India continues to assist Sri Lanka in its economic development

In today’s world, winning hearts matter more than winning over territories by toppling governments. Relations between governments tend to go haywire but people-to-people contacts do not. At the end of the day, common people only care about the aspect of human development. That is why when a country contributes to global welfare; its legitimacy reaches the last mile of human population. This is exactly what is happening to India.

LOCs to Sri Lanka

Our Foreign Minister S. Jaishankar has revealed that India has extended lines of credit worth more than $1.85 billion to Sri Lanka in last decade. Understanding Line of Credit is important here. A line of credit (LOC) is a preset borrowing limit that can be tapped into at any time.

In other words, Sri Lanka can use as much amount it needs from this humongous sum and pay interest only for that particular amount which it has spent. This is in stark contrast to China’s debt-trap, under which CCP browbeats nations to repay the loans.

Also read: With Ranil Wickremesinghe at the helm of affairs, Sri Lanka finally comes under India’s fold

India provided LOCs to boost railways, infrastructure, defence, renewable energy, petroleum and fertilisers in the island nation. Stating that India is committed to assist its neighbours in their developmental path, Jaishankar said, “Under its ‘Neighbourhood First’ policy, the Government is committed to developing friendly and mutually beneficial relations with all its neighbours. In line with this policy, India continues to assist Sri Lanka in its economic development as also support it in overcoming its economic challenges.”

India’s neighbourhood initiative

Sri Lanka is not the only neighbour to have benefitted from India’s economic might. According to government’s figure, India has provided 37 LOCs to 5 of its neighbouring countries, which include Sri Lanka as well. Bangladesh, Maldives, Myanmar and Nepal are other neighbours to have benefitted from India’s gratuitous attitude. A total of 162 projects are being run in the 5 countries with India’s money.

Also read: China is not the only culprit behind Sri Lanka’s fall

Initial hurdles in providing developmental assistance

However, assistance to neighbours is only a tip of the iceberg. India’s line of credit, government aid and capacity building program has been a talk of the town in countries outside Indian Ocean periphery as well. Recently, Modi government released a report called “75 Years of Development Partnership Saga of Commitment to Plurality, Diversity and Collective Progress”. The report details how India has contributed positively towards human development all around the globe.

After independence, thrust on socialism had forced India to be the net receiver of developmental aids. But, things changed after 1991 LPG reforms. 13 years after LPG reforms, Tsunami struck the Indian shores and for the very first time, India realised that it can help itself. After that, India started providing more assistance to the world. But, things went slow for next 10 years under the UPA. One of the reasons being that its multiple freebie programs, due to various political compulsions, did not allow much leeway.

Also read: We are neither confirming nor denying the role of India in the purification of Sri Lanka

Vasudhaiv Kutumbakam

As soon as a nationalistic government with clear majority came into power in 2014, India started to punch according to its weight. Its developmental assistance to its neighbours increased four-fold in eight years. Even countries like China, Russia among others also gained from India. India has poked a deep hole in Africa section of China’s dying BRI as well.

Currently, 357 projects in 42 countries of Africa are funded by 222 LOCs provided by India. The total of the LOCs provided amount to $14.07 billion. Up until now, India has provided grants over $107 billion to the whole world. Nearly 30 per cent of them are in the form of government grants, which simply means India earned goodwill through humanitarian gesture.

All these initiatives are strengthening India’s status as a moral force of the world. This is primary the reason why India’s initiative to internationalise its Rupee did not invite ire from the western countries. It is an apt time for India to start issuing these grants in Rupees now. It will be a win-win situation for both the receiver and India.