In a Joint Statement issued at the end of four-day visit of Sri Lankan President Mahinda Rajapakse in New Delhi, India deplored ceasefire violations there and hoped "a political settlement of the problem based on devolution, openness, transparency and inclusiveness would emerge through talks between the parties concerned."

Rajapakse, during his talks with Prime Minister Manmohan Singh [Images], briefed him on his approach to the peace process to achieve "maximum devolution" which preserves the unity and territorial integrity of Sri Lanka, the statement noted. "The two sides agreed that an enduring solution can emerge only through internal political processes that promote consensus and reconciliation," it said.

The Indian government offered to support Sri Lanka's efforts to reconstruction and development in North and East of the country through technical and financial assistance. The two sides decided to build jointly a coal-based power project with a capacity of 500 MW in Trincomalee region.

It will be joint venture between National Thermal Power [Get Quote] Company and Sri Lankan government entity Ceylon Electricity Board, the statement said. A detailed Memorandum of Understanding for setting up the project is to be signed later.