Budget 2016: Days after Oli visit, 40% cut in aid to Nepal

In the Union Budget presented Monday, the Centre allocated Rs 300 crore for aid to Nepal for 2016-17, a massive decline from last year’s allocation of Rs 420 crore.

Nepal's Prime Minister Khadga Prasad Sharma Oli (R) and his Indian counterpart Narendra Modi walk during his ceremonial reception at the forecourt of India's Rashtrapati Bhavan presidential palace in New Delhi, India, February 20, 2016. (REUTERS/Adnan Abidi)

(File Photo) Nepal’s Prime Minister Khadga Prasad Sharma Oli (R) and his Indian counterpart Narendra Modi. (Source: REUTERS)

India reduced its financial aid to Nepal by 40 per cent Monday. The cut that came days after Nepal PM K P Sharma Oli’s visit to mend ties and “clear misunderstandings” was expected to raise eyebrows in Kathmandu.

In the Union Budget presented Monday, the Centre allocated Rs 300 crore for aid to Nepal for 2016-17, a massive decline from last year’s allocation of Rs 420 crore. However, government sources told The Indian Express that the cut was not an indicator of New Delhi’s confidence in the Oli government. “The issue in Nepal is that of absorption capacity, and they have been quite poor in utilising the aid being given to them…Look at the earthquake reconstruction programme…they have just set up the reconstruction authority in Nepal. The aid last year could not be utilised, which led to revision of budget estimates,” an official said.

Overall, the Ministry of External Affairs was allocated Rs 14,662 crore, a cut of Rs 378 crore compared to last year, even as the focus of the outlay remained on development projects implemented by India in neighbouring countries including Bhutan and Afghanistan.

[related-post]

Story continues below this ad

While financial aid to majority of countries — Bangladesh (down from Rs 250 cr to Rs 150 cr), Bhutan (down from Rs 6,160.20 cr to Rs 5,490 cr), Sri Lanka ( cut from Rs 500 cr to Rs 230 cr) — was reduced, two countries witnessed a hike in assistance: Myanmar (up from Rs 250 cr to 400 cr) and Maldives (up from Rs 25 cr to Rs 40 cr).

Officials attributed the hike to new projects coming up in these two countries. Out of the total allocation to the MEA, Rs 4,720 crore was given to the ministry under plan outlay, while Rs 9,942.66 crore was set aside as non-plan expenditure.

While Rs 15,041.08 crore was given to the ministry in 2015-16 as per revised estimate, the total allocation made for next fiscal is 2.5 per cent less than last year. Out of total international assistance, Rs 4510 crore will be plan expenditure and Rs 3,060.62 crore non-plan expenditure.

Shubhajit Roy

Shubhajit Roy, Diplomatic Editor at The Indian Express, has been a journalist for more than 25 years now. Roy joined The Indian Express in October 2003 and has been reporting on foreign affairs for more than 17 years now. Based in Delhi, he has also led the National government and political bureau at The Indian Express in Delhi — a team of reporters who cover the national government and politics for the newspaper. He has got the Ramnath Goenka Journalism award for Excellence in Journalism ‘2016. He got this award for his coverage of the Holey Bakery attack in Dhaka and its aftermath. He also got the IIMCAA Award for the Journalist of the Year, 2022, (Jury’s special mention) for his coverage of the fall of Kabul in August 2021 — he was one of the few Indian journalists in Kabul and the only mainstream newspaper to have covered the Taliban’s capture of power in mid-August, 2021. ... Read More

Disquiet in film board: ‘Censorship raj’, no meeting in 6 years, no reports, term lapsed

1 hr ago

A controversial decision-making process has set off divisions within the CBFC, and cast a long regulatory shadow on the Indian film industry as it aspires to be a global player . The Indian Express spoke to several top filmmakers and board members to find that a not-so-silent storm is brewing within the fraternity — and inside the CBFC, too — over what many call a “one-man show”.

View all shorts

Live Blog

PHOTOS