NEW DELHI, June 12 (UPI) -- India's $217.7 million financial aid package to Nepal reflects a legitimate effort to help the Himalayan kingdom tide over a burgeoning financial crunch as it returns to democratic government, Indian political analysts said Monday.
"The big Indian economic package to Nepal is a sincere attempt to help the new government to overcome its pressing financial problems," said A.B. Mahapatra, director of the Centre For Asian Studies.
He said India did face some difficulties in meeting Nepal's request for major financial assistance, but New Delhi accepted the proposal to assist a new government which has to tackle both the Maoists insurgency and an economic crisis in the aftermath of long-standing political instability.
New Delhi agreed to grant an economic package Nepal to help the country meet its financial requirements during the recent visit of Nepalese Prime Minister Girja Prasad Koirala, his first trip abroad since taking office.
Indian officials also assured the premier that they would not attempt to influence Nepal's internal politics.
During the course of his discussions with Koirala, Indian Prime Minister Manmohan Singh told him that India would like the people of Nepal to decide the fate of King Gyanendra, specifically whether he should be allowed to continue as a ceremonial monarch or if the country should be converted into a full republic.
The seven party alliance government and the Maoist rebels have been unable to decide the fate of the embattled monarch despite bringing the Royal Nepalese Army under parliamentary control. Rebel leaders have been pressing the government to discard the King as a ceremonial monarch and move towards a republic to break with the past.
Analysts say that Koirala's commitment to strengthening relations with India was evident in his choice not to succumb to Maoist pressure against seeking financial assistance from New Delhi, whom the rebels accuse of being expansionist.
"That Koirala chose India as the main source of assistance is a tribute to longstanding and friendly relations between the two countries," the Indian foreign office said.
"As a close neighbor India wishes to see a strong, democratic, secular and prosperous Nepal," Prime Minister Singh said after his meeting with Koirala. He voiced his appreciation for the initiatives taken by the Koirla government to consolidate the popular discontent that ousted the monarchy.
At the official-level talks the two sides also discussed the future of bilateral military cooperation. India had been a major supplier of military equipment to Nepal but suspended supplies when King Gyanendra refused to reinstate the parliament. On the heels of Koirala's visit, New Delhi agreed to resume military assistance to meet all the military requirements of Nepali army.
India has taken exception to the anti-Indian statements frequently made by Maoist leaders, including its chairman Prachanda, and asked Koirala to persuade them not to become hostile towards a southern neighbor that has always stood by its side.
Nepalese Maoists have criticized India for what they perceive to be New Delhi's support for retaining the king as a ceremonial monarch. They also accuse the Koirala government of being influenced by India.
Rebels appear hopeful they will rule the Himalayan kingdom after joining the political mainstream on their own pre-conditions, which the new government has not accepted in full. Observers say they would seek to cultivate a greater Chinese role in Nepal instead of seeking India' help.
India will have to strike a balance on its position this time, say analysts, as Maoists are as strong, if not stronger, than the political parties.
