UK to end financial aid to India by 2015

 

International Development Secretary, Justine Greening: "India is very successfully developing as an economy"

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The UK is to end financial aid to India by 2015, international development secretary Justine Greening has said.

Support worth about £200m ($319m) will be phased out between now and 2015 and the UK's focus will then shift to offering technical assistance.

Ms Greening said the move, which will be popular with Tory MPs, reflected India's economic progress and status.

Giving his reaction, India's foreign minister Salman Khurshid said: "Aid is the past and trade is the future."

But charities described the move as "premature" and warned it would be the poorest who suffered.

Until last year, when it was overtaken by Ethiopia, India was the biggest recipient of bilateral aid from the UK, receiving an average of £227m a year in direct financial support over the past three years.

But the UK's support for India, one of the world's fastest-growing economies, has been a cause of concern among Conservative MPs, many of whom believed that the UK should not be giving money to a country which has a multi-million pound space programme.

Ministers have defended the level of financial help in the past on the basis of the extreme poverty that remains in rural areas and historical colonial ties between the two countries.

Ms Greening has been conducting a review of all financial aid budgets since taking over the role in September and visited India earlier in the week to discuss existing arrangements.

'Changing place'

She said the visit confirmed the "tremendous progress" that India was making and reinforced her view that the basis of the UK's support needed to shift from direct aid to technical assistance in future.

Analysis

The announcement that the UK is scrapping aid to India has been long expected and will not have come as a surprise to the Indian government.

UK International Development Secretary Justine Greening was in India early this week to meet senior Indian government officials who were briefed on the move.

India has long held the position that while it welcomes financial aid from overseas from those who choose to give it, it will never actively seek it.

The move is also a recognition of India's economic transformation.

It's now the third largest investor in the UK and the largest market for British goods outside the EU.

But much of the UK aid money was used to fund projects in some of India's poorest areas and some will worry that those at the receiving end could suffer.

"After reviewing the programme and holding discussions with the government of India, we agreed that now is the time to move to a relationship focusing on skillsharing rather than aid," she said.

"India is successfully developing and our own bilateral relationship has to keep up with 21st Century India.

"It is time to recognise India's changing place in the world."

Although all existing financial grants will be honoured, the UK will not sign off any new programmes from now on.

Last year the UK gave India about £250m in bilateral aid as well as £29m in technical co-operation.

By focusing post-2015 support on trade, skills and assisting private sector anti-poverty projects which can generate a return on investment, the UK estimates its overall contribution will be one-tenth of the current figure.

In making the decision, the UK is citing the progress India has made in tackling poverty in recent years. It says 60 million people have been lifted out of poverty as a result of the doubling of spending on health and education since 2006.

India spends £70bn on its social welfare budget, compared with £2.2bn on defence and £780m on space exploration.

'Premature'

From 2015, development experts will continue to work alongside the Foreign Office and UK Trade and Investment but focus on sharing advice on poverty reduction, private sector projects and global partnerships in food security, climate change and disease prevention.

Emma Seery, Oxfam: "A third of the world's poorest people live there [in India]"

Save the Children said it believed the decision to end financial aid was "premature".

"Despite India's impressive economic progress, 1.6 million children died in India last year - a quarter of all global child deaths," Kitty Arie, its director of advocacy, said.

"We agree that in the longer term, aid to India should be phased out as the country continues to develop, but we believe that the poorest children will need our ongoing help."

After 2015, the UK should also support Indian non-government organisations to tackle child mortality and improve health provision, it urged.

'Hitting the vulnerable'

Labour MP Keith Vaz, a former chair of the Indian-British parliamentary group, said the government needed to reassure its Indian counterpart that their bilateral relationship was still a priority.

"Although undoubtedly India has progressed in the past 20 years, there are still an estimated 360 million people surviving on less than 35 pence per day," he said.

"In withdrawing our aid to India, which will clearly only affect the most vulnerable, we need to see the minister's plan for how she will work with other organisations to make sure the gaps we are creating will be filled."

War on Want, which campaigns to end global poverty, said aid should not just stop because India had become a middle-income country.

Financial support needed to be "smarter" and geared towards supporting "progressive movements" capable of bringing about political change and tackling growing inequality, the pressure group said.

The UK government is increasing the overall overseas development budget to meet a longstanding international commitment to spend 0.7% of national income on aid.

