KOL Report NEW DELHI, Nov 16 - In a candid revelation, Indian Foreign Secretary Shyam Saran said here on Wednesday that India has been carefully monitoring the situation in Nepal, while engaging with ?all the actors? of Nepal?s political crisis. ?The stakes for India [from Nepal?s crisis] are extremely high. So we are carefully monitoring the situation. We are engaged with Nepal, we are engaged with all the actors of Nepal?s crisis ? the monarchy and the political parties,? Saran, also a former envoy to Kathmandu, said. He was speaking after the launching of the book ? The Royal Nepal Army (RNA): Meeting the Maoist Challenge -- by India?s Army?s retired Gorkha officer, Maj. Gen. Ashok Kumar Mehata, at the think-tank, Observer Research Foundation (ORF), in New Delhi. Saran, however, didn?t specify whether his government was also engaged with the rebel Maoist leaders, as widely believed after the last May parleys between Indian left leaders and Maoist emissaries led by No 2 CPN-Maoist leader Dr Babu Ram Bhattarai. Hot on the heels of the meeting between King Gyanendra and Indian Prime Minister Manmohan Singh during the just-concluded Dhaka SAARC Summit, Saran said his government was monitoring the ?evolution of the situation?. The Prime Minister told the king that he needs to consult with the political parties since they are the closest allies of the institution of monarchy, and that it was also necessary to allow Nepal to have a soft-landing, he said. The two heads of state also discussed the roadmap for restoration of democracy at the earliest, he added. ?There?s an optimistic scenario, but there?s also a pessimistic scenario,? he said. At a time when civil society and political leaders in Nepal and India are debating the role of constitutional monarchy in modern Nepal, Saran made it clear that there may be a role for monarchy in Nepal. ?Monarchy can still be a constructive force, and a unifying symbol in Nepal, if it so chooses to,? he said, hoping that the institution does not participate in ?the pell-mell of the everyday problem?. Speaking about the role of the Royal Nepalese Army (RNA) in Nepal?s conflict resolution and transformation, he fondly recalled his days in Nepal as Indian envoy not so long ago, and said, ?RNA is changing [and modernizing] gradually. It can create a space that?s needed to bring about a fundamental change.? He, however, ruled out the possibility of a military solution to the crisis when he said, ?It?s a war which cannot be won by military means alone.? Earlier in the day, Saran also discussed the evolving political situation in Nepal with visiting Nepali Congress President Girija Prasad Koirala. Later, Koirala, who is here on his second medical trip in less than five months, also held talks with Union Home Minister Shivraj Patil.