India has cut the aid given to foreign governments. This deduction is more than Rs 850 crore. The biggest cut has been made in the funding of Maldives. Apart from Maldives, funding to Bhutan has also been cut. On the other hand, the financial assistance given to Sri Lanka has increased by more than 300%.
In the first budget of Modi Government 3.0 presented on July 23, Finance Minister Nirmala Sitharaman has said that India will provide assistance of Rs 5,668 crore to foreign governments in 2024-25. Whereas, in 2023-24, the government had provided assistance of approximately Rs 6,542 crore. According to this, compared to 2023-24, India has reduced the financial assistance given to foreign governments in 2024-25 by Rs 874 crore.
What was cut by how much?
According to the budget document, the biggest cut has been in the funding of Maldives. The financial aid to Maldives has been reduced by Rs 370 crore.
In 2023-24, the government had given financial assistance of Rs 770 crore to Maldives. But in 2024-25, the government has kept a fund of Rs 400 crore for Maldives. However, right now this is just an estimate and it may be more or less.
After Maldives, Bhutan has had the biggest cut. Nepal is the country which India helps the most. In 2023-24, India had provided assistance of Rs 2,399 crore to Bhutan, while in 2024-25 it will get assistance of Rs 2,068 crore.
On the other hand, the financial aid received by Sri Lanka has increased more than four times. India had provided only Rs 60 crore assistance to Sri Lanka in 2023-24. Whereas, in 2024-25, India will help it with Rs 245 crore.
India has cut funding to its neighbors Maldives, Bhutan, Afghanistan, Bangladesh and Myanmar. At the same time, financial assistance to Nepal and Sri Lanka has been increased.
Why the cut in funding to Maldives?
According to budget documents, India has given assistance of approximately Rs 1700 crore to Maldives in five years. Apart from this, another Rs 400 crore will be given in the next year. Accordingly, Maldives has been important for India. India has always been helping Maldives. This trend started with the independence of Maldives in 1965. India was one of the countries which first recognized Maldives.
Maldives is dependent on India for many needs. State Bank of India has been a major financier of Maldives. It is because of SBI that the economy of Maldives became stronger. Apart from this, India has also helped a lot in developing the infrastructure of Maldives. India has built everything from hospital to cricket stadium, bridge, road, mosque and college there.
But now there has been a big cut in the funding of Maldives. This cut has happened at a time when the relations between India and Maldives are not like before. Relations between India and Maldives have soured since Mohammed Muizzu became President in November last year.
This sourness had increased further when, after Prime Minister Narendra Modi’s visit to Lakshadweep, three ministers of the Maldives government had commented against PM Modi and India. Not only this, Muizzu is also considered a supporter of China.
Before Muizzu, Ibrahim Mohammed Solih was the President of Maldives. Solih is considered close to India. Relations between India and Maldives also improved during his period. At that time India had also increased the funding of Maldives significantly.
It is now believed that the increased bitterness between the two countries due to Muizzu coming to power is being considered a major reason for the cut in funding.
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– Bhutan: Bhutan, which is surrounded by land from all sides, now seems to be moving closer to China. Talks to resolve the border dispute with China are in the final stages. Bhutan is the country to which India helps the most. This year, India has kept a fund of more than two thousand crore rupees for Bhutan.
– Nepal: After Bhutan, Nepal is the country which India helps the most. Last year, India had spent Rs 650 crore in Nepal and this year it will spend Rs 700 crore. China’s interference in Nepal has also increased in the last few years and China has spent billions of dollars there.
– Bangladesh: India’s best neighbor. Since 2009, there is a government of Awami League Party led by Sheikh Hasina, which is considered ‘Pro-India’. But the economy there is also deteriorating and China is coming forward to help it. China had recently said that it stands with Bangladesh in the crisis of its foreign exchange reserves. Bangladesh is also a member of BRI. India will spend Rs 120 crore in Bangladesh this year. This is Rs 10 crore less than last year.
– Myanmar: Myanmar is a member of China’s BRI since 2017. China’s debt on it is increasing. Not only this, China’s interference in Myanmar’s politics and economy has also increased. The army has been running the government in Myanmar for three years. During this period, his closeness to China has increased further. To counter China, India spends crores of rupees every year there too. This year, India has kept a fund of Rs 250 crore for Myanmar.
– Sri Lanka: During the government of Mahinda Rajapaksa, Sri Lanka had moved very close to China. The result was that China’s economy was ruined under its debt. Sri Lanka is also a member of BRI. India had kept Rs 150 crore for Sri Lanka in 2022-23, but spent only Rs 60 crore. This year India has kept Rs 245 crore for Sri Lanka.
– Afghanistan: India is working on many projects here. Despite the arrival of Taliban rule, India has not distanced itself from it. Understand this that there has not been much cut in the aid given to Afghanistan. India spent Rs 220 crore in Afghanistan in 2023-24, while a budget of Rs 200 crore has been kept for 2024-25.
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Why is it important to keep neighbors together?
There was a time when India used to ask for financial help from other countries, but in a few years, India has transformed itself into a big ‘donor’. India has provided economic assistance for development to countries in many parts of the world.
Latin American and African countries are also included in the countries to which India provides financial assistance. But South Asian countries get maximum help from India.
Barring Pakistan, India has spent thousands of crores of rupees on all its neighbors in the past years. In fact, if seen, South Asia is also becoming a ‘battle arena’ for China and India.
Through the Belt and Road Initiative (BRI), China has reached all South Asian countries. By doing this he has surrounded India from all sides. In such a situation, it is necessary to provide economic assistance to India to reduce the influence of China in these countries.
This is the reason why India spends thousands of crores of rupees in countries ranging from Bhutan and Nepal to Myanmar and Maldives.
Where is this money spent?
India has been providing financial assistance to all South Asian countries except Pakistan for a long time. This help received from India is spent on the infrastructure there. With this, schools, colleges, hospitals, roads, bridges, rail networks etc. are built there.
After the coming of the NDA government, the financial assistance given to South Asian countries has increased significantly. The NDA government is trying to keep its neighbors with itself through ‘Neighbor First Policy’. The reason for this is also China, because although slowly but surely China’s interference in these countries has increased. And to reduce the influence of China, it is important for India to keep these countries close to itself.