when Baburam Bhattarai was the prime minister, the amount was increased to Rs 50 million.

The cabinet meeting held on December 23, 2019 decided to change the name of the Small Development Project Program to High Impact Community Development Project.

According to the Indian Embassy, India has so far invested in more than 550 projects through the High Impact Community Development Project, which started in 2003. Likewise, 974 ambulances have been distributed to various health institutions and 234 buses to educational institutions under this initiative.