The British government has been pilloried for ‘subisidising’ India’s space programme after Britain’s aid to India, running into nearly half a billion dollars per year, was protected from swingeing public sector cuts announced on Wednesday.
Britain’s assistance to India is its largest aid programme, amounting to £800 million ($1.25 billion) over 2008-2011. While Prime Minister David Cameron has made Britain’s relationship with India a policy priority, the Indian aid has thrown a challenge to a government grappling with the effects of a bruising recession.
When Chancellor George Osborne announced public sector spending cuts of £81 billion on Wednesday — affecting vital areas of life, including health, policing and pensions — he said British overseas aid, by contrast, will jump to 0.7% of gross national income by 2013.
Aid to Russia and China — £190,000 and £40 million respectively in 2008-09 — was ended but the Indian component was ring-fenced pending a wide-ranging review of aid in January 2011.
The question a lot of Britons are now asking is why India needs foreign aid to overcome poverty when it projects itself as an economic powerhouse on the world stage.
“Overseas aid is a waste of taxpayers’ money that… funds fast-growing countries like India, whose economy has grown by nearly 8.8% in 2010 and which has its own space and nuclear weapons programmes,” said Sam Bowman of the Adam Smith Institute, a thinktank. “At a time when the British government is cutting spending domestically it makes no sense to increase overseas aid spending.”
Mark Hoban, a minister in the finance ministry, was guarded when asked about the future of Indian aid. “I did not hear the chancellor mention India,” he said. “Our commitment is that UK will be one of the first major economies to achieve 0.7% of gross national income on aid by 2013. That’s a significant economic commitment.”
The reason Britain continues to provide aid to India is that the country is seen as a “complex case,” officials said. According to British estimates, India is still home to 456 million people who live in poverty — 42% of India’s population and one-third of the world’s poor.
Meanwhile, Britain’s decision to increase aid to conflict-ridden countries by as much as 30% to £3.8 billion — with a “particular focus” on Pakistan and Afghanistan – also came in for criticism from aid charities, who fear money will be diverted from poor but stable countries for geo-strategic reasons.