India, a nation positioning itself as a superpower, is opening up its purse for its cash-strapped neighbours.
Aid to foreign nations has been doubled to Rs 7,018 crore in this budget, from what it was two years back. The allocation amounts to a four-fold increase from 2003, when it reworked the aid strategy to promote India globally.
Interestingly, this generosity coincides with decisions of developed countries such as the UK to discontinue aid to India.
However, 92% of grants and loans will cater to a handful of nations in the neighbourhood leaving India little scope to make its presence felt in the world.
Bhutan, a major recipient through years, receives over 50% of the total Indian foreign aid, while Afghanistan, Sri Lanka, Bangladesh, Nepal, Myanmar constitutes another 40%.
In contrast, Chinese aid is distributed more evenly reaching many developing nations in Asia, Africa, Latin America and Eastern Europe and is used as a powerful diplomatic tool to expand its political and trade interests. The scale of aid and operations too varies between the two nations.
In 2012-13, India’s foreign aid was $1 billion (excluding scientific collaborations etc) where as the corresponding Chinese aid was over $10 billion.
“India is no match to China in terms of aid — money or operations. But given our global ambitions, we should strategically reposition our aid to expect good returns,” says Sachin Chaturvedi, senior fellow, Research and Information System for Developing Countries, a think-tank on external affairs.