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As world cuts aid to India, UK pledges 252 mn pounds more

As world cuts aid to India, UK pledges 252 mn pounds more
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First Published: Thu, Jun 14 2007. 01 33 AM IST
Updated: Thu, Jun 14 2007. 01 33 AM IST
New Delhi: Even as many countries scale back aid to an increasingly prosperous India, the British government’s development arm said on Wednesday that it will give 252 million pounds (Rs2,041 crore) in additional aid over the next eight years.
“Our TV screens and newspapers are awash with India’s successes: India is booming, shining, emerging, flourishing,” said UK development minister Gareth Thomas in a speech to be given in London. “But let’s not forget that India is also home to 300 million poor people.”
Thomas talked about the UK engaging “Three Indias”: the modern India, developing India and poorest India.
“India’s disparities are startling,” he said. “We can be the generation to say we...made poverty history in India.”
Britain’s department for international development (DFID) has earmarked the additional aid to fund the development and implementation of new health initiatives, targeting India’s poorest and most excluded groups. The new funds will mostly be aimed at cutting child mortality rates.
The announcement comes as many other countries are scaling back foreign aid and development funds to India, which is transforming from a recipient of aid into a donor nation.
India has provided foreign assistance to countries in South Asia, including Afghanistan, Africa and Latin America. In 2005, the Indian government decided to accept foreign aid only from G8 and European Union countries; other countries must commit a minimum of $25 million (Rs102.5 crore) in a given year, which resulted in many of them pulling back aid altogether.
DFID remains the largest bilateral aid programme in India. Over the past five years, it has provided about £1,045 million to India. In 2006-07, it gave 242 million pounds. That number is expected to rise to 290 million pounds by 2008-09.
Although India has experienced sustained economic growth, at a rate of 8% or higher since 2002, it remains home to one-third of the world’s poor.
“If we are going to deliver Millennium Development Goals, if we are going to make a difference in the world, we have to act in India,” said Fiona Lappin, the acting head of DFID India. The goals are a set of UN initiatives to reduce poverty by 2015.
DFID India will target the states of Orissa, Madhya Pradesh and Andhra Pradesh—and hopes to focus on Bihar in the future.
It will also make improvements to slums and provide medical assistance to pregnant women.
Following British government policy, the money will be distributed through the government to support the development of India’s own service delivery. “The consensus is, we need to build national systems by using them,” said Deborah McGurk, senior economist with DFID India.
The organization’s US counterpart, meanwhile, the US Association for International Development (USAID), plans to cut back aid to India, with a budget of $106 million for this year, down from $123 million in 2006 and nearly $130 million five years ago.
In a prepared statement, USAID said its “engagement with India remains strong. ...Re-evaluating the level of assistance is consistent with the progress and the success of certain development programmes”.
In 2006, Canada phased out bilateral assistance to India, but still remains engaged through various programmes, including tsunami relief, said Solveig Schuster, the head of aid at the embassy here.
Germany’s total commitment for bilateral development in 2006 was 154 million Euros (Rs831.6 crore). According to a spokesperson, the amount of money had remained steady over the last five years, but the nature of financial assistance is changing, with more emphasis on technical and financial cooperation, such as low-interest loans and grants.
The Australian high commission has given $6.3 million this year; “development cooperation programme to India has been phased down”, according to the website.
A spokesperson said Australia is working within the United Nations programmes to make a difference, such as one to curb the spread of AIDS/HIV in the Northeast. Those with suggestions on how the UK aid to India should be spent were asked to send ideas to indiacap@dfid.gov.uk.
Alison Granito contributed to this story.
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First Published: Thu, Jun 14 2007. 01 33 AM IST