News / Asia

End of British Aid Marks Economic Shift for India

Indian Foreign Minister Salman Khurshid, left, with British Foreign Secretary William Hague, New Delhi, Nov. 8, 2012.
Indian Foreign Minister Salman Khurshid, left, with British Foreign Secretary William Hague, New Delhi, Nov. 8, 2012.
Anjana Pasricha
Britain has decided to stop giving development aid to India - a country with rising incomes and a growing economy. The move marks a change in the global profile of the former British colony from a poor country dependent on foreign aid to an emerging economy which has itself become a donor nation.     
 
Announcing the decision to stop direct aid to India by 2015, British officials said it is time to recognize India’s changing place in the world.  
 
In India, the move was met with a nonchalant shrug by political leaders. Foreign minister Salman Khurshid said “aid is past, trade is future.”
 
Earlier this year, President Pranab Mukherjee, formerly India’s Finance Minister, had called the British annual aid contribution of about $360 million a “peanut.”
 
For many years after India’s independence from British rule, New Delhi was among the largest recipients of foreign aid in the world.
 
But economist D.H. Pai Panandiker says that over the past decade, the aid has become insignificant to India.
 
“The equation has completely changed," notes Panandiker. "It is no longer the India of pre-2000. Post 2000 India is entirely different. The total annual export earnings would be $ 300 billion. Against that aid of a small amount of a few million dollars becomes almost invisible. India is now self reliant, it does not need any foreign assistance to develop.”
 
In fact, a growing economy has allowed a reversal of roles, and made it possible for New Delhi to emerge as a donor nation. In recent years, India has given a $2 billion aid package to Afghanistan, and has extended lines of credit worth several billion dollars to African countries and Bangladesh. With a growing aid portfolio, India recently announced plans to establish its own aid agency.
 
Analysts say India wants to be seen as an emerging global power which is no longer dependent on handouts by richer countries.
 
However development experts point out poverty is still rampant in India, especially in underdeveloped regions of the country. Two thirds of the 1.2 billion people live on less than $2 a day.   
 
Addressing a seminar in New Delhi Friday, India’s Rural Development Minister, Jairam Ramesh, says that nutrition and health remain critical issues for India.   
 
“A country like Kenya has had a faster decline in infant mortality rates in the last five years than what India has witnessed in the last 25 years. We all know that the health system in India has collapsed. In many of the poor parts of India in fact, the public health system simply does not exist,” Ramesh says.
 
Development economists say while foreign aid may only add up to a small amount, it makes a significant impact on poverty alleviation programs, and the time to “disengage” is not right. An author and commentator in New Delhi, Gurcharan Das, agrees.
 
“For the very poor it does matter, and very often development aid of this kind brings with it organization and technology and method of distribution which make it more efficient,”  Das says.
 
The decision to end British aid comes as many donor countries take a closer look at the need for foreign aid. It also comes at a time of economic gloom in Britain, where some have questioned handouts to Asia's third largest economy.

You May Like

Obama: Alaskans Feel Signs of Climate Change

They're seeing bigger storm surges as sea ice melts, more wildfires, erosion of glaciers, shorelines More

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

This forum has been closed.
Comment Sorting
Comments
     
by: Bill
November 18, 2012 11:10 PM
William Hague is remarkably silent on Zimbabwe with regard to the situation there.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs