India has increased its annual grant for Nepal.

The Indian government, through its union budget for the fiscal year 2024-25, has allocated an Rs11.2 billion grant to Nepal.

Indian Finance Minister Nirmala Sitharaman presented the budget in Parliament on Tuesday, increasing the grant for Nepal by Rs2.4 billion.

India had allocated Rs8.8 billion to Nepal in 2023-24. In 2022-23, the southern neighbour pledged Rs12 billion in grants but was revised down to Rs6.8 billion. In 2021-22, India provided Rs7.13 billion in grants to Nepal.

The grant pledged to Nepal is the second highest among the South Asian countries, after Bhutan. Bhutan has received pledges of Rs20.6 billion.

Sri Lanka has also witnessed an increase in its allocation, with Rs3.84 billion earmarked for the next fiscal year. Afghanistan and the Maldives have not seen any changes in their allocations, remaining at Rs2.3 billion and Rs6.4 billion, respectively.

India struck a balance between greater spending on jobs and rural development while narrowing the fiscal deficit in its 2024-25 budget unveiled on Tuesday, after last month's election setback for the government, Reuters reported.

Analysts blamed distress in rural areas and a weak job market for a poor poll showing that cost Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) its absolute majority, making it dependent on allies to form a government.

Finance Minister Nirmala Sitharaman said the government will spend $24 billion on job-spurring efforts over the next five years and $32 billion on rural development this year alone, while presenting the budget to parliament.