The government has sought India’s approval to transfer additional amount from Indian line of credit for reconstruction and distributing housing grants to families affected by the earthquake.

While signing agreement of $1 billion Indian aid for reconstruction, both sides agreed to use $100 million as housing grants to 50,000 quake-affected families.However, with Nepal government increasing housing grant from Rs200,000 to Rs300,000 in September, 2016, the National Reconstruction Authority (NRA) said $100 million is not enough for all targetted beneficiaries.The Indian government in 2015 had pledged $1 billion for reconstruction of which $750 million is line of credit and $250 million is grant.

NRA told the Finance Ministry to transfer additional amount from the loan portion. NRA Spokesperson Yam Lal Bhusal said, “We sent the proposal to Indian embassy through Finance Ministry and relevant agencies.”According to NRA, Rs5 billion have to be taken out from the portion of loan to finance as housing grant. This amount will be considered as grant despite transfer from the portion of loan, according to the NRA.With the NRA distributing first and second installments of grants to most of families with the domestic resources, the NRA has sought reimbursement of amount spent by Nepal government from India. However, there has been little progress in the areas of constructing school buildings, health posts and cultural heritage sites. These areas are supposed to get $50 million each from the portion of grant, according to NRA.

According to NRA, India has asked for signing project specific agreements for reconstruction of eight schools and a few heritage sites now. As no progress has so far been achieved in the areas of utilizing the Indian line of credit, the NRA has urged the Finance Ministry to renegotiate the terms of credit including the Nepal requiring following procurement guideline of Indian Export-Import Bank.

The NRA has already written to the Finance Ministry, asking it to take convert the $750 million Indian line of credit for post-earthquake reconstruction to an unconditional loan arguing that the amount would not be utilised fully within the NRA’s tenure.

The reconstruction body took this decision stating that there is difficulty in utilising the Indian loan under the current provision of agreement because of the long time it takes to get approval for reconstruction project.Currently, the NRA has identified projects including rebuilding of Hariharbhawan, a library at Balmiki Vidyapeeth and about half a dozen buildings of Tribhuvan Universality in Kirtipur with Indian aid.