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UK may slash aid to India

Jul 13, 2010

Britain is reviewing its development assistance to India following shocking allegations of misuse of British educational grants by Indian authorities. Moreover, the fact that India undertakes huge defence expenditure and is an emerging economic giant are reasons enough for a recession hit Britain to cut down its developmental aid.

Britain is to evaluate its £250 million annual development assistance to India amid a growing sense in Whitehall and among independent experts that a country which spends millions on its nuclear programme and is seen as an emerging economic giant does not need foreign aid any more.

India is the single largest recipient of British overseas aid, mostly tied to specific projects, and in recent months ministers have struggled to justify this at a time when Britain itself is facing sweeping cuts in public spending following its worst post-War economic crisis.

The Secretary of State for International Development Andrew Mitchell on Sunday indicated that the aid package to India could be reduced as part of an overall review of British assistance to fast developing major economies. Funding to China and Russia is reported to have been already withdrawn.

“India is more complex and more difficult than China. But this is a programme I am looking at in detail,’’ Mitchell told The Sunday Times.

Recently, his Conservative Party colleague and The Financial Times’ former South Asia bureau chief Jo Johnson called for Britain to stop funding India saying that it was “no longer a natural aid recipient”.

“India can now fund its own development needs…. It has a defence budget of $ 31.5 billion, plans for a prestige-boosting moon-shot and a substantial foreign aid programme of its own,’’ he wrote adding that “a bit of tough love in the new special relationship should end this anachronism”.

The pressure to review funding to India has grown following allegations of misuse of millions of pounds of British educational grant by Indian authorities. Mitchell described them as “shocking allegations’’ and promised an investigation.

Officially, the line until now is that despite progress India still needs assistance to deal with the “scale of its needs’’. The entry on India on the Department for International Development’s website features a photo of a “family group in a slum” in Patna and notes: “The country has accomplished a great deal since independence in 1947, making slow but steady progress. However, despite its strong economic growth, the scale of its need is huge. Today 456 million Indians — 42% of the population — live in poverty, comprising one-third of the world's poor.”

Recently, in an article in The Hindu, Mitchell wrote that Britain would continue to support “the millions of Indians who are battling against poverty and disease’’.

“Our message is this: the people and Government of Britain are on your side, and we will use every tool in our policy armoury — aid, trade, climate policy, diplomacy, business investment, and more — to champion fairness and prosperity for you,’’ he wrote pointing out that a “fifth of global child and maternal deaths, and cases of TB occur in India’’ while over 40% of children in India were underweight and a child died every 15 minutes from easily-preventable diseases.

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