During this time he witnessed king Gyanendra's rule, the emergence of the alliance between the political parties and the Maoists, the April Uprising, the comprehensive peace agreement and the interim government. As he prepares to leave, Mukherjee spoke to Nepali Times.

Nepali Times: Nepal has gone through a lot during your tenure. What are your feelings as you take up your new assignment?
Shiv Shankar Mukherjee: Believe me, Nepal has been easily the most challenging assignment that I have had in my 36 years of service. For me it has been a unique experience to have served here through a period when Nepal has virtually gone through a rebirth. To have a ringside view of history is a very special feeling indeed.

I know there is a long way to go even now before the Nepali people achieve their goal of peace, stability and prosperity, but one thing I am absolutely sure about is that they will get there. As the representative of India, it was my very special privilege to have been involved in providing whatever support Nepal needed from India in this period of transition. And as I prepare to leave, I know that this will continue to be our policy: to provide all the moral, political, diplomatic and material assistance to Nepal that is within our capabilities to assist Nepal's own effects.

What aspect of the political changes are you most satisfied about?
I think the most satisfactory aspect of the political changes that have taken place in Nepal is the fact that they have arisen out of a mass movement, a genuine people's movement that expressed its desire for democracy and for having a say in the way they are ruled. To any observer it was clear that this was a total and genuine expression of people power and was non-violent yet unstoppable. Another thing that is admirable about the changes that have taken place is the adherence of the political parties to constitutional norms, even in this difficult transition period.

And what were the most frustrating?
Well, I really would not characterise developments as being frustrating or otherwise and I am not simply being diplomatic (laughs). What people find frustrating is usually because of impatience, the desire to seek quick results. For instance, people talk about various delays that have taken place in the peace process because of acts of omission and commission by the political parties.

However, as someone who has witnessed similar conflict situations on the ground in other parts of the world, let me tell you that Nepal has brought the peace where it is now in a space of less than two years, including mainstreaming an insurgency, and this is something that I have not seen or heard about in my almost four decades of service. By any yardstick, Nepal's achievement on this score is not just praiseworthy, it is amazing and I mean this most sincerely. I think those who look at this process in Nepal as full of frustration are those who will always find the glass half empty and not half full.

What advice would you give your successor about how to deal with Nepali sensitivities about "big brother" India?
What I would emphasise is that a vast majority of the population of Nepal at every level, does not wake up every morning and start thinking about his or her "sensitivities" about India. They want to get on with life, want improvement in the family's standard of living, better nutrition. There would be occasions, arising out of the mindset of the past, when those who have a vested interest in trying to muddy this relationship will try to do so, but I would also emphasise that their number and effectiveness is negligible and can safely be ignored most of the time.

I would equally emphasise that a stable and prosperous Nepal continues to be something that is a boon for India and that this goal is what both our countries will work for, in partnership. I would tell him about my experiences when I got out of the valley into the other Nepal, neglected in the past, and the genuine desire for cooperation and development that I have personally witnessed in the course of laying foundation stones or inaugurating our developmental projects 100 times over.

Irritants that crop up from time to time can be dealt with very easily, not just because of the number of institutional mechanisms which have been put in place over the years, but even more so because both countries understand each other well enough to be able to sort these out amicably, with due regard for each other's interests. Frankly, as the large southern neighbour, it is India which should and can go the extra mile in these matters.

There are some who say Nepal is a failing state.
I disagree totally with this view. I have had absolutely no inhibitions in saying so loudly and clearly to a host of visitors from abroad who parachute into this country and develop some kind of instant expertise in the space of 24 hours, which they feel qualifies them to make value judgments about this country which they perhaps could not locate on a map before they got into the plane for Kathmandu.

Nepal is not a failed or failing state. Yes, it can be called a poor country in terms of its GDP and yes, it has a long way to go in terms of development. However, the fact is that it has democratic credentials that should be the envy of many of the countries of the world. It is a vibrant, resilient and open society. It has a free and courageous press and the rule of the law, however flawed.

It has a government that is dealing with the problems of transition that are facing the country, almost for the first time in the history of its existence, with a measure of confidence. No wonder it enjoys the support of the international community in its quest for a Nepal that is at peace with itself and the world. I do not want to name names but by any criteria I would put a large number of countries below Nepal on the list of those which could be identified as failing states.

How optimistic are you about the elections being held on schedule this time?
I know that there is a lot of scepticism about the elections in April. I do not blame those who have their doubts. Postponement of elections in June last year and again in November, for whatever reasons, was certainly disappointing to the people of Nepal, let alone the international community. It looks as though the people have gone from euphoria to realism and now inevitably, human nature being what it is, towards apathy and pessimism. But the developments in recent weeks and the agreements that have been reached by the political parties about the elections, and the fact that they are now collectively announcing their commitment to the elections, I think augurs well for the future.

No matter how much cynicism exists in some quarters, there is a realisation that this time round there will be absolutely no excuse that people will accept for not having elections. I know, as every observer in Nepal knows, that there are those who are for the status quo, but their numbers are minuscule compared with those who believe that the best way for taking the peace process forward is a reasonable free and fair election.

But there are serious obstacles to the elections.
Of course there are obstacles and it would be na?ve to ignore them. First and foremost is the law and order situation, especially in the tarai. This has to be tackled not just as a law and order situation but also politically. As we all know, this is in fact being done. I am confident that the law and order and overall security situation, even if it does not become 100 percent manageable by the time elections are held, will be sufficiently under control to have reasonably free and fair elections in April this year.

The only other obstacle that I can see is those groups that stand to lose their positions and power, and perhaps the comfort of their present existence, if elections are held in a free and fair manner. This I think is an obstacle that can be overcome given that the vast majority of the people of Nepal have made their desire for elections very clear indeed.