The Big Debate Over UK Aid to India

This week in the UK, the government has been questioned over its decision to maintain aid of £280 million a year to India. As the wealth of India continues to rapidly increase, a debate has risen in the UK over whether it is time to halt assistance to the country. Andrew Mitchell, international development secretary, has defended the decision saying, "India has more poor people in it than the whole of sub-Saharan Africa. If you're going to achieve the Millennium Development Goals, you have to make big progress in India."

Today, India has economic growth of 8.5% a year, gives aid to Africa, spends £20 billion a year on defence, has more than 126,000 US dollar millionaires and has a £1.25 billion space programme, as reported in the Financial Times. According to the UK commitment, India will receive £280 million a year until 2015, totaling at £1 billion from the UK.

Andrew Mitchell, international development secretary, has said that it is not yet time to withdraw aid from India, although he said that time will come. He described India as a "development paradox": although it is one of the richest countries in the world, is also the home to more than 300 million of the world's poorest people. The UK government's assistance to India will be delivered to three of the least developed states - Orissa, Madhya Pradesh and Bihar. Some aid programmes will however be halted next month when the UK Department for International Development (DfID) undergoes a policy review. Countries that will no longer receive UK assistance include Serbia, Cambodia, Moldova, Vietnam, Russia and China.

Having frozen the amount of aid going to India, in real terms this means aid to India is falling. Assistance to other nations is rising sharply - a 40% increase in aid to Afghanistan for example. In addition, some aid to India will be going to pro-poor private investment rather than through traditional development assistance.

The level of debate that has grown around the Indian aid issue in the UK is symptomatic of a nation that has just had £81 billion cut from every corner of society in the most severe austerity package of its modern times. However, DfID was the only government department to be spared from the knife, with the aid budget being increased to 0.7% of GDP. Commentary by readers on the Guardian's website shows much discontent around the £1 billion going to India, skepticism over whether £280 million will just be a small drop in the ocean, and distrust over where the money will actually end up.

In the Guardian, Lawrence Haddad from the Institute of Development Studies in the UK offers some counter arguments to the reasons for discontinuing aid to India:

-  India is not rich - even taking into account all the billionaires in India, its overall income per person is still one-third of China's. The state of Bihar, which is the size of Germany, has an annual per capita income of £200.
-  The £1.25 billion space budget should  improve India's ability to monitor agricultural performance and climate change and strengthen telecoms.
-  India may be ranked as 87 out of 178 on perceptions of corruption, but it is not far behind Brazil (69) and China (78) and way ahead of some other aid recipient countries.
-  The UK aid programme will help leverage and increase much larger Indian resource flows (public and private) towards the poorest.

People need to understand the reasons behind giving aid. On DfID's website there is a page "Why we give aid to the world's poorest people". We are not giving aid to a country, but to people in a country. Of course, aid successes never receive as much attention in the media as humanitarian disasters and consequently people may not fully appreciate how helping others in poorer countries is not only a moral imperative but in turn also helps society in the UK, and globally.