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The Indian ‘Foreign Policy’ of Budget 2018

Last week the Modi government declared its last full budget of this term. To summarize it in nutshell we could say that ‘Budget - 2018’ unveiled world’s largest government-funded healthcare program. It largely focused on farmers, lower-middle class, young jobseekers, poor and senior citizens. Though it got numerous but mixed reactions from industry and people, there is one aspect that many may have ignored.



I am talking about allocation to the External Affairs Ministry i.e. to India's 'Foreign Policy'. Among other aspects, some of the activities under this head include India helping various countries with developmental projects and also our efforts at expanding our soft power. Some highlights which could be summarized from this year’s Budget include –

- The External Affairs Ministry has been allocated a total ₹15,011 crore. There is a marginal increase of ₹1,321 crore over the last year.

- ₹5545 crore are allocated for India’s development and diplomatic engagement under the ‘Neighbourhood First’ policy.

- With emphasis on expanding soft power, important allocation is made to the cultural arm of the Ministry – the Indian Council of Cultural Relations (ICCR) that has received an increased allocation of ₹20 crore to touch ₹255 crore. Also, the Nalanda University has been granted ₹200 crore.

- ₹7,570.62 crore has been allocated for international aid programmes.

- Bhutan is the largest recipient of the External Affairs Ministry’s allocation. It is traditionally maintained at this position with this year’s allocation increased by ₹71 crore to touch ₹2,650 crore.

- Nepal got a major hike in allocation with ₹650 crore. It is the largest and third consecutive annual rise. In 2016-17 Nepal had received ₹332.72 crore. Experts feel the budgetary hike is likely due to the Indian help to Nepal to recover from 2015 earthquake. Newspapers have indicated that researchers from the Ministry’s think tank – the Research and Information System for Developing Countries (RIS), have said that the Terai road network and railway connectivity plans are also likely to feature in the increased allocation.

- Myanmar’s allocation has improved from ₹220 crore of last year to ₹280 crore. 

- The new initiatives for building infrastructure in Chabahar port of Iran and Seychelles are given allocations of ₹150 crore and ₹350 crore each.

- Assistance for Afghanistan stands at ₹520 crore, for Myanmar at ₹400 crore, for Maldives at ₹40 crore.

India seems to have a focus on its ‘Act East Policy’, neighbours and partners in Indian Ocean Region.

About Mihir Nagarkar

Mihir Nagarkar
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