February 23: The investment of the Indian government in small projects through the embassy has decreased recently. Before 2015, the Indian government used to support at least 6-7 projects. But the Indian Embassy signed MoU and invested in just six projects in the last four years.

From the year 2003, direct investments were made in small projects under the name of Small Development Project (SDP) with the direct involvement of the Indian Embassy under which it used to directly give up to a maximum of Rs 50 million to small development projects like schools and health centers through the District Development Committee. However, after the government tightened the selection and spending criteria, such support stopped coming from India.

According to the Ministry of Federal Affairs and Local Development, currently only three projects are signed under the SDP. Currently, the local levels of Udayapur, Dhading, Solukhumbu districts have signed MoU for Indian assistance under the SDP project, according to Rudrasingh Tamang, joint secretary of the ministry.

Before the country adopted a federal setup, the programs were implemented directly through the district development committee. However, after the promulgation of the new constitution, the sole right to investment in such projects was authorized to the federal government. Therefore India could not give the funds directly after the new constitution came into effect.

Officials of the Ministry of Finance say that India has not shown much interest in carrying out the projects recommended under the new arrangement. A senior official of finance informed that although they have recommended about 150 projects for the last 4 years after consulting the local level, only 6 to 7 projects have moved forward with MoU.

According to the official, all the remaining projects are put on hold. Dozens of previously run projects are stalled recently due to lack of Indian support. The Ministry of Federal Affairs and General Administration has the authority to regulate the SDP program along with the Ministry of Finance.

After the country went into federalism, the program halted for almost 6 years because it was not clear how to get the investment under this support of the Indian Embassy. Three years ago, the government under the leadership of KP Sharma Oli extended the deadline for the continuation of the SDP program until August 2023 by making the criteria for the SDP program to be invested by the Indian Embassy.

Former Foreign Secretary Madhuraman Acharya takes the decline in Indian assistance as a positive thing after the government tightened the policy. He said, “There is no need to continue receiving help from others in small projects that Nepal can undertake itself.”

According to the standards implemented by the government, India can conduct programs and projects under the SDP run with the support of the government of India in direct coordination with the government of Nepal, from building construction of community schools to waste management. Under the SDP, India can invest in small infrastructure projects such as community school buildings, early childhood development centers, libraries, hospitals, health centers, yoga centers, blood transfusion centers, and maternity homes.

Similarly, India can also invest in water supply projects and construction of agricultural infrastructure. With the government clarifying the areas of investment, India can now invest in such programs in coordination with the local level. Currently, the local level is responsible for plan selection to implementation.

A detailed project report (DPR) has to be prepared while selecting the plan. There is a provision that 20 percent investment of the local level must be mandatory in the project to be conducted with Indian investment. The then government decided that the letter of commitment must be sent to the Ministry of Federal Affairs.