ODI Media Comment on DFID decision to end aid to India

9 November 2012
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Jonathan Glennie, Research Fellow, Centre for Aid and Public Expenditure

India is still an incredibly poor country, with poverty at the same level as sub-Saharan Africa. The fact that it is huge means it has nuclear weapons, a space programme, and even its own aid programme, but these are anomalies. If India’s income were spread equally, everyone would be surviving on about $3.86 a day – dirt poor. But it isn’t spread equally, and over 400 million people in India live in even more extreme poverty.

So India needs international solidarity – that much is obvious. But the world is changing, and India is keen to emerge from a patronising aid relationship that really is peanuts relative to the size of its economy.

First, it is time to focus on issues that really matter, but that the UK government would prefer not to acknowledge, like intellectual property rights, favourable trade rules, cutting carbon emission, sorting out the international finance/tax haven regime and regulations for multinational companies. In turn the Indian government needs to radically alter its development path to favour the poorest and most marginalised in its society.

Second, the world needs to contribute substantial finances to help reduce India’s poverty and support clean and climate-compatible growth and development. These billions will not come from DFID or any other government directly, but via multilateral routes such as the UN agencies and the World Bank. We have to make sure we prepare the British public not for an end to aid but for a transformation in its nature.

DFID’s aid programme has never been anything more than a drop in this vast ocean – but it has been a valuable drop, and those poor communities that have benefited from DFID-funded programmes, often via local NGOs, may suffer from this decision.