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.

2 min readNew DelhiMar 1, 2016 03:41 AM IST First published on: Mar 1, 2016 at 03:41 AM IST

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.

Shubhajit Roy

Shubhajit Roy, Diplomatic Editor at The Indian Express, has been a journalist for more than 27 years... Read More