The Maldives has seen the biggest increase in allocation of funds among all the countries in India’s immediate neighbourhood in the interim budget presented on Thursday, despite the “Boycott Maldives” call from the ruling ecosystem last month.

An amount of Rs 600 crore has been set aside in the budget estimates (BE) for Maldives under Aid to Countries. This is a bump up from the Rs 400 crore for the Maldives in the 2023-24 budget estimates though the revised estimates (RE) for the ongoing fiscal
had increased it to Rs 770.90 crore.

What is particularly notable — considering how the bilateral relationship has soured in the past month — is that the allocation for the Maldives has gone up when the overall allocation for aid to countries has come down from Rs 5,408.37 crore in the
last budget estimates to Rs 4,883.56 crore in the interim budget.

Bilateral relations have taken a hit ever since Mohamed Muizzu assumed
office in Male after winning the presidential elections in the archipelago on an “India Out” campaign against the “India First” policies of his predecessor Ibrahim Solih. Matters came to a head last month when a visit by Prime Minister Narendra Modi to Lakshadweep was projected by his supporters as an answer to the Maldives in the field of island tourism.

Three of Muizzu’s ministers posted offensive tweets against Modi that led to their suspension. Muizzu then proceeded to make a case for China to regain its top spot in tourist arrivals in the Maldives — something that the Chinese appear to be obliging according to the data on the Maldivian Tourism website — and set a deadline for India to withdraw troops from the atoll nation. Also, he has decided to stop using the aircraft provided by India for medical evacuations.

Officially, the Modi government — mindful of strategic interests — has been cautious in its response; maintaining that the mechanisms for addressing these issues are operational.

Nepal is the only other country in the region to get an increase in allocation from Rs 550 crore to Rs 700 crore. Again, this is below the RE figure of Rs 650 crore.

Finance minister Nirmala Sitharaman emphasised on Lakshadweep while mentioning domestic tourism projects in her interim budget speech — in an apparent
shout out to the ecosystem which is keen on pitting these islands against the Maldives which has developed many of its uninhabited atolls exclusively for luxury tourism.