Finance Minister Dr. Wagle’s Delhi Visit: India Signals Aid Announcement Only After Nepal Submits Detailed Proposal

October 4, Kathmandu.

Nepal, which began seeking aid from India for post-Bhotekoshi flood reconstruction, has so far been unable to finalize a detailed proposal outlining how much money and what kind of assistance is needed in which sectors.

Although Finance Minister Dr. Swarnim Wagle proposed aid for reconstruction during his three-day visit to India, the Indian side indicated that the extent of cooperation would only be determined after a detailed assessment of Nepal’s needs.

Dr. Wagle had proposed aid for the reconstruction of flood-affected areas during his meeting with Indian Finance Minister Nirmala Sitharaman. However, he stated that no specific amount of aid was requested. India also announced that it would determine the scope of cooperation after the post-flood needs assessment in Nepal is completed.

Thus, the main challenge for Nepal now is not how much money to ask from India, but to prepare a clear proposal outlining how much money is needed in which sector, what to reconstruct with it, and what its priorities are.

According to a former official of the Ministry of Finance, merely going to India to ask for aid is not enough. He stated that bilateral and multilateral cooperation can only be mobilized by creating a clear framework of reconstruction needs and the required resources. ‘It’s not enough to just say we suffered this much damage. One should have gone fully prepared after doing homework on how much is needed in which sector, why it is needed, and what will be reconstructed with it,’ he said.

According to him, although India provided food items, technical assistance, and manpower for immediate rescue and relief, separate homework is needed for long-term reconstruction as the size of resources required will be different. He stated that even though the government should have presented sectoral and project-based proposals to the international community, including India, to mobilize additional resources beyond regular budget allocations, it has not been possible.

‘For immediate relief, India sent materials and manpower. The current goal is to raise a large amount of resources needed for reconstruction,’ he said. The government, however, has already completed an initial assessment of the damage caused by the flood and reconstruction needs.

According to the assessment prepared under the leadership of the National Planning Commission and the National Disaster Risk Reduction and Management Authority, an estimated 723 billion 315 million 200 thousand rupees is required for the rehabilitation and reconstruction of flood-affected areas.

Of that, 473 billion 571 million 900 thousand rupees is needed in the infrastructure sector alone. The government estimates that approximately 390 billion rupees is required for energy and grid system rehabilitation alone. 12 hydropower projects and five solar projects have been affected by the flood.

But even though the preliminary damage and needs assessment showed the total requirement, it remains to be transformed into project-based proposals suitable for submission to India or other development partners, the former official states. According to him, the funds required for reconstruction need to be allocated according to sector, project, timeline, and financial source type.

‘Homework Lacking in Economic Diplomacy’

Senior economist Dr. Chandramani Adhikari also believes that Nepal should now focus on economic diplomacy and mobilize resources for reconstruction. According to him, to garner international cooperation after a major disaster, mere damage statistics are not enough. National-level consensus and clear preparation are necessary regarding what kind of aid is needed in which sector.

‘Economic diplomacy is an extremely important issue for now. But we do less homework and less consensus and consultation among ourselves. That is why economic diplomacy has become weak,’ said Adhikari.

According to him, Nepal should prepare proposals on a single basis to mobilize not only India but also development partners such as China, America, France, and the United Nations and multilateral financial institutions.

He stated that the Bhotekoshi flood should not only be presented as a normal natural disaster but also as an issue related to climate change on international platforms. From that, he argued, Nepal can raise resources for reconstruction through grants, concessional loans, and other financial instruments.

Proposal More Important Than Money in India’s Aid

After the 2015 earthquake, India had pledged one billion US dollars in aid for Nepal’s reconstruction. It included 25 percent grant and 75 percent concessional loan. A large portion of that loan could not be utilized, and discussions are ongoing between Nepal and India regarding using it in the energy sector.

This time, however, India has not yet announced a specific amount for post-flood reconstruction. Sitharaman indicated that after Nepal completes its post-disaster needs assessment, India would determine the scope of assistance.

Therefore, for Nepal now, the issue of what kind of proposal to take forward appears to be decisive, more so than the potential amount of aid coming from India. According to the former official, even though political and diplomatic relations play a role in creating an environment for cooperation, Nepal’s homework is crucial to transform it into concrete aid.

‘The UN should also be mobilized, and international financial institutions should also be mobilized. The UN does not give money, but if it declares an international recognition that Nepal needs assistance, that will prepare a basis for garnering aid,’ he said.

For post-flood reconstruction, the government has put forward options such as organizing a donor conference or seeking aid separately from friendly nations, development partners, and other organizations.

Thus, the latest talks with India are not limited to efforts to immediately obtain funds but are seen as an initial diplomatic initiative to mobilize external resources for reconstruction. Now, Nepal needs to transform its initial damage assessment into sectoral needs, projects, costs, and implementation plans and present them to international partners, including India.

For more: Nepal Seeks India’s Aid Flood Reconstruction