UK & World News

  • 9 November 2012, 16:35

Britain To End Financial Aid To India In 2015

Britain's controversial 280m-a-year aid programme for India will end in 2015, the Government has announced.

The UK will reduce its support to the fast-developing country over the next three years, saving around 200m ahead of the cut-off.

International Development Secretary Justine Greening said programmes already under way would go ahead but nothing new would be approved.

Future British support for India will be limited to skills-sharing in areas like trade, investment and health and will be worth around 30m-a-year.

The move follows criticism that the Government is imposing drastic austerity measures at home while handing out a fortune in aid to rich, developing nations.

India has become a focus of the anger because it has its own space programme and a booming economy that is growing at 8% a year.

Indian finance minister Pranab Mukherjee said last year that the country no longer wanted or needed the grant, describing it as "a peanut in our total development expenditure".

The decision will also delight Tory MPs who have attacked Prime Minister David Cameron's commitment to spend 0.7% of national income on overseas aid.

Ms Greening said: "After reviewing the programme and holding discussions with the government of India this week, we agreed that now is the time to move to a relationship focusing on skills-sharing rather than aid.

"India is successfully developing and our own bilateral relationship has to keep up with 21st century India. It's time to recognise India's changing place in the world.

"It is of course critical that we fulfil all the commitments we have already made and that we continue with those short-term projects already under way which are an important part of the UK and government of India's development programme."

British support beyond 2015 will involve a hub of British development experts working with the Delhi government, and a programme of private sector investment.

Charities cautioned that the move may be "too hasty" because of the immense poverty still seen in the country.

Oxfam's director of campaigns and policy, Phil Bloomer, said: "It's crucial that we don't cut off money which gives a lifeline to poor families, and a third of the world's poorest people live in India.

"Despite the fact India is a country of growing wealth, it is also a hugely divided country with extreme levels of poverty and inequality. The scale of the challenge remains huge."

Melanie Ward, head of advocacy at ActionAid, added: "India is an example of the changing face of global poverty and a fast-moving economic landscape, but the reality is that it is a country with more poor people than in the whole of sub-Saharan Africa.

"Aid which is carefully targeted at the poorest and most vulnerable people in India still has the potential to make an enormous difference to millions of lives."

Labour MP Keith Vaz also claimed the move would affect "the most vulnerable" and stressed the importance of the link to Delhi.

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

"We need to reassure the Indian government and its people that this relationship is a priority."

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