India's aid to Maldives drops by 22 Percent amid dispute, Bhutan gets Majority Share
In the midst of the diplomatic tensions between India and the Maldives, the interim Budget document released by the government indicates a reduction in New Delhi's development assistance to the island nation. The allocation for the next financial year is expected to decrease by Rs 170 crore, reaching approximately Rs 600 crore. The budget papers reveal that the initial allotment for FY 2023-24 was Rs 400 crore, later revised to Rs 770 crore. This decline in funds for FY 2024-25 signifies a 22% decrease in funding for developmental projects in the archipelago.
This is the second major blow to the Maldives after a 'Boycott Maldives' trend erupted in India that saw Bollywood actors and prominent figures publicly urge Indians to ditch Maldives for Lakshadweep. Indians make up a major share of the foreign tourists who go to the Maldives, which is entirely dependent on its tourism industry. Significantly, finance minister Nirmala Sitharaman announced that projects for port connectivity, tourism infrastructure and amenities will be taken up "on our islands, including Lakshadweep" to address the "emerging fervour" for domestic tourism in the country.
In the interim Budget for the fiscal year 2024-25, the Ministry of External Affairs has been allocated a total of Rs 22,154 crore, showing an increase from the previous year's outlay of Rs 18,050 crore. Reflecting India's 'Neighbourhood First' policy, the largest portion of the aid portfolio is directed towards Bhutan, with an allocation of Rs 2,068 crore. This marks a decrease from the development outlay of Rs 2,400 crore for the Himalayan nation in 2023-24. Additionally, the allocation for Chabahar Port remains unchanged at Rs 100 crore, underscoring India's continued emphasis on connectivity projects with Iran.
In line with India's enduring special relationship with the people of Afghanistan, a budgetary allocation of Rs 200 crore has been designated for the country. Bangladesh is set to receive Rs 120 crore in development aid, while Nepal will be granted Rs 700 crore. As per the budget documents, Sri Lanka is earmarked for development aid amounting to Rs 75 crore, Mauritius is allocated Rs 370 crore, and Myanmar is set to receive Rs 250 crore. Additionally, a separate fund of Rs 200 crore has been allocated for African countries. The overall development assistance to various countries and regions, including Latin America and Eurasia, is estimated at Rs 4,883 crore.
