Budget 2024: Aid spending slashed to Maldives; grants to other countries also down

India on Thursday proposed cutting aid to the island nation by 22% in the 2024-25 financial year, amid a diplomatic spat that erupted after Maldivian politicians made derogatory remarks about Prime Minister Narendra Modi.

The Maldives has received Rs 6 billion in development assistance, down from Rs 770.9 billion in 2023-24, according to interim budget documents released by the government.

Notably, the government initially allocated Rs 4 billion for the Maldives in the 2023 budget. But it later exceeded the budget and provided aid of 7.709 billion rupees to neighboring countries.

Foreign aid allocations in the 2024 medium-term budget

Finance Minister Nirmala Sitharaman on Thursday presented the interim Budget 2024, also known as a vote of account. This is a temporary financial plan put forward by the government when it does not have the time or authority to present a full budget.

In the last budget before the 2024 Lok Sabha elections, the federal government allocated around Rs 5,667.56 crore to foreign governments as grants and loans in the financial year 2024-25.

In the financial year 2023-24, the government provided loans of Rs 1,614.36 crore, exceeding the budget estimate of grants and loans for the financial year 2024-25.

According to budget documents, Bhutan has become a major recipient of grants and loans from the Indian government.

Development aid to other neighboring countries such as the Seychelles, Mongolia and Iran’s Chabahar port remained essentially unchanged year-on-year.

Top 10 countries receiving grants from India in FY 2023-24

1. Bhutan – Received Rs 23.99 Crore (including Rs 1614.36 Crore Loan) in 2023-24. The estimate for 2024-25 is Rs 2,069 crore.
2. Maldives – Rs 770.9 billion received in 2023-24. The estimate for 2024-25 is Rs 600 crore.
3. Nepal – 6.5 billion rupees to be received in 2023-24. The estimate for 2024-25 is Rs 700 crore.
4. Myanmar – Rs 3.7 billion to be received in 2023-24.
5. Mauritius – Rs 3.3 billion received in 2023-24.
6. Afghanistan – Rs 2.2 billion received in 2023-24.
7. Bangladesh – 1.3 billion rupees to be received in 2023-24.
8. Sri Lanka – Rs 600 million to be received in 2023-24.
9. Seychelles – Received Rs 9.91 billion in 2023-24.
10. Mongolia – Received Rs 5 Crore in 2023-24.