beyondbrics

Here the FT’s South Asia bureau chief discusses the UK’s aid policy in India. What do you think David Cameron’s government should do? Join the debate in the comments section.

Sixty years after granting independence to India, the UK is weighing whether India is a worthy recipient of its aid programme. Once the largest single recipient of British foreign aid, the country has developed so rapidly in recent years that some in prime minister David Cameron’s government think it could be time to cut off India and channel the money to poorer countries, mainly in Africa.

Others argue for a reshaping of the activities of the Department for International Development to encourage greater private sector responses. They would rather swap the aid label for more egalitarian ‘partnership’.

Britain’s ferocious budget squeeze has concentrated ministers’ minds. But there is more to it – a recognition of India’s rise, a wish to focus on countries where UK aid makes more difference, and where it can be deployed to counter the growth of pro-terrorist sympathies.

Even before Cameron was elected earlier this year, Conservative MPs came to New Delhi to question the suitability of UK aid for an emerging power that has the resources to launch space missions, nuclear submarines and its own $1.2bn aid programme to Afghanistan.

The Indian government, increasingly sensitive to aid recipient status, has expressed ambivalence towards UK assistance. Pranab Mukherjee, the finance minister, has inferred that India would like to maintain its dignity by declining assistance rather than have it simply chopped in Westminster.

Today, Andrew Mitchell, the UK’s secretary of state for International Development and a former banker at Lazard, meets Mukherjee to discuss the UK’s development participation in a region home to the world’s highest concentration of poor people.

But is it right to cross India, a country of 1.2bn people, off the aid list? The country is still clearly home to hundreds of million of the world’s poorest, where infant death and malnutrition are rife, where lives are blighted by poverty, disease, and illiteracy? Moreover, the UK’s expertise in global development is sharpened by its experiences among these communities, and development gives London a valuable added dimension to its ‘special relationship’ with New Delhi. Lessons learned fighting poverty in India can be employed to assist other countries.

According to the Oxford Poverty and Human Development Initiative, more people live in poverty in eight Indian states than in 26 of sub-Saharan Africa’s poorest countries. About 51 per cent of the world’s 1.7bn poor people are in south Asia.

While incomes are rising in India, human development indicators measuring health and nutrition are not to the same degree and remain some of the world’s worst.

When all is said and done, India has the world’s largest population of poor people. Is it right for it to go it alone?

Related reading:
India on beyondbrics
Singh to Cameron: try harder, FT beyondbrics
Interview with India’s central banker, FT beyondbrics

India trip was about more than arms, FT Westminster blog
If India doesn’t need aid, why do western governments still give to it?, Guardian