India Does Not Need Aid From Britain, Say Mps

The British government should review its aid to India, because rapid economic progress indicates that it will become a middle-income country in 10 to 15 years, the Commons international development committee recommends today.

India is the biggest single recipient of aid from the Department of International Development (Dfid): £200m a year at present, estimated to rise to £300m in the medium term.

The Indian government has long been saying privately that it no longer needs aid from Britain, but continues to accept it, mainly because of the historical relationship between the two countries.

The committee's report recommends the government to "continually revisit" its rationale for providing assistance to India.

"Although 350 million of India's population live on less than one dollar a day, India is developing rapidly," it says.

Kuldeep Bhardwaj, a spokesman for the Indian high commission in London, said yesterday that his country no longer accepted aid from most governments.

But it did not say no to Britain, for historical reasons.

He said the Indian economy had been in bad shape in the 1980s and early 1990s, but now had $137bn (£70bn) in foreign exchange reserves.

"We can do without the aid," he said.

The committee noted that after the south Asian tsunami in December India refused international aid, and indeed donated $22.5m to Sri Lanka, the Maldives, Indonesia and Thailand.

The international development committee expresses concern that the Indian government was changing its aid policy so that British cash would be channelled to the central government for distribution rather than, as at present, sent directly to the poorest states.

The committee's report concludes: "Although the time has certainly not yet arrived when Dfid should be considering withdrawing its programme of assistance from India, it has become visible on the horizon.

"Dfid needs to start thinking now about when and why it might decide to taper its India programme, assuming of course that the government of India's own policy decisions do not pre-empt this decision."