India said it has put its faith in Nepal President Ram Baran Yadav’s approach of urging all political parties represented in the Constituent Assembly to form a consensus government.

Although repeated deadlines have been missed, New Delhi feels this is the only option available to move ahead, the visiting President was told. On its part, India will remain an interested observer because a stable, secular and democratic Nepal was in its interest, External Affairs Minister Salman Khurshid told Dr. Yadav who is here on a five-day visit.

The two sides also went over the bilateral issues, with India highlighting its offer of supplying electricity to Nepal during the lean season. Grid augmentation on the border had led to India supplying some electricity to Nepal and Dr. Yadav was told that steps are being taken to provide more power.

India’s offer for supplying power to Nepal comes at a time when Kathmandu has sought to remove political misgivings over mega hydel projects by issuing a new project development agreement that has been prepared by an international legal firm in order to balance the interests of corporates and the locals. Indian companies, including GMR and the Tatas, hope to commission four hydel projects with a combined capacity of about 3,000 MW and part of the electricity would be exported to India. New Delhi is interested in two more mega projects and has offered to construct a smaller hydel plant as a friendship gesture.

Dr. Yadav also met President Pranab Mukherjee, who has always taken a keen interest in Nepal though as Defence Minister he had once termed the Maoist armed movement in Nepal as of security concern to India. The Nepalese President invited Mr. Mukherjee to visit his country, an offer he accepted. Mr. Mukherjee was present when Dr. Yadav was conferred with an honorary doctorate by the Banaras Hindu University at a special convocation in Varanasi on Monday.

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