British financial support to India to get axed by 2015

This article was last updated on April 16, 2022

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International Development Secretary, Justine Greening has announced today that Britain will stop providing financial support to India by 2015 and will make no new commitments from immediate effects, marking a turning point in relations between the countries almost 70 years after India became independent from Britain.

The move to stop aid to India from 2015 will save about £200 million between now and then. Instead Britain will help in terms of schemes of sharing expertise in fields from healthcare to economic growth.

This step was welcomed by critics of the traditional support programme who queried about U.K. sending £280 million this year to a nation rich enough to have its own space programme yet millions others in several regions live below poverty line.

Aid programmes already in pipeline will continue until 2015 so that existing schemes are not scrapped overnight. Officials are of the view that the new form of non-cash assistance will cost only tenth of the original aid and may in some cases generate economic returns.

The decision was taken after Ms. Greening in his trip to India this week, was told that the Indian government valued Britain’s “technical assistance” far more than money. Ms. Greening said: “It’s time to recognise India’s changing place in the world. I have seen first hand the tremendous progress being made. India is successfully developing, and our own bilateral relationship has to keep up with 21st Century India.”

Also in February this year, Pranab Mukherjee, the then India’s finance minister and now the country’s president, suggested Britain’s aid payments were “a peanut in our total development expenditure” as India’s own overseas aid programmes is worth £328 million a year, more than the £280 million annual Britain grant to the country.

The Indian economy is booming by eight percent a year and exports from the U.K. surged by 37 percent in 2010.

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