Despite GoI Expenditure Going Up, MEA’s Budget Goes Down by 5% for 2022-23

The budget figures also starkly demonstrated the adverse impact of the coronavirus pandemic, which began in early 2020, on MEA’s spending.

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New Delhi: For 2022-23, India’s budget for diplomacy has gone down sharply despite the overall allocation for government expenditure showing an upward trend.

Last year, the Ministry of External Affairs (MEA) had proudly noted that the ministry had got the highest ever allocation – Rs 18,154.73 crore. As per the latest budget documents, this got revised to Rs 16,000 crore for 2021-22 – a drop of 11.8%.

Not only that, there has been a sharp decrease of 5% in expenditure allocation for the new financial year of 2022-23 at Rs 17,250 crore.

The budget figures also starkly demonstrated the adverse impact of the coronavirus pandemic, which began in early 2020, on MEA’s spending.

In the 2022 Union budget, the latest figures for actual expenditure is for the year 2020-21, the first financial year when the COVID-19 pandemic shut down national borders and the global economy.

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Compared to the previous year, there was a sharp drop of 16.9% in actual expenditure by the MEA in 2020-21. This was the first time there had been a decrease in actual spending by the foreign ministry year-on-year since 2016-17, when the decline had been 12.1%.

The MEA’s drop in actual expenditure for 2020-21 is not surprising and part of the overall trend for government spending. However, the decrease in MEA’s budget allocation for 2022-23 is going against the grain, since the overall expenditure for the government of India has gone up.

As the chart above shows, the MEA’s share in the government’s overall spending has also decreased sharply in the last two years.

In its reports tabled in December 2021, the parliamentary standing committee had observed that MEA’s proportion as a percentage of the GOI budget was a mere 0.5 in 2021-22, despite the ministry highlighting that it was the highest ever allocation. “While the increased allocation to MEA in absolute term is a fine development, however, it is continuously slipping down as a percentage of the GOI’s total expenditure,” the report said.

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With ministry officials deposing that the allocated budget is adequate, the standing committee report observed that MEA has “accepted budgetary constraint as a given reality”.

Nevertheless, the committee observed that it “strongly” felt that MEA’s allocation was “incommensurate and inadequate”. “Budgetary resources will play a determining role in India’s pursuit of permanent seat at United Nations Security Council (UNSC) that require adequate global presence and expansion of diplomatic outreach. Provisioning of adequate finances is critical to ensure that India’s global footprint and diplomatic outreach is not circumscribed.”