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Union Budget: In the year of G20 presidency, India spends less in the neighbourhood

Budget allocation adjusted to the amount usually spent on the country

India assumes G20 presidency

India is still committed to Afghanistan, despite the Taliban continuing to be in power. The allocated funds for the country stood at a steady Rs 200 crore. This is the second year running that Afghanistan has been allotted Rs 200 crore.

 There has been a marginal increase in the amount allotted to Bhutan and Maldives. Bhutan was allocated Rs 2266.24 crore in the previous year; an amount that has been increased to Rs. 2,400 crore this year. Maldives too, saw an increase of Rs 40 crore to stand at Rs 400 crore. 

This is a big diplomatic year for India. The year of the G20 President. And as the finance minister said, “it was a 'unique’ opportunity to strengthen the country's role in the world economic order when countries across the globe are facing various challenges.” 

India is spending less in the neighbourhood this year. However, the reduction in the spending possibly does not reflect India’s lack of interest. The budget for the allocation has been adjusted to the amount usually spent on the country.

Mongolia, for example, was allocated Rs 12 crore in 2022-23. The amount set aside for the country was more to announce India’s intent. The country made its presence felt in the budget last year—and with a bang. The signal was clear: India wanted to make a splash in a country that China is sensitive about. Despite the intent, only Rs 2.5 crore was spent. This year, India has chosen to have a more modest target of Rs 7 crore—still large enough to make China uncomfortable. Yet, more practical in terms of expenditure. 

This sort of ‘correction’ is reflected throughout the neighbourhood. Poll-bound Bangladesh, for example, was allocated Rs 300 crore in the budget 2022-2023. The amount spent was only Rs 170 crore. And this year, the amount allocated is Rs 200 crore. Similarly, the previous budget set out Rs 600 crore for Myanmar. The amount spent during last year was Rs 500 crore. This year, Myanmar has been allocated Rs 400 crore.

The allocation for Nepal has been similarly adjusted. In 2022-23, Nepal was allocated a whopping Rs 750 crore. An increase of almost Rs 300 crore from the previous budget which was Rs 446.43 crore. However, only Rs 425 crore was utilised. The allocation for 2023-24 was Rs. 550 crore. 

India’s commitment to the Chabahar Port, like Afghanistan, has been continuous at Rs 100 crore. The port, which has been at the centrepin of India’s great connectivity dream, has acquired even more significance during the Ukraine conflict. The Chabahar Port has the ability to be a gamechanger, especially at a time when India is hoping to boost trade with Russia. It can also be a way for Russia to explore other routes.


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