Hit by fund crunch, MEA unable to fulfill international diplomatic commitments

The MEA in a letter to the cabinet committee on security (CCS) has expressed its helplessness in fulfilling development-related promises made to neighbouring as well as other countries citing budgetary constraints.

The fiscal failure has left the Indian government red faced on the international platform after the ongoing projects abroad were affected severely. Following the failure of the MEA to release additional 100-million-dollar grant to Bangladesh, people hired for infrastructure-related projects have not been paid their salaries for months.

 As per the agreement, India was supposed to provide an aid of 200 million USD to Bangladesh. So far only 50 per cent of the aid (100 million USD) has been disbursed and the rest is still pending, which might affect the diplomatic ties between the two countries.

‘Due to the problem, three hydropower projects in Bhutan have been hit. We have also failed to release funds for some projects in Africa as committed in the India-Africa Forum Summit. Even digitisation projects in 34 Indian missions are suffering due to the monetary crisis. There is a huge gap in the actual expenses and the fund available with us,’ an MEA source said.

While elaborating on the three hydropower projects in Bhutan, the official said, ‘We have asked for Rs 3,726 crore in the 2013-14 financial year for the projects. However, the finance ministry has granted only Rs 2,520 crore, which is Rs 1,206 crore less than the actual requirement.’

On Bangladesh, he said, ‘The external affairs ministry has repeatedly asked for an additional amount of Rs 19,228.64 crore. Unfortunately, the finance ministry has sanctioned only Rs 11,719 crore. We have also failed to release second installment of the grant to Bangladesh as announced during the bilateral visit of former finance minister and current president Pranab Mukherjee in May 2012.’

Recently, union rural development minister Jairam Ramesh has also expressed annoyance with finance ministry for not releasing funds, which has hampered several domestic projects.
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