UK to end Aid to India by 2015


11 November 2012 – Justine Greening, Britain’s International Development Secretary, has announced an end to the UK’s financial aid to India by 2015.  According to a report by the BBC, support worth about £200m ($319m) will be phased out between now and 2015 and the UK’s focus will shift to technical assistance. Ms Greening said the move reflects India’s economic progress and status.

India’s foreign minister Salman Khurshid said: “Aid is the past and trade is the future.”  Some charities, however, described the move as “premature” and warned it would be the poorest who would suffer.

Until last year, India was the biggest recipient of bilateral aid from the UK, receiving an average of £227m a year in direct financial support over the past three years.

Ms Greening (pictured at right) has been conducting a review of all financial aid budgets since taking over the role in September and recently visited India to discuss existing arrangements.  She said the visit confirmed the “tremendous progress” that India was making and reinforced her view that the basis of the UK’s support needed to shift from direct aid to technical assistance in future.

The announcement that the UK is scrapping aid to India has been long expected and will not have come as a surprise to the Indian government.  India has long held the position that while it welcomes financial aid from overseas from those who choose to give it, it will never actively seek it.  The move is also a recognition of India’s economic transformation.  It’s now the third largest investor in the UK and the largest market for British goods outside the EU.

But much of the UK aid money was used to fund projects in some of India’s poorest areas and some will worry that those at the receiving end could suffer.

“After reviewing the programme and holding discussions with the government of India, we agreed that now is the time to move to a relationship focusing on skill-sharing rather than aid,” she said.  “India is successfully developing and our own bilateral relationship has to keep up with 21st Century India.

Although all existing financial grants will be honoured, the UK will not sign off any new programmes.  Last year the UK gave India about £250m in bilateral aid as well as £29m in technical co-operation.

Source: BBC news on 9 November, 2012 – http://www.bbc.co.uk/news/uk-politics-20265583#