Embassy of India Thimphu,Bhutan

Bhutan in MEA Annual Report for the year 2000-01

2000-01

A. Excerpts from MEA Annual report wrt Bhutan

Relations between India and Bhutan are characterized by mutual trust, understanding and close friendship. Economic cooperation between the two countries has been steadily growing and continues to provide a firm foundation to the expanding bilateral relationship.

As part of the close bilateral cooperation, India has been extending financial assistance to Bhutan by supporting its Five-Year Plans since 1961. The 8 th Five-Year Plan (July 1,1997 -June 30, 2002) of Bhutan is currently under implementation. Government of India’s support to the 8^th Five-Year Plan has been approved at the level of Rs. 900 crores. Of this total commitment, Rs.500 crores is earmarked for project-tied assistance. Major projects under project-tied assistance are Hospital Projects at Thimphu and Mongar, mini hydel projects, the eastern grid transmission line and other infrastructure projects covering bridges and roads.

In addition, three Mega Projects are being implemented in Bhutan with assistance under Indian Plan Funds, namely - 1020 MW Tala Hydroelectric Project (THEP); 60 MW Kurichu Hydroelectric Project (KHEP); and the 0.5 Million Tonnes Per Day Dungsum Cement Project (DCP). The financing pattern for Tala and Kurichu Projects is 60% grant and 40% loan. Dungsum Project is being funded totally by grant.

During the year, various high level visits have marked the continuing close interaction between India and Bhutan. Bhutanese Foreign Minister, Lyonpo Jigmi Y. Thinley, visited India from April 17-26, 2000. It was a goodwill visit aimed at further strengthening the close ties of friendship and cooperation between the two countries. During this visit, both sides reviewed the wide-ranging cooperation between the two countries and expressed their satisfaction at the timely progress of ongoing projects, particularly in the hydel sector. The two sides also agreed to organize a Bhutanese exhibition – The Living Religious and Cultural Traditions of Bhutan - in India during October/November 2001.

Shri Lalit Mansingh, Foreign Secretary of India, visited Bhutan from March 7-9, 2000. During his visit, he had an audience with His Majesty the King of Bhutan, who expressed his confidence that the close friendship, cooperation and understanding between the two countries would continue to grow. The Foreign Secretary again visited Bhutan from October 19-21, 2000 and held talks on issues of mutual interest.

There were other important visits from India to Bhutan during the year. Secretary (Agricultural Cooperation) and Director General (Indian Council for Agricultural Research) visited Bhutan from July 20-24, 2000. During the visit, issues pertaining to mutual cooperation in the areas of improving productivity of crops like rice, wheat and maize, horticulture development, seed development programme, cooperation in the field of agricultural machinery, tools and small implements were discussed.

Secretary (Post) visited to Bhutan from March 30 - April 2, 2000 when possible cooperation in postal services was explored. The main areas identified were (a) Indian Posts assistance to Bhutan Post in providing Megdoot 98 software and (b) training and technical exchange cooperation. The regular and high level interactions continue to reflect the unique and special ties that exist between the two countries.

The two Governments continued to be in close touch with each other on the issue of ULFA-Bodo militants in Southern Bhutan. The Royal Government of Bhutan is seriously concerned with this problem. The National Assembly of Bhutan in its 77^th session in July 1999 had unveiled a three pronged strategy to address this issue – (a) to cut off supply routes to the militants; (b) to initiate firm action under the National Security Act of 1992 against persons found to be collaborating with the militants in any form; and (c) to continue the process of dialogue with the militants to persuade them to leave Bhutan peacefully. The 78^th session of the National Assembly in July 2000 passed a resolution reiterating the decisions taken in the 77^th session and also authorized the Government to launch military operations against ULFA/Bodo, in case the on going peaceful dialogue with militants fails to achieve the desired objectives.

The new Indian Ambassador to Nepal, Shri K. S. Jasrotia, presented his credentials to the King of Bhutan on 6 November 2000 at a ceremony in the Royal Palace in Thimphu.

B. Budget allocation to Bhutan