SRINAGAR, May 23: Indian Prime Minister Atal Behari Vajpayee on Thursday ruled out talks with Pakistan over Kashmir and announced a 61.7-billion-rupee (1.3 billion dollars) development package for the held state.

Vajpayee said President Pervez Musharraf should match his words with deeds to clamp down on what India says is “cross-border terrorism”.

Addressing a press conference here, Vajpayee said there was “tension on the borders”.

“The situation is serious and it is a challenging situation, and we will meet the challenge. We will see what happens in the future.”

Vajpayee added cryptically: “We had said war clouds were hovering, but sometimes lightning strikes even if the weather is clear. We hope that the lightning will not strike.”

He said he was “disappointed” that President Musharraf had failed to make good on promises he had made on Jan 12 to end “Islamic militancy”.

“Promises were made but they were not implemented. Word must be matched by deeds. That has not happened,” he said.

“There is no question of including Pakistan in talks about Kashmir.”

India, he added, had been fighting a “proxy war” against Pakistan for the last 12 years.

“There was cross-border terrorism. We have been fighting it,” Vajpayee said after a day of talks with senior advisers in Srinagar.

Vajpayee’s three-day visit to occupied Kashmir began on Tuesday, just hours after a senior Kashmiri leader, Abdul Gani Lone, was shot dead in Srinagar, prompting further tensions.

The premier on Thursday chaired a meeting of the Unified Headquarters — a body grouping Kashmiri and national security chiefs to devise a “counter-insurgency strategy”.

Political leaders who had met Vajpayee on Wednesday had called on the Indian government to earn the trust of the Kashmiri people by providing a relief and development package before announcing elections — which are slated for later this year.

Vajpayee obliged them by announcing the 1.3-billion-dollar development package including a 287 kilometre railway track linking held Kashmir’s south and north and said the first train to use it would roll into the valley within five years.

Other projects include roads, setting up agricultural export zones, the development of cottage industries and the formation of new battalions of army to fight “terrorism”.

India also doubled the money for migrants to 400 rupees per month and increased government funds for Kashmiri migrants, mostly Hindus who number 20,000, from 2,400 rupees a month to 3,000 rupees.

Analysts said the package was unveiled by the government in view of the forthcoming elections.

Vajpayee said most parties wanted elections which would restore peace and normality in the held state.

“My government has already said — and I reiterate today that we are committed to holding free and fair elections in the (held) state. The coming elections will herald a new chapter in (occupied) Kashmir,” he said.—AFP