Expert View: Soft diplomacy will take a hit due to budgetary crunch

The budget presented by Finance Minister P Chidambaram today allocated Rs 11,719 crore to the Ministry as against Rs 10,062 in the revised budget last year.

The total amount allocated for projects including development and direct aid to foreign countries is Rs 6967 crore as against Rs 5471.93 crore in the revised budget of 2012-13.

Also, non plan budgetary allocation for technical cooperation in 2013-14 is approx Rs 4000 crore against a requirement of Rs 7500 crores for already announced assistance projects in the neighbourhood.

However, officials maintain that the hike will not be sufficient to meet India's commitment for various projects abroad in the coming financial year.

A senior government official has said that the budget crunch would have a “severe” effect on India’s plans to extend assistance to key countries though the ministry has taken measures to insulate ongoing projects. "We have been able to protect our ongoing projects like in Bhutan. In Afghanistan, some of our projects are taking certain amount of time,” said the official, referring to the Salma dam being built in Afghanistan’s Herat province, at a revised cost of Rs1,457.56 crore.

In the budget for 2013-14, there is an increase in the aid component for all countries, except for Maldives, for which the assistance amount of Rs 30 crore remained unchanged.

While last year's revised budget for aid to Bangladesh was Rs 280 crore, the figure in this budget is Rs 580 crore. Rs 3614 crore has been earmarked for Bhutan as compared to Rs 3409.06 crore in the revised budget for 2012-13.

Nepal has been alloted Rs 380 crore as against Rs 270 crore last time while Rs 500 has been budgeted for Sri Lanka as against only Rs 290 crore in revised budget last time; aid to Myanmar has also been increased from revised budget of last year's Rs 125 crore to Rs 450 crore.

Also, India budgetary allocation to Afghanistan has been increased significantly to Rs 648.24 crore from Rs 491.16 crore last time, as also in the aid to African countries from Rs 237.50 crore last time to Rs 300 crore in the current budget.

The foreign ministry had sought Rs.5,600 crore for development partnership programmes in 2012-13 but had received only Rs.4,000 crore, an official said. Besides grant assistance, India extends lines of credit and undertakes manpower training under the Indian Technical and Economic Cooperation (ITEC) programme. Officials in the ministry of external affairs note that in recent years, India’s development partnership projects abroad have expanded considerably.