India cuts budget assistance to Bhutan

India has slashed its aid assistance to its closest neighbour, technically for the first time since India begun its financial assistance to Bhutan.

The annual budget for 2016/17 presented by the union parliament by Indian Finance Minister Arun Jaitley states that the assistance to Bhutan has been decreased by over Rs 6B compared to the budget announcement last year. However, compared with the revised assistance of last year, budget assistance to Bhutan has decreased by only Rs 1.2B.

While non-plan assistance has been kept steady at Rs 12B, the new budget targets to decrease the plan-assistance to Bhutan.

Of Rs 42.9B plan-assistance, Rs 16.145B will be grants and Rs 26.755B will be in the form of loans.

Last year the Modi government had substantially increased assistance to Bhutan. The government hasn’t mentioned any reasons for cutting the assistance. The Modi government has also slashed assistance to Nepal and Bangladesh this year.