At the same time, it wants to re-align its expenditure to focus on the poorest countries and those scarred by recent conflict.

Bar chart showing top five recipients of UK bilateral aid for the past three years
 

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  • Comment number 749.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 748.

    738.Underclass Underdog
    If you care to check the comment I referenced you will see it applies to Ethiopia, not India. However, the principle is correct. I don't see anything I said condemning the British, it's not that long ago families in this country did exactly the same - my grandmother was the oldest of 13 children. The welfare state (and better education) changed that.

  • rate this
    +5

    Comment number 747.

    Great - now can we pull the plug on all phone lines from India - I've already had two unwanted phone calls from call centres there this morning - it's driving me MAD!!!

  • rate this
    +4

    Comment number 746.

    At last.

  • rate this
    0

    Comment number 745.

    Underclass Underdog

    your ignorance of the situation in India is overwhelming, save, scroungers, LOL ok you obviously don't have a clue.

    stop commenting on things you have no knowledge of.

  • rate this
    +4

    Comment number 744.

    For those who believe that we should continue giving aid to India clearly don't see what is going on:
    A country that receives over £200m a year from us has built a space station, there are very wealthy people in that country (politicians) yet they still have a ridiculously high infant mortality rate and extreme poverty - our aid is being taken by the wrong people. This is India's problem now.

  • rate this
    -6

    Comment number 743.

    772 - yup was right about you being a racist. Just took 2 minutes. You sure you are not John Terry?

    730 - Mike - ha ha hand feeding you. Here is from the article above - India spends £70bn on its social welfare budget, compared with £2.2bn on defence and £780m on space exploration. Yup the 250 million is a huge feeder to the overall progam. What an idiot

  • rate this
    +3

    Comment number 742.

    725.
    Grumpy Young Woman


    " People have short memories (or rather don't know their history) about the British empire-we did rather well out of Indian"

    Oooh I know. We had just the same trouble with those Romans,. had their way then legged it .Then there were vikings and normans(still here a lot of em) . Must be why we are in such a mess now

  • rate this
    +5

    Comment number 741.

    If India can afford a space programme then it doesn't need our aid. Maybe their government needs to have a look at making sure their own citizens are looked after first before they spend anything on weapons and space programmes.

  • rate this
    +1

    Comment number 740.

    how much of the aid from britain does the indian goverment spend on its nuclear weapons? it seems ridiculous to give aid to a country who spends so much on defence

  • rate this
    +2

    Comment number 739.

    India is only one of a number of countries that we should stop giving aid to. Many of these counties have a ruling and middle class that is quite able to look after the poorer of their countrymen without the need of support from outside. The problem is that as long as the aid keeps coming there is no incentive for them to do it themselves. The rich then get richer and the poor get poorer.

  • Comment number 738.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +5

    Comment number 737.

    The only reason we give aid is to buy influence and business, not to help the poor. India and Indians are very fond of playing the anti-colonial card while singing about their economic status in relation to Britain. Time to stand on their own two feet.

  • rate this
    +4

    Comment number 736.

    About time - who are we trying to kid, handing out alms to up and coming superpowers. At last, some common sense has been applied to UK government's foreign policy. .

  • rate this
    +3

    Comment number 735.

    "Ministers have defended the level of financial help in the past on the basis of the extreme poverty that remains in rural areas and historic colonial ties between the two countries."

    That is not the UK's problem when for decades, India has had its own space programme. That is up to India to get its humanitarian priorities straight.

  • rate this
    +2

    Comment number 734.

    Poverty is relative not absolute. Measuring foreign wealth by your own countries standards is unrealistic.

    If everyone started with £100, you can guarentee that after a day some would have nothing left and others would have more than they started with.

  • rate this
    +7

    Comment number 733.

    Stop the aid now, not in 2015. India has a space program, nuclear weapons etc etc. It can and should look after its own people, not rely on aid from other countries and spend its money on space and weapons.

  • rate this
    +2

    Comment number 732.

    We give aid but leave it up to the recipients how to spend it.

    If any other country (USA, Germany, France etc) gives aid it ensures it has to be spent using their know how and their skills.

    I have no problem with giving aid to India to spend on space exploration if it means they have to use British scientists and engineers......

    When will we learn?

  • rate this
    +10

    Comment number 731.

    About time. Pakistan, a nuclear power, should be next.

  • Comment number 730.

    This comment was removed because the moderators found it broke the house rules. Explain.

 

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