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The Union Cabinet today approved an assistance package of Rs.1984 crore to IXth Plan of Bhutan for the period July 2002 to June 2007. It comprises development subsidy of Rs.710 crore, project tied assistance of Rs.734 crore and other subsidies and refunds of Rs.540 crore.
The package would be funded from the non-Plan budget of the Ministry of External Affairs.
The decision will lead to:
(i) continued strengthening of India – Bhutan relations based on our strategic and economic interests in an area of high geo-political sensitivity;
(ii) generation of opportunities for Indian companies to participate in these major projects and
(iii) strengthen goodwill for India in Bhutan by fulfilling our existing commitments.
Economic cooperation with Bhutan has been the corner stone of the multi-faceted and mutually beneficial relations between India and Bhutan. Economic cooperation, particularly in the hydropower sector represents a win-win situation for both countries with India receiving an assured supply of cheap and clean energy and Bhutan receiving a significant revenue stream. The 336 MW Chukha and 60 MW Kurichhu projects which have already come on stream and 1020 MW Tala project nearing completion are symbols of India-Bhutan friendship and cooperation. Besides the tangible benefits, our economic cooperation also translates into tremendous goodwill in Bhutan for the people and Government of India. The cooperation has also paid rich dividends by way of guarding our strategic and security interests as demonstrated by the successful operations undertaken by Royal Bhutan Army to flush out the Indian insurgent groups based in Bhutan in December 2003 and January 2004.
India has extended support to Five Year Plans of Bhutan since their inception in 1961. This support is viewed as an essential component of Bhutan’s planned development and is extended in a variety of ways including by expanding the domestic revenue base by undertaking projects which would generate surplus revenues in Bhutan, undertaking projects in Bhutan in social, health, infrastructure and strategic sectors and also extending cash support to bridge the resource gap. There is no dilution of India’s role in the developmental and modernization process in Bhutan, despite the entry of other bilateral and multi-national donors.
YSR/DS/HS/LV
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