UK continues £1bn India aid despite 'peanuts' jibe

Britain intends to fulfil its commitments on aid to India, despite a minister from the emerging economic giant's government dismissing the £1 billion assistance as "peanuts", Downing Street said today.

Finance minister Pranab Mukherjee said that India no longer wants or needs the British money, which he described as "a peanut in our total development expenditure".

His comment sparked calls for the programme to be cancelled, with Conservative MP Philip Davies saying: "India spends tens of billions on defence and hundreds of millions a year on a space programme. In those circumstances, it would be unacceptable to give them aid even if they were begging us for it.

"Given that they don't even want it, it would be even more extraordinary if it were to be allowed to continue. There will be millions of hard-pressed families wondering why on earth the Government is wasting money in this way."

The Government is committed to increasing aid expenditure to the United Nations target of 0.7% of GDP by 2013. A review of aid last year led to a reduction in the sums going to India, but committed the UK to spending an average of £280 million a year in the country's poorest states until 2015.

Prime Minister David Cameron's official spokesman said he understood that Mr Mukherjee's comments - widely reported in today's press - had been made about a year ago.

The spokesman added: "We have an aid programme in this country, we have aid commitments. We continue to think it is right to stick to those aid commitments."

He added: "We have reviewed our aid commitments to India. We continue to provide aid to India, but we focus it on the three poorest states.

"The reason we are doing that is because a huge number of the poorest people in the world live in these states.

"The Government has always been very clear about sticking to its aid commitments and the fact that it would not balance the books on the backs of the poorest people in the world. It is going to stick to that."

PA