India would rather give up UK aid than take a cut

Financial aid from the UK is turning increasingly controversial.

Even as the UK’s department for international development (DFID) is in the process of reviewing the aid to developing countries, India has maintained its stand that it would like to voluntarily give it up rather than face any reduction in the financial assistance from Britain.

Although the UK is yet to take a final decision on the matter, a source told DNA that India has already informed the British government that it prefers to surrender the aid. The source
added that the total foreign aid coming to India is quite insignificant when compared with the GDP of the country. “So, India can afford to give it up,” he added.

Union finance minister Pranab Mukherjee had made the government stand on UK aid clear during the monsoon session of Parliament. According to the FM, when British prime minister David Cameron was on a state visit to India recently, India had made it clear that “before the UK decides to discontinue the aid, they should keep us informed. We would voluntarily suggest to them that we do not require the aid.”

“The contribution of the external assistance to our total GDP is 0.4%, and, to our total budgetary expenditure, it has also come down from 3.4% to 2.5%. Therefore, it is a peanut in our total developmental exercises,” Mukherjee had told the Rajya Sabha.
The new UK government has decided to review its entire aid programme for developing countries; India is among countries which receive these grants.

It is estimated that India has received around $2.3 billion worth of aid from the UK in the past five years.

The UK, reeling from the global financial crisis and subsequently weak economy, is determined to slash the country’s deficit by around 25% in the next five years.