Last Updated on 25/07/2024 by wccexam Desk
India has cut down the aid given to foreign governments. This cut is more than Rs 850 crore. The biggest cut has been made in the funding of Maldives. Apart from Maldives, Bhutan’s funding has also been cut. On the other hand, the financial aid given to Sri Lanka has been increased by more than 300%.
In the first budget of Modi Government 3.0 presented on 23 July, Finance Minister Nirmala Sitharaman has said that India will help foreign governments with Rs 5,668 crore in 2024-25. Whereas, in 2023-24, the government had helped with about Rs 6,542 crore. Accordingly, compared to 2023-24, India has reduced the financial aid given to foreign governments by Rs 874 crore in 2024-25.
How much was cut in what?
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According to the budget document, the biggest cut has been made in the funding of Maldives. The financial aid given to Maldives has been cut by Rs 370 crore.
In 2023-24, the government gave 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, this is just an estimate right now and it can be more or less.
After Maldives, Bhutan has suffered the biggest cut. Nepal is the country which India helps the most. In 2023-24, India had helped Bhutan with Rs 2,399 crore, while in 2024-25 it will get Rs 2,068 crore.
On the other hand, the financial aid received by Sri Lanka has increased more than four times. India had given Sri Lanka only Rs 60 crore in 2023-24. Whereas, in 2024-25, India will help it with Rs 245 crore.
India has cut funding to its neighbours Maldives, Bhutan, Afghanistan, Bangladesh and Myanmar. At the same time, financial aid to Nepal and Sri Lanka has been increased.
Why was funding to Maldives cut?
According to the budget documents, India has given aid of about 1700 crore rupees to Maldives in five years. Apart from this, it will give another 400 crore rupees in the next one year. In this respect, Maldives has been important for India. India has always been helping Maldives. This process started with the independence of Maldives in 1965. India was one of the countries that first recognized Maldives.
Maldives is dependent on India for many of its needs. State Bank of India has been a major financier of Maldives. It is because of SBI that Maldives’ economy has grown stronger. Apart from this, India has also helped a lot in developing Maldives’ infrastructure. India has built everything from hospitals to cricket stadiums, bridges, roads, mosques and colleges there.
But now there has been a major cut in Maldives’ funding. This cut has come at a time when relations between India and Maldives are not the same as before. Relations between India and Maldives have soured since Mohammed Muizzu became president in November last year.
This bitterness had increased further when, after Prime Minister Narendra Modi’s visit to Lakshadweep, three ministers of the Maldives government made comments 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. During his tenure, relations between India and Maldives also improved. Then India also increased the funding of Maldives considerably.
Now it is believed that the growing bitterness between the two countries after Muizzu came to power is being considered the major reason for the cut in funding.
Challenge to China with economic aid!
– 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 a country to which India gives the most help. This year India has allocated a fund of more than two thousand crore rupees for Bhutan.
– Nepal: After Bhutan, Nepal is the country to which India gives the most help. Last year India spent Rs 650 crore in Nepal and this year it will spend Rs 700 crore. In Nepal too, China’s interference has increased in the last few years and China has spent billions of dollars there.
– Bangladesh: It is India’s best neighbour. 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 now and China is coming forward to help it. China recently said that it stands with Bangladesh in its foreign exchange reserve crisis. 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 has been 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 time, its closeness with China has increased. To compete with China, India spends crores of rupees there every year. This year India has kept a fund of Rs 250 crore for Myanmar.
– Sri Lanka: Sri Lanka had moved very close to China during the Mahinda Rajapaksa government. The result was that its economy was destroyed under Chinese debt. Sri Lanka is also a member of BRI. In 2022-23, India had kept Rs 150 crore for Sri Lanka, 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 Taliban coming to power, India has not distanced itself from it. Understand it this way that there has not been much reduction 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.
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 given financial aid for development to countries in many parts of the world.
The countries to which India gives financial aid include Latin American and African countries. But the South Asian countries get the most help from India.
Leaving Pakistan aside, India has spent thousands of crores of rupees on all its neighbours in the past years. In fact, South Asia is becoming a ‘battlefield’ for both China and India.
Through the Belt and Road Initiative (BRI), China has reached all South Asian countries. By doing this, it has surrounded India from all sides. In such a situation, it is necessary to give economic help to India to reduce China’s influence in these countries.
This is the reason why India spends thousands of crores of rupees from Bhutan and Nepal to Myanmar and Maldives.
Where is this money spent?
India has been providing financial aid to all the South Asian countries except Pakistan for a long time. This aid from India is spent on the infrastructure there. With this, schools, colleges, hospitals, roads, bridges, rail network etc. are built there.
After the NDA government came to power, the economic aid given to South Asian countries has increased significantly. The NDA government is trying to keep the neighbours with itself through the ‘Neighbour First Policy’. The reason for this is also China, because even though slowly, China’s interference in these countries has increased. And to reduce China’s influence, it is important for India to keep these countries close to itself.