India has been "honest" in helping Sri Lanka's war victims and there was no reason to doubt New Delhi's role in helping Colombo rehabilitate the displaced people, a senior minister said on Wednesday, responding to India allocating Rs 500 crore for the refugees.

Agriculture minister Maithripala Sirisena said New Delhi had extended assistance on the basis of excellent bilateral relations and warned that "misconception and rumours" could harm those ties.

"No one should be doubtful about her (India's) role in Sri Lanka," the minister said. "India has extended assistance to Sri Lanka purely on the basis of cordial relations enjoyed by the two countries for centuries," Sirisena, who is a senior figure in the ruling party, said.

He said the Indian government is fully aware of the situation in Sri Lanka and is honest in helping Sri Lanka at this crucial juncture.

Dismissing criticism from some sections over the allocation of the sum in India's budget for Sri Lanka's 300,000 war-affected civilians, Sirisena said such "misconception" would affect the cordial relations enjoyed by the two countries for centuries.