India to provide Rs.5,000 crore for Bhutan's development

India will provide development assistance of Rs.5,000 crore to Bhutan over the next five years, a joint statement said after Himalayan nation's visiting leader Lyonchhen Tshering Tobgay met Prime Minister Manmohan Singh Saturday.

According to the joint statement, India's assistance package for Bhutan's 11th Five Year Plan (July 1, 2013-June 30, 2018) was agreed upon at the meeting between the two prime ministers.

"India will contribute Rs.4,500 crore towards Bhutan's 11th Plan, as well as Rs.500 crore towards an economic stimulus package," said the statement.

India also reiterated its commitment to install an additional 10,000 MW of power generating capacity in its Himalayan neighbour even as the two sides expressed satisfaction at the progress in the three ongoing projects, said the statement.

During the meeting, while India reiterated its commitment to Bhutan's socio-economic development, Tobgay thanked Manmohan Singh for the support extended for his country's development and expressed keenness to strengthen people-to-people links.

The two sides also reaffirmed the trust and confidence between their countries and their mutual security interests.

Tobgay arrived in Delhi Friday on a six-day state visit to India.

This is Tobgay's first foreign visit after being elected prime minister, following the victory of his Peoples Democratic Party in the July 2013 elections - Bhutan's second democratic elections.

The polls were held against the backdrop of India cutting off the kerosene and cooking gas subsidy in June, though New Delhi denied there was any political intention but said that the 10th Plan, under which India was providing such assistance, expired June 30.

Tobgay is accompanied by his wife Aum Tashi Doma, Foreign Minister Lyonpo Rinzin Dorje and senior officials.

The visit is in line with the tradition of regular exchange of visits at the highest levels between India and Bhutan, and adds momentum to their time-tested and enduring relations.

Tobgay also met President Pranab Mukherjee, Vice President Hamid Ansari besides UPA chairperson Sonia Gandhi, Finance Minister P. Chidambaram, Home Minister Sushilkumar Shinde and External Affairs Minister Salman Khurshid.

He is expected to meet Leader of Opposition in Lok Sabha Sushma Swaraj Sunday.

The Bhutanese delgation is also expected to meet various industry chambers in India during the visit.

Diplomatic relations between India and Bhutan were established in 1968 with the appointment of a resident representative of India in Thimphu.

The basic framework of bilateral relations is the Treaty of Friendship and Cooperation of 1949, which was updated and signed during the visit of King Jigme Khesar Namgyel Wangchuck in February 2007.