Union Budget 2013: Cuts bite India’s overseas outreach

NEW DELHI: A sluggish economy will see India keeping its date with its aid promises to key countries, but only just. Finance minister P Chidambaram’s budget will mean that India will have to curb some very important development assistance programmes in several countries. ministry of foreign affairs had asked for Rs 7,500 crore for development assistance programmes, an important diplomatic initiative in the neighbourhood, but the FM only gave Rs 4,092 crore. This will hit over 40% of the programmes. This is bound to have an impact since China’s deep pockets enable it to reach out across continents to push influence. India will keep its promise of financial aids to several key neighbours because Chidambaram has made just enough increases in the outlay for the ministry of foreign affairs (MEA), which, after being adjusted for inflation, is more or less the same as last year. The difficulties for MEA come in the fact that the new technology and economic development programmes, which are becoming an integral part of India’s development assistance, has taken severe knocks. Ditto for MEA’s cultural diplomacy. MEA will have to make do with less, despite requiring more. India’s global footprint has increased substantially to the extent that India provides assistance not just in its immediate neighbourhood, but as faraway as Mali, where India has promised $100 million in development assistance. Bangladesh, Bhutan, Myanmar and Afghanistan remain top recipient countries for Indian aid in 2013-14. Bangladesh, which has been assiduously wooed by India over the past couple of years, will see a jump in Indian budgetary outlay from Rs 280 crore in 2012 to Rs 580 crore in the coming fiscal. Just last week, foreign minister Salman Khurshid was in Dhaka gifting a new batch of articulated buses for the Bangladeshi capital. This investment in Bangladesh will continue. Bhutan has traditionally been the highest recipient of Indian assistance, and nobody has emerged yet to topple Thimphu from that pole position. In 2013, Bhutan will get about Rs 3,514 crore, but up only marginally from Rs 3,409 crore it was allocated in 2012. Myanmar will see a jump as well from Rs 125 crore to Rs 450 crore. India is investing heavily in that country with several key strategic priorities in view as a gateway to Asean, as the place where India is a counterbalance to China and where India can work out peace agreements and connectivity for the northeastern states. One would imagine that as Afghanistan heads to a NATO-free existence India would significantly up its contribution to the country. But while there has been a change, it is an insignificant amount rising from almost Rs 500 crore to almost Rs 650 crore. But in all these countries too, new programmes are likely to become a casualty. In fact, India’s development assistance programme comes in the very popular ITEC programme, where India trains over 8,500 civilians from 161 countries in 280 courses. The lines of credit that India extends has grown exponentially in the past decade: India now extends LOC of over $9 billion, of which 60% is in Africa. The grants make up the third pillar which is mainly in the neighbourhood. These have largely been preserved, albeit at virtually the same levels as previous years. MEA has steadily cut down on the Haj subsidy and this year it stands at about Rs 3 crore.Union Budget 2013 Budget news 2013 ​Economic Survey