India was once the biggest recipient of British foreign aid. But by the end of this year, the UK will be ending its provision of bilateral aid (aid from one government directly to another government) to India.Yet despite officially being a ‘middle income nation’, poverty remains a great issue in the country. So how was this decision to cease financial aid to India reached?
The decision to end UK aid programmes in India came into action in 2012 and since then there have been no new aid contracts and all existing schemes will be stopped by the end of this year. This decision has been made in alignment with India’s rapid economic progress, growing at an average of 7% a year. Indeed, the country now boasts a space programme, a multitude of millionaires and gives away millions of pounds in its own aid programmes to needy nations. So why should British taxpayers pick up the slack providing aid for poverty relief?
Yet despite India’s rapidly growing economy, the country is still home to a third of the world’s poorest people. Levels of malnutrition are extremely high, with 40% of the world’s malnourished children in India. Additionally childhood mortality is an ongoing threat, with 1.3 million child deaths each year from preventable illnesses. Consequently some argue that continued aid is exactly what is needed to directly tackle poverty reduction. Nevertheless British aid has been described as ‘a peanut’ by India’s president; our contribution of £200m pales in comparison to India’s own spending of £70bn on welfare. Thus can our aid actually make a difference?
In fact the UK shall continue to give some technical assistance to India after the end of this year, despite bilateral aid to the country being cut. Some describe the aid we give to India as ‘minimal compensation’ for the exploitation created by colonialism, yet this idea is inherently anachronistic. Thus the cessation of bilateral aid to India should be viewed as a progressive move, recognising the growth and development of the country in recent years, emphasising the shift in focus from aid to trade for the years to come.