Minister decides to end aid to ‘booming’ India

The country’s controversial programme of direct financial assistance to India will be wound down over the next three years after International Development Secretary Justine Secretary announced an immediate halt to any further commitments.

The move prompted criticism from some humanitarian organisations, who warned that UK aid still made a difference to the poor of India despite the country’s increasing wealth.

But it will delight many Tories who have taken issue with David Cameron’s continued commitment to overseas aid despite large spending cuts at home.

After 2015, UK support for India will consist of technical assistance, with the provision of development expertise which officials said would still cost about one 10th of the current programme.

But there will be no more direct aid, which has been running at £280m a year since Ms Greening’s predecessor Andrew Mitchell reduced it last year.

While aid programmes in India that are already under way will be completed as planned, no new ones will be signed off, reducing intended spending between now and 2015 by about £200m.

Ms Greening, who took responsibility for the UK aid budget in September, announced the change after discussions with the Indian government this week.

“Having visited India I have seen first hand the tremendous progress being made.

“India is successfully developing and our own bilateral relationship has to keep up with 21st century India. It’s time to recognise India’s changing place in the world,” she said.

“It is of course critical that we fulfil all the commitments we have already made, and that we continue with those short-term projects already under way, which are an important part of the UK and government of India’s development programme.”

Critics of the UK’s continued spending on Indian development point to the country’s massive budget, which funds a space programme.

Indian finance minister Pranab Mukherjee last year said the country no longer wanted or needed UK aid, describing the money as “a peanut in our total development expenditure”.

But Oxfam raised concern that ending cash aid to India may be “too hasty”, warning that the poverty challenge there remained “huge”.

Campaigns and policy director Phil Bloomer said: “Despite the fact India is a country of growing wealth it is also a hugely divided country with extreme levels of poverty and inequality.

“The scale of the challenge remains huge, as 250 million Indian citizens go to bed hungry tonight.”