Summary
According to the International Development Committee, UK aid in India is practically insignificant and whilst it should continue for the next four years, change is required thereafter.
In 'The Future of DFID's Programme in India’ (HC 616), the Committee examines how effective the Department for International Development’s (DFID) programme of aid has been in reducing poverty in India and suggests that funding be redistributed to tackle key problem areas.
The Government of India has primary responsibility for poverty reduction, having already lowered levels from 60% in 1981 to 42% in 2005 and although the economy is growing, large pockets of poverty remain.
The DFID plans to change some of its programme by:
- focusing primarily on three of the poorest states - Bihar, Madhya Pradesh and Orissa;
- changing the sectors it prioritises; and
- putting 50% of its budget through the private sector by 2015.
The Committee supports the decision to focus on the poorest states provided it is supported by the Government of India. They recommend supporting sanitation, malnutrition, maternal and child health and social exclusion in particular.
The Committee supports the Government's aim to forge a new enhanced partnership with India with its mutual benefits from cooperation in trade and investment but the DFID must ensure UK Government policies help protect the poorest and reduce inequalities.
Assuming that growth continues at current rates, the Committee predicts over the next four years that India will have increased its capacity to tackle poverty and meet the millennium development goals.
DFID should continue to provide technical assistance where requested, but is advised to rethink its funding mechanism by 2015.
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