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India to tell London to stop aid next April

India’s external affairs ministry has instructed the finance ministry to inform London that India will not accept further aid from the Department for International Development from next April. DFID is a UK government agency that manages Britain’s aid to poor countries to help alleviate poverty

India is considering rejecting any aid offers in future from the United Kingdom’s Department for International Development (DFID) -- which accounts for over 80% of all bilateral aid to India -- in view of the recent “negative publicity of Indian poverty promoted by DFID”.

Last week, India’s Foreign Secretary Nirupama Rao told her counterpart in the finance ministry that “internal discussions” within UK’s DFID were “to limit the aid further and channelise it to specific projects of their choice in certain states instead of routing it through the central government”.

“Rather than wait for such a situation to develop… it would be better if our decision not to avail of any further DFID assistance with effect from April 1, 2011, could be conveyed to the British side in an appropriate manner at the earliest,” she wrote to Finance Secretary Ashok Chawla.

The UK government began reviewing its aid programmes under DFID after a recent poll found more than half of Britons think development aid is wasted and do not support its government’s policy of ring-fencing assistance for poor countries. The poll conducted by the Institute of Development Studies at Sussex University showed limited public support for international aid in the midst of an economic downturn in the UK.

Last week, DFID told West Bengal that its financial support for all state projects will stop in March. Beyond this, the state may still benefit from other British resources, said a spokesperson for the agency. The agency will continue to provide financial assistance to Bihar, Madhya Pradesh and Orissa. In Andhra Pradesh, most of DFID’s programmes aimed at reducing poverty have ended; the last programme there ends next year, the spokesperson said.

DFID officials said the public sector enterprises and health department projects in West Bengal have fallen behind schedule because the state government “doesn’t seem to have the political will to implement them”. The agency provides grants to various departments of West Bengal, including urban development, health, public enterprises and power, to help build civic infrastructure and revamp state government-owned companies.

A number of these programmes will not be completed by March. An official in the state’s health department, which received at least Rs 800 crore from DFID, said the state government would take at least another year to complete ongoing projects.

News of the UK government’s decision to review aid to India along with some 90 countries came in July. No announcement on reducing or continuing aid to India is expected during the forthcoming visit of British Prime Minister David Cameron, but DFID said it had already decided to phase out aid to Russia and China.

The bilateral aid review will analyse DFID’s programme in each country to look at results, delivery and value for money. The review, which will report after the comprehensive spending review in the autumn, is expected to herald a new focus for DFID’s bilateral programme.

The redirected money will be channelled to priority countries and used for poverty-reduction measures including programmes to improve maternal health, women’s right to family planning and protection against deadly diseases like malaria, DFID said.

The demand to cut British aid to an India that is growing exponentially in economic terms had come from a wide spectrum of people and political parties in Britain after the government announced public sector spending cuts of between 25% and 40% in the next five years.

Source: The Indian Express, September 15, 2010
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