India’s Aid to Nepal Dwindles, China Now Among Major Donors

India’s donation to Nepal has reduced by 50 percent. (Photo: iStockphoto)

India’s aid to Nepal has dwindled by over 50 percent in the last five years to $22 million while China’s assistance to the land-locked nation doubled, a Nepalese Finance Ministry report says, amid Nepal’s deepening ties with the Communist giant.

Chinese aid of $37.94 million was disbursed in the 12-month period in 2014-2015 which made it the fourth largest bilateral donor to Nepal behind the UK, the US and Japan, according to Nepal’s Development Cooperation Report 2014-15.

Switzerland was the fifth largest donor.

Financial Year Report: India to Nepal

2010-2011
$50,728,502

2011-2012
$50,620,749

2012-2013
$63,813,269

2013-2014
$47,796,349

2014-2015
$22,227,306

China to Nepal

2010-2011
$18,843,988

2011-2012
$28,344,923

2012-2013
$34,120,033

2013-2014
$41,381,522

2014-2015
$37,948,75

The volume of aid disbursement in FY 2014-15 reached a total of $1.13 billion of which Overall Official Development Assistance (ODA) contribution was $1020.75 million (90 percent) and INGO contribution was $116.89 million (10 percent).

Despite the devastating earthquake in April 2015, the level of ODA disbursement stood at almost the similar level as compared to the previous fiscal year ($1.03 billion in FY 2013-14), the report said.

Of the total disbursement of ODA, about 45 percent was provided by multilateral donors, while nearly 55 percent came from bilateral donors, it said.

The top five bilateral development partners for the FY 2014-15 were the UK ($168.07 million), USAID ($132.37 million), Japan ($39.87 million), China ($37.95 million) and Switzerland ($32.47 million).

The top 5 bilateral development partners contributed approximately 40 percent of the total ODA disbursements.

The report noted that the trend of ODA shows disbursed over the last 5 years from top development partners indicates that the disbursement from the World Bank Group, ADB, India, Japan and EU has declined, the Finance Ministry report said.

Nepal has been receiving development assistances for more than six decades and aid continues to play an important role in the socio-economic development of the country, it added.

ODA represents in average about 20 percent of the national budget over the last 5 years. The estimated GDP for FY 2014-15 was $21.2 billion whereas the total government expenditure was estimated to be about $6.2 billion which is about 29.1 percent of GDP.