India Cuts Aid Budget For Neighbours

New Delhi: The budget has set aside Rs. 200 crore as aid to Bangladesh, the same as last year (see table below). This may appear odd given that Prime Minister Sheikh Hasina faces an election towards the end of the year, and in that sense, India as a staunch supporter should have increased aid. It may be less to do with politics, given that relations are otherwise excellent. It could be more about the MEA needing funds for two high-profile summits due this year, the SCO in September and the G20 in November. In fact, the MEA’s overall budget has gone up by a little over four per cent. Do also note, that going by the MEA’s figures, India has extended over $9 billion in preferential loans to Dhaka over the last many years, chiefly for connectivity projects.

Aid to Afghanistan has also remained the same (Rs. 200 crore, see table), indicating continuing doubts about the Taliban regime in Kabul, yet the government sees the need to not lose touch with common people. Another 50,000 tons of grain is expected to be sent. Three tranches of medicine and equipment had been sent earlier with more likely. Visas for Afghan students however remain suspended.

Maldives has seen a small increase clearly to speed up work on key projects announced earlier. In Bhutan as expected, the increased amount of aid was increased to Thimphu. Bhutan has always been getting significant financial aid from India, both under plan and non-plan expenditure heads

The money for other neighbours has been slashed: Nepal which elected a communist government to power last November, has had its aid budget cut from Rs. 750 crore to 550 crore (see table). Whether this is a political message to Kathmandu can be debated. Nepal’s new Prime Minister Pushpa Kamal Dahal also known as Prachanda, has made good noises about India since taking over and, according to media reports, is expected to make his first foreign visit to Delhi this month or the next.

Myanmar too has lost out, not surprising given the civil war ravaging the country and the military junta showing so signs of wanting to change. India’s concern about the junta’s ability to deter operations by north-eastern rebels maybe growing, but such concerns are only voiced behind closed doors. India’s ties with the junta remain intact with the high point being a Kilo class submarine transferred to Myanmar two years ago.

In the case of Sri Lanka, India has done some pretty heavy lifting to help that country out of the current economic crisis. From supplies of food and medicine to money to shore up finances, India has gone the extra mile. External Affairs Minister S Jaishankar was recently in Colombo and further support may be on the cards. Aid to Africa (Rs 250 Cr) and Other Developing Countries (ODCs) (Rs 150 Cr) remained the same as last year.