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US Senator questions aid to India

Arguing that borrowing from countries which receive aid from the US is dangerous, a Republican Senator questioned the decision of the Obama Administration to give financial assistance to nations like India that has bought $39.8 billion of American debt bonds.

world Updated: Jul 19, 2011 07:57 IST

Arguing that borrowing from countries which receive aid from the US is dangerous, a Republican Senator questioned the decision of the Obama Administration to give financial assistance to nations like India that has bought $39.8 billion of American debt bonds.

"Borrowing money from countries who receive our aid is dangerous for both the donor and recipient. If countries can afford to buy US debt, they can afford to fund their own assistance programmes," Tom Coburn said in his report 'Back in Black: A deficit Reduction Plan', unveiling the most ambitious plan yet to break the debt ceiling stalemate.

In his 621-page report, Coburn referred to a recent Congressional Research Service (CRS) which revealed that the federal government gave $1.4 billion in foreign aid to 16 countries, including India and China, to whom the US owes $10 billion each.

According to the US Treasury Department, the largest holder of US debt is China, owning $1.1 trillion Treasury bonds and having received $27.2 million in foreign aid in FY2010. "Brazil held $193.5 billion in Treasury securities and received $25 million in foreign aid, Russia had $127.8 billion and received $71.5 million, and India held $39.8 billion and received $126.6 million from the US," the Senator said.

In a letter to Coburn on May 13, the CRS said India in 2010 received $126.6 million -- this includes $2.5 million for counter-terrorism, $700,000 for combating weapons of mass destruction, $30 million for fighting HIV/AIDS, $22 million for family planning, $19 million for maternal and child health and $13.7 million for fighting tuberculosis.