Budget 2024: Govt allocates Rs 600 crore as grant to Maldives for FY25

Budget 2024: India has allocated Rs 600 crore as grant to the Maldives in FY25 (BE). This is 28.33% lower than RE for FY24, but 50% higher than the Rs 400 allocated in BE for FY24

Amid an ongoing diplomatic row with the Maldives, the Narendra Modi government on Thursday announced a grant of Rs 600 crore to the island nation in the Interim Budget for FY25. This was 28.33 per cent lower than the revised estimates for FY24, but 50 per cent higher than the Rs 400 crore allocated in the BE for FY24.

Finance Minister Nirmala Sitharaman announced this while presenting the Interim Budget in Parliament earlier in the day.

India had almost doubled its grant to the Maldives to Rs 770 crore in the revised estimates (RE) for the financial year 2023-24 (FY24), according to the Budget data released on Thursday. For FY24, the Budget estimate (BE) was Rs 400 crore.

India-Maldives diplomatic row

The development comes nearly a month after India-Maldives got entangled in an ugly diplomatic spat over the remarks made by three ministers of the island nation against India and PM Modi.

It is to be recalled that in the first week of January, PM Modi had shared photos from his Lakshadweep visit, and urged the citizens to make efforts to boost domestic tourism, including exploring the hidden gems such as the Lakshadweep islands.

As Modi's post on social media platform 'X' went viral, three Maldives ministers made objectionable comments while comparing the tourism potential of the two nations. A massive row was triggered on the issue, calling for a "boycott" of the island nations on social media. 

The countrywide resolve had even reached many celebrities, including Sachin Tendulkar and Akshay Kumar, who endorsed domestic travel over international ones.

Maldives had suspended ministers

As the row gained momentum, the Maldives government suspended the ministers for their conduct.

However, the Centre demanded that the ministers be dismissed, just not suspended. The Maldivian high commissioner, Ibrahim Shaheeb, was summoned to the external affairs ministry on January 8 and was conveyed that the onus is on President Mohamed Muizzu to repair the bilateral ties.

Notably, about 200,000 Indians travelled to Maldives in 2023. However, since the row, the influx of Indian tourists to the island nation has seen a decline. From being the top tourist group visiting the Maldives according to its December 2023 data, India slipped to the fifth spot as per the recent data released by the Maldives Ministry of Tourism.