Sydney: The Australian budget for the year 2004-05 has allocated an estimated AUD 86.4 million for South Asian countries as Official Development Assistance (ODA), out of which 20 per cent has been assigned to India, to promote good governance and improve basic service delivery at the State and community level in the region.

During this financial year the estimated total aid to India will be AUD 17.2 million as against AUD 22.6 million in 2003-2004.

Australia's development cooperation programme with India is being phased down following the Indian Government's decision to reduce its engagement with smaller bilateral donors, Foreign Minister Alexander Downer said in a statement.

Major activities already agreed by Australia and India for implementation in HIV/AIDS, water supply and sanitation, will go forward on a modified basis.

Bangladesh will receive 33 per cent, Sri Lanka 27 per cent, Nepal 7 per cent and Pakistan 6 per cent of the total estimated ODA, the budget announced last night (May 11, 2004) said.

In addition, Australia's development cooperation programme will provide scholarships to a range of South Asian countries, including the Maldives and Bhutan, in priority areas such as governance, health and education.

Australia will increasingly work with major multilateral partners to address the major challenges facing the region, including HIV/AIDS, conflict and lack of food security, the statement said.