Holding back on soft power
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While India's development assistance has increased markedly since 2000, it remains moderate in relation to the country's size and growing stature
The newly released budget has not only protected but has actually increased India's foreign assistance, or development partnerships as the government prefers to call it. It has done so despite fiscal pressures to decrease spending, as well as pre-election year pressures to increase funding only for programmes that will gain votes.
Given India's growing global stature and its international strategic interests, India needs to ensure that its development assistance is harnessed to its full potential. Protecting the ministry of external affairs' budget, and that of development assistance in particular, will help to further cement several changes India has undertaken over the past decade to strengthen its relationships with other developing countries.
India is not an "emerging donor", having started development assistance to neighbouring Bhutan only a couple of years after Independence, at a time when India was itself struggling to deal with its massive poverty and other social issues, as well as the horrors of Partition. With the addition of the Indian Technical and Economic Cooperation (ITEC) programme in the 1960s, India's development assistance focused on training and capacity building in partner countries and was able to leverage an entire generation of Indian-trained civil servants from numerous countries into friendly bilateral relations, as well as support for India's views in multilateral fora. For example, nearly 700 Ethiopians, largely civil servants (but including the current prime minister), have received training to date under the ITEC programme. The Ethiopian government has repeatedly stated that India is among its preferred partners and it supports India's bid for a seat on the UN Security Council.
While India's development assistance has increased markedly since 2000, it remains moderate in relation to the country's size and growing stature. Between 2003-04 and the new 2013-14 budget, India's development assistance increased fourfold, from Rs 1,749 crore to Rs 7,019 crore annually. Much of this increase in development funding went to Afghanistan where India, with a total commitment of around Rs 11,000 crore, is the fifth-largest bilateral donor. India has also provided increased assistance to other neighbouring countries, such as Bhutan and Myanmar, and has given some grants to several African countries. Over the past two years, development assistance as a percentage of total government expenditures has grown from 0.27 per cent to 0.42 per cent. Yet, this soft power tool of foreign policy is still below half a per cent of the budget, and is dwarfed when compared to spending on hard power, as defence accounts for over 12 per cent of the estimated government spending in this year.
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