India’s wealthy elite and its government need to take responsibility for tackling poverty, but it doesn't mean the UK should cut aid

Justine Greening has announced that financial aid from UK to India will end from 2015.

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I was concerned to hear Justine Greening’s announcement today, that Britain is going to cut financial aid to India. But if I am honest, I was far from shocked.

During a recent visit to the UK I was taken-aback by the intense criticism being aimed at the International Development Secretary and her Cabinet colleagues for sticking to Britain’s promises to increase life-saving aid to the world’s poorest people. India’s well-publicised space programme made aid to my country a particular target.

Given my position with Oxfam it will not surprise you that I hope that David Cameron’s government may still face down the critics and maintain the aid budget at current levels. What may surprise you is that I have some sympathy for one of the critics’ key arguments. Those that point out that India’s wealthy elite, its government and yes, its civil society, need to take more responsibility for tackling poverty at home are bang on the money.

As India cements its newfound status as a middle-income country, we cannot expect to be able to rely year after year, decade after decade on the goodwill of foreigners to help Indians in poverty. Nor would we want to. It is time we did more ourselves.

That is one reason why a few years ago, Oxfam India became a fully fledged partner in Oxfam International, funding our work in India by raising donations from the Indian public. It is vital that Indian philanthropists (individuals, trusts and foundations) help fill the void created by departing international donors. Within India the culture of giving is growing, but very slowly.

Nor should the Indian Government be allowed off the hook. The 0.9 per cent of national income it spends on health is the lowest in the world and nothing short of a scandal. Education spending at 3 per cent of GDP is little better. Requiring the individuals and companies benefitting most from the booming economy to pay their fair share in taxes would allow both figures to be increased considerably.

But while I agree on the need for us to do more to sort out our own problems, I do not accept that that should mean cutting aid now. The fact is the UK government’s continued commitment to give aid to India is likely to encourage Indians to take more responsibility for tackling domestic poverty.

Aid can and does help embarrass Indian elites to do more than they otherwise. Take one example - not only has aid to India helped get tens of millions of children into school in the last ten years, it has also helped put pressure on the Indian government itself to spend a lot more on primary education.

Critics also ask why, during a time of austerity, people in Britain should continue to help a country whose economic growth has easily outstripped your own in recent years? But let me ask the same question another way: should UK aid ignore the one in three of the world’s poor who happen to live in India, a country whose 1.2 billion people have an average income per head of $3,650, a tenth of the figure for Britain? That’s 456 million people in India living below the poverty line of 77p a day – equivalent to the combined total populations of the United States, Germany and the UK.

Yes India is a country of growing wealth, but it is also a divided country where the majority of wealth is held by elites and does not trickle down to the poorest people. As Amartya Sen and Sean Dreze have observed: “Nowhere in the history of development has so much high growth contributed so little for so many.”

The needs of poor people in India are no different to people living in Africa or anywhere else - shelter, food for their families, medicines when they get sick, schooling and with it the chance of a better life for their children. Although we have billionaires, in India 250 million people will go to bed hungry tonight.

Britain’s government deserves plaudits rather than brickbats for its aid which is specifically targeted at those who need it. Money goes to our most impoverished states like Bihar, Madhya Pradesh and Orissa – if these were countries in their own right then they would be amongst the poorest in the world. It plays a vital role in improving health services and schools and helping local communities demand accountability from their government.

The British public should be proud of the role its official aid and private donations have played in creating the conditions for the Indian economic successes of today. Official aid has played a key role vaccinating children against the scourge of polio, to the point where the disease which cripples or kills children under 5 has now been all but eradicated. As recently as the mid-1990s, polio was affecting as many as 100,000 Indian children each year – every case a personal tragedy and a tragic waste of human potential. Last year there were none.  

Aid can also contribute more directly to economic success. Nearly 50 years ago Oxfam supported a small cooperative milk dairy project, which has now grown into the biggest milk brand in India, Amul, creating jobs and a future for thousands of families. Amul now has its own trust helping people after humanitarian emergencies and planting trees in rural communities.

As India has grown and become a middle income country, aid has become less significant. That trend can and should continue to the point – hopefully in the not too distant future - when aid is no longer needed. There are things that can be done to speed up the process – trade rules that allow Indian farmers can compete fairly with heavily subsidised European and US producers for example. But tightening the aid tap now would hurt rather than help India’s development. And it would be members of the half billion at the bottom rather than the space programme that would suffer.

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