India's 'Operation Maitri' after the earthquake in Nepal last year cost the government Rs 400 crore. (AFP photo)

NEW DELHI: The government has strongly contested Nepal government's report that disbursement of Official Development Assistance (ODA) by India to Nepal dipped by over 50 per cent in its last fiscal year (2014-15), allowing China to overtake India as an aid donor to the Himalayan nation.

Nepal counted UK, US, Japan, China and Switzerland as its top 5 bilateral DPs (development partners) on the basis of disbursement, leaving out India from the list for the first time in past 5 years.

Its finance ministry had said in its latest Development Cooperation Report that ODA disbursement by India plummeted from over $47 million to $22 million in 2014-15, MEA said Thursday that India continued to disburse aid worth over $50-70 million every year to Nepal.

The ministry said that the figure of $22.227 million (India's disbursement to Nepal in 2014-15) was a misleading figure "which totally distorted the picture".

"Actual funds released to assist Nepal from MEA’s Aid-to-Nepal budget are in the range of Rs 300 to 400 crore annually, or over $50 to 70 million. The discrepancy could be because a good part of our Aid-to-Nepal is not necessarily routed through the Nepalese treasury," said spokesperson Vikas Swarup, adding India remained fully committed to Nepal’s socio-economic development and that there was no aid cut.

Nepal finance ministry report had said that "it is clear" that disbursement from World Bank, India, EU, Japan and India had declined from the level for FY 2010-11.

It acknowledged though that both India and China have also provided technical assistance to it through scholarships, training and study tours, which is not fully reflected in the total volume of assistance. India has also committed $1,400 million for Nepal's earthquake reconstruction work as against China's $766 million.

The government said that what was also not being counted was payment of pension to ex-Gorkha soldiers, which is about Rs1800 crore per year, or $300 million.

"In addition, our 'Operation Maitri' after the earthquake in Nepal last year cost Rs 400 crore, or $70 million," said Swarup, adding that at the very minimum, India was spending $50-60 million to assist Nepal every year.

Moreover, our initial allocations for foreign aid including Nepal and other neighbouring countries, are based on actual expenditure levels in the preceding years, and take into account absorption capacity of our valued partners. So more can and will be provided, if and when required," said the official.

According to India, major payments include about 3,000 scholarships to Nepalese students annually and training for over 700 Nepalese people from security, economic and other organizations accounting for about 75 crore rupees. In addition, the government said, India had approximately 20 Small Development Projects in Nepal.

Four Lines of Credit totalling $1.65 billion are available for utilization, of which only $150 million has been disbursed since 2010. Its interest equalization is borne by MEA.

"We have gifted over 600 buses and ambulances, more than 1000 shallow tube wells and iodized salt which totals another 50 crore rupees. Add to this, construction of river training embankments for Rs 40 crore rupees; and payments for ongoing projects such as ICPs, Terai Roads and Rail links, depending upon project progress," said the official.

