India cuts budget allocation to Nepal by 33 percent

  • February 2, 2020

India’s Finance Minister Nirmala Sitharaman holds budget papers as she leaves her office to present the federal budget in the parliament in New Delhi, India, Feb. 1, 2020. REUTERS/Anushree Fadnavis

India has drastically reduced its aid to Nepal for the upcoming fiscal year 2020/21.

Indian Finance Minister Nirmala Sitharaman presented the budget yesterday and announced a budget cut of whopping 33 percent to Nepal.

As per the budget speech, the southern neighbor allocated INR8 billion (Rs12.8 billion) for Nepal.

In the fiscal year 2019-20, India had allocated INR10.5 billion (Rs16.8 billion), which was later revised to INR12 billion (Rs19.2 billion).

The budget allocation for most of the aid-receiving countries has been slashed compared to the allocated or revised estimation in the current fiscal year 2019/20.

However, Nepal is still the recipient of the second largest aid allocation after Bhutan Despite a decline in the budgetary allocation. Bhutan is usually the largest aid recipient from India.

Afghanistan, Maldives, Bangladesh and Sri Lanka are the other South Asian nations that will receive Indian aid.

Although India has been allocating budget for Nepal, Nepal government does not have data about how the amount is being spent.