Britain must change aid policy for India after 2015, MPs warn

The Commons International Development Committee backed the Government’s decision to continue providing £280m a year to combat Indian poverty but called for much stricter controls on cash given to private sector projects and a redirection of money towards priority areas such as basic hygiene.

Retaining help for India while its own government spends large sums on projects such as a space programme has attracted widespread criticism.

The MPs agreed with Ministers, however, that the existence of “large pockets of poverty” within India justified the maintenance of UK aid, for the present.

They expressed concerns at a lack of experience within the Department for International Development (DfID) in dealing with the private sector – through which half the cash is expected to be invested – and demanded “greater clarity” on which projects would be the most effective.

DfID also needed to be “more rigorous” in choosing initiatives to support, and give more attention to improving sanitation and reducing social exclusion, they said.

“We support the UK’s continued development assistance to India for the period up to 2015. However after this the development relationship must change fundamentally to one based on mutual learning and technical assistance where requested,” they added.

Committee chairman Liberal Democrat MP Malcolm Bruce said: “The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this.

“The Indian government has primary responsibility for poverty reduction.

“It has put up taxes and increased its social spending, but the poverty there is on such an extreme scale that it will take many years for India to achieve internationally agreed Millennium Development Goals.”

Oxfam criticised the setting of arbitrary deadlines for the potential end of financial aid.

Senior policy adviser Max Lawson said: “This report clearly shows that UK aid plays an important role in tackling poverty in India, a country with more poor people than the whole of sub-Saharan Africa.

“MPs are right to say that we should keep our aid under review. But future aid to India should be determined by the needs of poor people there and the ability of their government to help them, not by any arbitrary deadline.”