Budget 2024: India Cuts Aid To Bhutan, Maldives’ Allocation Unchanged

The Ministry of External Affairs (MEA) has been allocated ₹22,155 crore for FY 2024-25. This amount is higher than the ₹18,050 crore allocated in FY 2023-24 but falls short of the revised estimate of ₹29,121 crore for the same fiscal year.

Bhutan has emerged as the top recipient of Indian government aid to foreign countries, according to the Union Budget documents released after finance minister Nirmala Sitharaman presented the Union Budget 2024-25 on Tuesday.

Top Recipients of Indian Aid

Bhutan is set to receive ₹2,068.56 crore in aid from India for FY 2024-25. This figure is lower than last year's allocation of ₹2,400 crore and slightly less than the revised budget utilisation of ₹2,398.97 crore for FY 2023-24. The Maldives will receive ₹400 crore, unchanged from last year, although the revised budget for FY 2023-24 shows a higher amount of ₹770.90 crore.

Other significant recipients include Nepal with ₹700 crore and Mauritius with ₹370 crore. Myanmar will receive ₹250 crore, while Sri Lanka is allocated ₹245 crore. Afghanistan and African countries are each set to receive ₹200 crore. Bangladesh will get ₹120 crore, Seychelles ₹40 crore, and Latin American countries will receive ₹30 crore.

Fiscal Deficit Target

During the presentation of the Union Budget for 2024-25, finance minister Nirmala Sitharaman set the fiscal deficit target at 4.9 per cent of GDP. This is lower than the 5.1% target announced in the Interim Budget on February 1. For FY 2023-24, the initial fiscal deficit target was 5.9 per cent of GDP, which was later revised down to 5.8 per cent.

The fiscal deficit represents the gap between the government's total revenue and total expenditure, indicating how much the government may need to borrow. The government aims to reduce the fiscal deficit to below 4.5 per cent of GDP by FY 2025-26.

Budget Estimates and Revised Figures

The budget estimate for MEA for FY 2024-25 stands at ₹22,155 crore, which is an increase from last year's allocation but less than this year's revised estimate of ₹29,121 crore. The Indian government provided a total of ₹6,541.79 crore to foreign governments as per revised estimates for FY 2023-24, surpassing the initial budget estimate of ₹5,848.58 crore for that year.

The estimate for foreign aid in FY 2024-25 is set at ₹5,667.56 crore.