India’s Interim Budget 2024: Aid Reduction to Maldives Sparks Tensions, Focus on Lakshadweep Development

On Thursday, Finance Minister Nirmala Sitharaman presented the interim budget on behalf of the government. While mentioning the government’s 10 years of work in the budget, the Modi government also delivered a strong blow to the Maldives by reducing assistance by 22% for the fiscal year 2024-25. Sitharaman, in her parliamentary speech, announced budget allocations for various projects in Indian islands, including Lakshadweep, but expressed a reduction in aid for the Maldivian government. Sri Lanka, African countries, Mauritius, and Seychelles, on the other hand, have seen an increase in budget allocations according to the interim budget documents released by the government.For the foundational development in the Maldives, the Indian government has allocated ₹600 crores as assistance, marking the third-largest aid provided to foreign countries. In the fiscal year 2023-24, the Maldives received ₹770.90 crores, showing an increase of over 300% from the ₹183.16 crores given in 2022-23. However, in the interim budget presented on Thursday, Finance Minister Nirmala Sitharaman proposed a 22% reduction in aid to the Maldives.Notably, the Modi government has also implemented a 10% cut in assistance to other foreign countries for the upcoming financial year. India has earmarked ₹4,883.56 crores for foreign aid in 2024-25, a decrease from ₹5,426.78 crores in the 2023-24 budget.Interestingly, Sitharaman mentioned Lakshadweep in her budget speech on Thursday, emphasizing special attention to the development of fundamental infrastructure in the region for promoting tourism.As per the interim budget, Bhutan and Nepal are the top two countries to receive assistance from India. Bhutan is allocated ₹2,068.56 crores for developmental aid, while Nepal receives ₹700 crores. Other countries experiencing a decrease in allocation for the fiscal year 2024-25 include Afghanistan, Bangladesh, Myanmar, and Latin American nations. Conversely, budget allocations have increased for Sri Lanka, African countries, Mauritius, and Seychelles.The recent political controversy between India and the Maldives emerged after certain ministers in the Maldives made disrespectful comments against Prime Minister Narendra Modi. The dispute intensified when PM Modi visited Lakshadweep, promoting the islands as an alternative tourism destination. The ongoing tensions have led to the cancellation of hotel bookings and flight tickets to the Maldives. It is perceived that the new Maldivian President, Mohamed Muijzzu, is pro-China and anti-India.

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Tags – India, Interim Budget 2024, Maldives aid reduction, Lakshadweep development, Foreign aid cut, Budget allocations, Nirmala Sitharaman, Fiscal year 2024-25, Bhutan assistance, Nepal aid, Sri Lanka budget increase, African countries funding, Modi government decisions, Political controversy, Mohamed Muijzzu, Pro-China stance, Tourism promotion, Tensions in India-Maldives relations.