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Is it right for Britain to cut aid to India?

Despite some improvements, many Indian children still need us
Despite some improvements, many Indian children still need us

India’s economy has seen impressive growth in the last decade and classified as a ‘middle-income’ nation, the country is being dropped from the UK’s aid programme in 2015. But with one third of the world’s poorest people living in India, Laurinda Luffman asks if this is the right decision?

In recent years, the UK government has committed around £300 million annually to development programmes in India. After 2015, these sums will fall to just £30 million for ‘technical assistance’ projects. Justifying the decision to withdraw significant aid spending, the international development secretary, Justine Greening, said the UK’s partnership with India should “be about trade, not aid”. Greening further explained that the UK wanted to direct its aid budget at countries with “higher incidences [of poverty], less capability and generally bleaker prospects for the poor”.

Some Indian nationalists have welcomed the decision by the British government. The Indian economist, Jayati Gosh, admitted there is a “complete lack of development of the bottom 50%”, but believes “we have to solve these problems ourselves”. She also told the Guardian that “minute dribbles of UK aid cannot hope to work PR magic in India.” This comment alludes to the fact the the UK’s current annual aid budget represents less than 0.03% of India’s national income. It is also dwarfed by inflows of UK foreign direct investment and the billions in remittances sent back home by Indians working abroad.

A premature decision?

However, some aid agencies working in India have been dismayed, believing the government’s decision is premature. They point out that foreign investment tends to be concentrated in urban locations such as Bangalore, Mumbai and Delhi and remittances by British Indians go mostly to Punjab and Gujarat, rather than to poorest states. Some commentators accuse the UK government of making the decision to end aid to India (and also to South Africa) in order to placate those politicians who are unhappy about Britain’s foreign aid budget at a time of austerity.

A family in Kolkata / Calcutta TPA 66162
The gap between rich and poor continues to widen

But if the criteria for aid spending are supposed to be ‘high incidences’ of poverty and ‘bleak prospects for the poor’, then it’s hard to see why parts of India no longer qualify. Poverty levels in certain states, such as Orissa, Chhattisgarh and Madhya Pradesh, are higher than in many African countries, including Kenya and Ethiopia which remain countries of focus for UK aid.

The income gap between different regions in many other Indian states can also be stark, with around three-quarters of dwellers in some rural districts living below the international poverty line. The widening gap between the very richest and poorest is of course lamentable and the government of India should do all it can to prevent this. But the same kinds of gross inequality can be found in countries such as Angola and Nigeria, and no one is saying aid for the most needy in these places should end.

The poorest still need us

Speaking to the Guardian, a director at the Centre for Global Development said that in India’s poorest states and regions, any amounts of money from the UK, however small, can make a huge difference, ensuring for example that people have access to clean water and basic health services, infants are fully vaccinated and children can attend school. This is precisely why UK aid money has recently been spent on projects such as offering transport to women in remote areas of Madhya Pradesh to give birth in hospitals or providing clean water and sanitation to 300,000 village dwellers in Orissa.

As India’s economy continues to develop, there is no doubt that more and more Indians will be lifted out of poverty through trade and investment. But in those states and regions which have yet to benefit, the poorest Indian communities are likely to need our support for many more years to come.

SOS Children is helping. Across India, we provide a loving home for more than 5,000 children who would have no one else without us. With the need so great, we want to help many more children tomorrow. Read more about our work in India.