India drastically cuts aid to Nepal

Published On: February 2, 2020 07:43 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 2: India has drastically slashed its aid to Nepal for the upcoming fiscal year 2020/21. 

The southern neighbor has announced a budget cut of whopping 33 percent to Nepal from the revised estimated aid to Nepal in the current fiscal year 2019/2020. 

Releasing the annual Union Budget for FY 2020/21 of India on Saturday, Minister for Finance Nirmala Sitharaman reduced the budget for most of the aid-receiving countries besides a few exceptions. The foreign aid of India is disbursed through India’s Ministry of External Affairs (MEA). 

The aid allocation for most of the countries has fallen compared to the allocated or revised estimation in the current fiscal year 2019/20. India lowered the total aid allocation to various countries to IRs 69.07 billion from its revised estimate of IRs 75.83 billion in FY2019/20. 

Nepal is going to receive IRs 8 billion (Rs 12.5 billion) in aid through the MEA in 2020/21, down by IRs 4 billion (Rs 6.4 billion) of the revised estimate of aid in the current fiscal year 2019/20, according to the annual budget of India. 

Even after the reduction of the aid, Nepal is going to be the third largest aid recipient among a dozen countries that directly benefit from the financial assistance of India. With a total of IRs 28.85 billion in aid allocation, Bhutan remains the largest aid recipient from India. 

Mauritius takes Nepal’s place as the second-largest aid recipient for 2020/21 with an allocation of IRs 10.25 billion. 

According to the revised estimate of aid allocation for the current fiscal year, Nepal is the second highest aid recipient from India.

Meanwhile, India has increased its aid to Bangladesh by IRs 500 million and Myanmar by IRS 1.7 billion and Seychelles by 900 million.

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