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Despite limited fiscal space, India’s Neighbourhood First policy reflected in budget allocation

Union Budget-- what does it have for India's neigbourhood?

India’s focus on Neigbourhood First has got a boost as Finance Minister Nirmala Sitharaman in her fourth Union Budget earmarked Rs 300 crore towards financial assistance to Bangladesh in 2022-23, up from Rs 200 crore announced in 2021-22. Prime Minister Narendra Modi who visited Dhaka in March 2021 called Bangladesh a soho jatri or a co-traveller.

“Despite the Covid 19 related fiscal challenges, the thrust has been on the foreign affairs with special emphasis on the immediate neighbourhood,” an insider told India Narrative.

Also read: Budget 2022 jacks up spending on infrastructure projects by 35.4% in big push for growth & jobs

A sum of Rs 600 crore has been directed to Myanmar while it is Rs 360 crore for the Maldives.

Nepal too will get Rs 750 crore from India in the new financial year beginning April. The highest recipient remains Bhutan, which has been allocated Rs 2266.24 crore. The African countries have been provided development assistance of Rs 250 crore, while it is Rs 140 crore for the Eurasian countries.

Prime Minister Narendra Modi has reiterated the need to focus on the Neighbourhood First policy to ensure development in the region.