India second largest development aid giver to Sri Lanka

COLOMBO: India was the second largest development aid giver to Sri Lanka last year behind China, providing over $700 million to the island nation, according to latest official figures.

This was contained in the Ministry of Finance and Planning's External Resources Department's 2012 'Global Partnership Towards Development' report issued recently.

The Chinese commitment stood at $1.05 billion. "The total assistance extended by India during the last 5 year period was $1.45 billion of which $1.12 billion was loan assistance and $326 million was grant assistance," the report said.

The total assistance extended by China during the period between 1971 and 2012 was $5.05 billion of which $4.76 billion, representing around 94 per cent, was extended during the last 8-year period from 2005 to 2012, the report said.

Provision of grant assistance by India has substantially increased during the last few years mainly for social infrastructure development, emergency rehabilitation and reconstruction activities.

The Indian government committed grant assistance of around $260 million for construction of 49,000 housing units in 2012.

In addition, construction of 1,000 pilot houses with grant assistance of $10 million was completed this year.

Rehabilitation of Kankesanthurai harbor in the north at a cost of Rs 2.2 billion and construction of Dickoya hospital in the central hill districts at a cost of Rs 1.2 billion are some of the projects being implemented under Special Development Projects.

The annual foreign financing commitments from development partners and lending agencies have gradually increased at an annual average rate of 24 per cent from 2006 to 2010.

As most of the large scale infrastructure development projects were initiated during 2010, the foreign financing commitments slightly decreased to $2.07 billion in 2011 compared with the corresponding value of $3.28 billion in 2010 which have increased to $3.31 billion in 2012.

After Sri Lanka was classified as a country with middle income economy the availability of concessional foreign financing has gradually declined over the last few years.

The non-concessional and commercial financing has increased by 25 per cent from $855.8 million to $1.07 billion.

The total external debt obtained for development projects at end of September 2012 was $20.38 billion which has grown at an annual rate of 11 per cent over the last 10 years.

About 77 per cent of foreign debt represent concessional loans and the remaining 23 per cent from non-concessional loans including commercial loans.

The total external debt at end of September 2012 stood at $20.4 billion which was 31.9 per cent of the GDP.