In Budget 2024, the Indian government has outlined plans to decrease its financial assistance to foreign countries for the upcoming fiscal year by 10 percent. Specifically, as revealed in the Interim Budget document disclosed by the government on Thursday, India intends to reduce aid to the Maldives by 22 percent for the 2024-25 financial period.
Allocations for developmental aid to the Maldives have been earmarked at Rs 600 crore, ranking as the third highest among foreign aid disbursements by the government. Notably, this figure marks a decline from the Rs 770.90 crore allocated in 2023-24, which represented a significant surge from the Rs 183.16 crore provided in 2022-23.
A closer examination reveals that in Budget 2023, the government initially earmarked Rs 400 crore for the Maldives, a figure that was subsequently revised upwards to Rs 770.90 crore. Over the past several years, India has consistently served as a primary provider of aid and assistance to the Maldives, extending support across various sectors such as defense, education, healthcare, and infrastructure.
However, the reduction in aid extends beyond the Maldives, encompassing the government's broader allocation for foreign assistance in the upcoming fiscal year. India has allocated Rs 4883.56 crore for foreign aid in 2024-25, marking a decrease from the Rs 5426.78 crore budgeted in the preceding fiscal period.
Recent diplomatic tensions between India and the Maldives have underscored the complexities within their relationship. This discord arose following derogatory remarks made by certain Maldivian ministers regarding Prime Minister Narendra Modi, precipitated by PM Modi's visit to Lakshadweep and subsequent promotion of the region as a potential tourist destination, perceived by the Maldives as a competitive threat to its tourism-driven economy.
Finance Minister Nirmala Sitharaman's Budget speech on Thursday highlighted a special emphasis on enhancing tourism infrastructure in Lakshadweep, signifying the government's commitment to bolstering the region's appeal as a tourist destination.
Furthermore, the Interim Budget identifies Bhutan and Nepal as the primary recipients of government grants, with Bhutan receiving Rs 2068.56 crore and Nepal Rs 700 crore for developmental assistance. Several other countries, including Afghanistan, Bangladesh, Myanmar, and various Latin American nations, have experienced reductions in aid allocations for the 2024-25 fiscal year, while allocations for Sri Lanka, African countries, Mauritius, and the Seychelles have seen increases.
These grants, dispersed by the government to foreign nations, serve a diverse range of purposes, including support for cultural and heritage projects, as well as disaster relief efforts.
