Of this, Rs 900 crore (Rs 9 billion) will go to Bhutan in two tranches, while Rs 470 crore (Rs 4.7 billion) has been earmarked for the Maldives, Home Minister P Chidambaram said after a cabinet meeting presided over by Prime Minister Manmohan Singh.

“Bhutan will get an assistance package of Rs.600 crore (Rs 6 billion) and a standby facility of Rs.300 crore (Rs.3 billion). This is over and above the Rs.4,587 crore (Rs 45.87 billion) already committed to Bhutan,” the minister said.

“The Rs 600 crore (Rs 6 billion) is exclusively for the government of India’s project tied assistance to Bhutan,” Chidambaram added.

The cabinet also decided to give a standby facility of Rs470 crore (Rs.4.7 billion) to the Maldives.

“Of this, half will be for the import of essential items and the remaining half will be as budgetary support as the Maldives is facing difficulties,” Chidambaram said.

The Economic Times

However, import of poultry and its products from designated farms or processing plants in unaffected states of India will be allowed only by air.

The ministry has also banned the import of poultry feeds from Samrat feed mills in Siliguri with immediate effect.
It said transport of animal and poultry feeds manufactured in Bhutan via West Bengal and Assam will be allowed only if all the feed bags are fully covered and sealed at the place of origin in presence of Bhutan Agriculture and Food Regulatory Authority (Bafra) officials.

The seal will again have to be verified and opened in the presence of BAFRA officials at the entry point of the destination.

Earlier in the month Bhutan had banned the import of eggs and frozen chicken from Assam and West Bengal.

livemint.com

The steel factory owners are seeing this as indicative of the government’s willingness to help. But the minister has not given away anything yet, only that they submit a “report” to the government. The owners says that they are in desperate need of working capital as theirs had been spent on raw material and the returns had dwindled because of the world financial crisis, which sucked the money from the market. In other words, there was a credit crunch.

“The problem of working capital, if not solved sooner, can lead to a shutdown of the industries,” said an industrialist at a meeting with Lyonpo Khandu Wangchuk. In terms of employment and revenue to the national exchequer, which steel owners say they help generate, the success of the industries and the investors was important and that, at the moment, working capital was integral to their survival.

“Our proposal is that we want the government to talk with the financial institutions to consider bridge loans,” said Letho, the secretary general of the association of Bhutanese industries.

According to the owners, they were referred to Druk holding investments, when approaching Bhutan power corporation for consideration on power tariff and penalties in the wake of the current crisis. When seeking of the banks a bridge loan, owners say, the prudential regulation of the royal monetary authority (RMA) became a problem. “We’d like the government and the ministry to be a bridge between the concerned agencies and us to revive the falling industries,” said a steel owner.

They have a loan debt of around Nu 1.6 billion from individuals as well as consortium loans. They were also among the top ten largest borrowers in Bhutan. However, according to the prudential regulation of RMA, the aggregate sum of 10 single largest borrowers should not exceed 30 percent of the total loans and advances. Lyonpo Khandu Wangchuk has said that the government will look into the matter.

The owners have put up a proposal to waive the prudential regulation for at least 3 to 6 months. “In my case, we’ve reached a situation of hand to mouth survival and almost all of us will have to shut down our industries if something’s not done sooner,” said a woman industrialist.

They pointed out that they are not at a loss because of no market. “We have a market but the only thing we don’t have is working capital, due to the current global crash crisis. We’re confident that we can recover our losses if we could have the capital to start full production,” said Ugyen, a steel manufacturer.

Steel owners said that they had purchased in bulk raw material at a high rate when the price of steel was high and, when they started production, the prices suddenly dropped, causing them huge losses.

Kuensel Newspaper

“As per the agreement with Royal Government of Bhutan, our government has agreed to import 5,000 Mw electricity by 2020,” Ramesh said in a written reply.

Further, Ramesh said that several initiatives have been taken by the government to attract foreign direct investment (FDI) in the power sector.

The government has approved 100 per cent FDI in power projects related to generation, transmission and distribution other than nuclear power plants.

Ramesh said that no targets have been set for FDI in the power sector as the inflow of capital largely depends upon the prevailing investment climate and the foreign investor’s confidence.

Ministry of Power has taken up initiative for facilitating the development of Ultra Mega Power Projects (UMPPs) of about 4,000 Mw each under the tariff based competitive bidding route using super critical technology. These UMPPs would be set up at either pithead or coastal locations, he said.

The criteria adopted for selecting sites for these projects at pithead is proximity to coal blocks, availability of land and water, coal logistics, accessibility of site by road and rail.

He said that the amount of loan sanctioned by Rural Electrification Corporation for setting up power projects up to November 30, 2008, is Rs 19,357 crore.

India to import 5,000 Mw power from Bhutan

The ngultrum has depreciated by 15 to 18 per cent against the dollar in the past two months, with one USD now equivalent to Nu 49.30.

“This has increased our import bills, production costs, debt servicing and the balance of payments situation,” a finance ministry official said.

“The constant decline of the ngultrum against the dollar is making third country imports expensive, especially for those that use technology and raw material from them,” an expert said, adding “this could affect the future growth of such businesses since in 2007 goods worth Nu 5 billion were imported from these third countries.”

Even the government budget will be affected with more money needed for electronic imports like computers.

An MP whose son is studying in Bangkok said, “I had to pay an additional Nu 25,000 this time for my son’s fees due to the exchange rate.”

This is expected to affect trade diversification with importers focusing more on imports from India, putting further pressure on the rupee reserves.

Bhutan’s exports have already taken a hit with some steel industries closing down, since Indian steel has less international buyers thus creating a domestic glut and falling prices, the state-run newspaper Kuensel reported.

Even after excluding Bhutan’s debt to New Delhi, the debt owed to other development partners, mainly in dollars, is Nu 16.5 billion.

Express India