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HomeBud ExpectationBudget 2023: Development aid for war-torn Afghanistan unchanged, cuts for Sri Lanka...

Budget 2023: Development aid for war-torn Afghanistan unchanged, cuts for Sri Lanka & Myanmar

Allocation to external affairs ministry for development assistance to foreign countries & projects fell 13% to estimated Rs 5,848.58 crore from Rs 6,750 crore in FY23.

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New Delhi: In Union Budget 2023-24, India has left development assistance to war-torn Afghanistan unchanged (Budget estimates). Meanwhile, aid to cash-strapped Sri Lanka and junta-ruled Myanmar’s was cut by 25 per cent and 33 per cent respectively. 

Announced by Finance Minister Nirmala Sitharaman Wednesday, the budget has allocated Rs 200 crore to the Ministry of External Affairs (MEA) for expenditure on grants and loans to Afghanistan. This remains unchanged from the previous budget’s estimates but is still lower than Rs 350 crore in 2021-22 (Budget estimates), back when Kabul was under a democratic government.

However, revised estimates for FY23 — a mid-season survey indicating how the expenditure will pan out — showed expenditure on Afghanistan at Rs 350 crore.

The Taliban regime has also been urging India to resume several large-scale infrastructure projects in Afghanistan that had previously been in motion through Indian grants and other kinds of assistance. For example, restoration work of ancient fortress Bala Hissar in Afghanistan’s Kabul remains on pause.

After the Taliban takeover in August 2021, India suspended its diplomatic presence in Afghanistan. However, last June, India sent a “technical team” of officials to be based in Kabul.

The total estimate for the MEA’s expenditure on development aid to foreign countries and projects fell 13 per cent to Rs 5,848.58 (Budget estimates) from Rs 6,750 crore in FY23.


Also Read: India can engage the Taliban in a constructive way, says Afghan envoy to India Mamundzay


Cut in aid to Myanmar, Sri Lanka

India has cut development assistance to Myanmar, which has been under a military coup since February 2021, by over one-third from Rs 600 crore in Budget 2022 to Rs 400 crore in Budget 2023 (Budget estimates).

Meanwhile, Sri Lanka, which faces mounting economic challenges after defaulting on debt last year for the first time in its history, has seen its development assistance reduced from Rs 200 crore to Rs 150 crore.

According to Rajiv Bhatia, former ambassador to Myanmar, cuts in aid to the two countries should be interpreted differently.

“With regard to Myanmar, it indicates that the Indian government feels it cannot move forward with major flagship projects like India–Myanmar–Thailand Trilateral Highway and Kaladan Multi-Modal Transit Transport Project, due to the complicated political situation there.”

New Delhi probably feels it is not in a position to launch new initiatives in Myanmar in sectors of education and capacity building, he added.

“As for Sri Lanka, it is a modest reduction in development aid. India has been supportive of Sri Lanka and its attempts to get an IMF bailout so, perhaps they may have thought they could reach some balance between the two,” said the former diplomat.

On 16 January, India told the IMF that it is committed to deliver financing and debt relief to Sri Lanka – assurances necessary for the island country to secure the prospective IMF-supported programme. India was the island nation’s first official creditor, apart from others like China and Japan to send written financing assurances to the IMF.

The aid to another island country, Maldives, has been increased from Rs 360 crore in FY23 to Rs 400 crore in FY24. This comes on the heels of EAM S Jaishankar’s visit to Maldives last month, where he signed pacts on several development projects and kick-started the high-profile Hanimaadhoo International Airport Development Project.

(Edited by Anumeha Saxena)


Also Read: Taliban to press UN for recognition as lack of legitimacy hurts Afghan economy & diplomacy


 

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