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Tight-fisted neighbour? Indian aid to SAARC nations falls
Why it is in news?
- India’s financial assistance to SAARC neighbours declined considerably in the past five years, a reply by the government in Parliament this week showed.
More in news
- According to the figures, the GA actually fell from ₹5,928.6 crore for 2013-14 to ₹3,483.6 crore for 2017-18 for Afghanistan, Bangladesh, Bhutan, the Maldives, Nepal and Sri Lanka combined.
- Significantly, the drop for most SAARC countries was most steep in 2014, the year the NDA government launched its tenure with the “Neighbourhood First” slogan.
- The one exception was the Maldives, to which Indian assistance has been consistently increasing year on year since 2013, despite the dip in bilateral ties.
- Indian largesse appears to have increased ten-fold to the islands: from ₹9.67 crore in 2013-14 to ₹109.24 crore.
- Indian diplomat now serving in the region, explaining that the GA figures did not include the lines of credit extended to Nepal, Sri Lanka and Bangladesh. These lines of credit are given at the minimal interest rates of 1-2%, compared with loans offered by China at 6-7%.
Why decline in aid?
- One of the major reasons for the decline was that many projects had been completed in the neighbourhood, and there were fewer projects started in the period since 2014.
- In Afghanistan, India has shifted to work on small development projects (SDPs) rather than the ambitious highways, dams and big building projects that were started in 2008-09.
- In Bangladesh, the main grant for land acquisition for the Akhaura-Agartala rail “last link” project has now been completed.
- In Bhutan, which has always received the largest share of Indian assistance, the assistance required for major hydroelectric power plants like Punatsanghchu 1 and 2 and Mangdechu has been disbursed 75-90%, said officials, while Indian assistance to Bhutan’s 11th five-year plan (2013-2017) has been handed over nearly fully.
- In Sri Lanka, the decline was explained by delays in land acquisition for 15,000 homes to be built by India in the plantation areas, though the work on 45,000 homes in the north and east of the island has been completed.
- India is still completing three main projects in Maldives: a police academy, a coastal radar project, and the refit of MNDF ship Huravee.
- An offer to build a new Defence Ministry building is pending, which explains why the Maldives alone is the outlier to an otherwise declining trend in neighbourhood aid.
Source
The Hindu