India's aid to neighbours to go up by Rs 1,500 crore

Who got what

The politics behind foreign aid

NEW DELHI: A new idea floated by the government could tackle China's "Belt and Road Initiative". Finance minister Nirmala Sitharaman said as the world's sixth largest economy, she would provide more resources and attention to the Indian Development Assistance Scheme ( IDEAS ) to enable India to provide concessional financing for development projects in the immediate and near neighbourhood."Mindful of our position as the sixth largest economy, we will look at alternative development models which include private sector equity, multilateral financing, contributions from corporates, non-residents etc. I propose to revamp IDEAS during the current financial year," Sitharaman said during her budget presentation.This should be seen together with an earlier government announcement, which Sitharaman referred to in her speech, to add 18 Indian diplomatic missions in Africa. This was announced in March 2018 and she promised India would open four more embassies this year."Five embassies have already been opened in Rwanda, Djibouti, Equatorial Guinea, Republic of Guinea and Burkina Faso in 2018-19," she said, adding the new embassies would "increase the footprint of India's overseas presence, but also enable us to provide better and more accessible public services, especially to the local Indian community in these countries".Exim Bank, for instance, has been concentrating a number of its loan/aid programmes in Africa. But India has a long way to go before it can be a proper counter to China's overwhelming presence in that continent. Chinese President Xi Jinping recently announced over $60 billion in aid to Africa. According to reports, India's total trade with the African region during 2017-18 was $62.69 billion while China's African trade crossed over $220 billion.While India's total aid to countries will go up by around Rs 1,500 crore in 2019-20, the main beneficiaries seem to be Nepal, Mauritius, Maldives and African countries. There was a substantial increase in allocation for Sri Lanka too.Though Bhutan tops the chart in terms of the amount extended, it is Mauritius (67%), Sri Lanka (52%), Bangladesh (46%) and Nepal (40%) that got big hikes in allocation in this year's Union Budget.The increase and decrease in grants also, sometimes, reflects the politics of the times. For instance, while the flow of funds to Nepal has been consistent, it went up for Maldives after the change in government last year. Similarly, the increase in aid to India's extended neighbourhood (Mauritius and Seychelles) is about forging maritime ties in the Indian Ocean.