"The government has...approved in principle to bear the expenditure necessary...for setting up of infrastrcuture, purchase of equipment, conduct of (the) Games and construction of an Asian Games village," said Parliamentary Affairs Minister Pramod Mahajan.
The minister said the IOA had provided initial estimates of six billion rupees ($134.2 million) to host the Games, but precise figures were not yet available.
"The cabinet thought that we'll see what new facilities are needed in New Delhi, what money will be generated through television rights...only then we can decide the exact amount needed," he said.
"The government agreed in principle that if the IOA succeeds in getting the bid, it will stand guarantee for the necessary money so that the Games can be held."
India hosted the first Asian Games in 1951 and the ninth in 1982, both in New Delhi.
Other Games candidates are Malaysia, Qatar and Hong Kong.
The 2002 Games will be held in Pusan, South Korea.
Reuters
India's federal cabinet has approved the staging of the 2006 Asian Games in New Delhi if the Indian Olympic Association (IOA) bid is successful.
