2022 GS2 Answer

Q. India is an age-old friend of Sri Lanka.’ Discuss India’s role in the recent crisis in Sri Lanka in the light of the preceding statement.

Question from UPSC Mains 2022 GS2 Paper

Model Answer: 

Sri Lanka Crisis and India’s Support

Reasons Behind the Sri Lankan Crisis

Easter Bomb Blasts, 2019 have impacted the tourism industry in Sri Lanka, which has lead to decline in forex reserves.
The new Government in 2019 promised lower tax rates.
Covid-19 Pandemic has impacted the exports of tea, rubber, spices and garments.
High Government expenditure led to fiscal deficit more than 10% in 2020-21.
In 2021, overnight shift to organic farming impacted food production.

India’s Support to Sri Lanka in the Recent Crisis

Food, health and energy security package as well as foreign reserves support amounting to more than USD 3.5 billion.
A concessional loan of US$ 1 billion.
A Line of Credit (LOC) of USD 500 million for financing purchase of petroleum product such as diesel, petrol and aviation fuel.
A consignment of 40,000 MT of fuel supplied by Indian Oil Corporation outside the LOC facility.
A currency swap facility of USD 400 million under the SAARC Currency Swap Framework 2019-22.
A large consignment of drugs and medical supplies was gifted to various hospitals in Sri Lanka.
A dollar credit line amounting to USD 55 million for the procurement of 65000 MT Urea fertiliser from India for the Yala season cultivation.

The Sri Lankan crisis is not just a domestic problem, but it has a spill-over effect on other South Asian countries also. India’s assistance to Sri Lanka is in line with its policy of neighborhood first and vision for Security and Growth for All (SAGAR). These twin principles underline India’s emphasis on emerging as a first respondent to meet the requirements of neighboring countries in the region.

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