India tells Britain: We don't want your aid
India’s Finance Minister has said that his country “does not require” British aid, describing it as “peanuts”.
Pranab Mukherjee and other Indian ministers tried to terminate Britain’s aid to their booming country last year - but relented after the British begged them to keep taking the money, The Sunday Telegraph can reveal.
The disclosure will fuel the rising controversy over Britain’s aid to India.
The country is the world’s top recipient of British bilateral aid, even though its economy has been growing at up to 10 per cent a year and is projected to become bigger than Britain’s within a decade.
Last week India rejected the British-built Typhoon jet as preferred candidate for a ?ú6.3 billion warplane deal, despite the Development Secretary, Andrew Mitchell, saying that Britain’s aid to Delhi was partly “about seeking to sell Typhoon.”
Mr Mukherjee’s remarks, previously unreported outside India, were made during question time in the Rajya Sabha, the upper house of parliament.
“We do not require the aid,” he said, according to the official transcript of the session.
“It is a peanut in our total development exercises [expenditure].” He said the Indian government wanted to “voluntarily” give it up.
According to a leaked memo, the foreign minister, Nirumpama Rao, proposed “not to avail [of] any further DFID [British] assistance with effect from 1st April 2011,” because of the “negative publicity of Indian poverty promoted by DFID”.
But officials at DFID, Britain’s Department for International Development, told the Indians that cancelling the programme would cause “grave political embarrassment” to Britain, according to sources in Delhi.
DFID has sent more than ?ú1 billion of UK taxpayers’ money to India in the last five years and is planning to spend a further ?ú600 million on Indian aid by 2015.
“They said that British ministers had spent political capital justifying the aid to their electorate,” one source told The Sunday Telegraph.
“They said it would be highly embarrassing if the Centre [the government of India] then pulled the plug.”
Amid steep reductions in most British government spending, the NHS and aid have been the only two budgets protected from cuts.
Britain currently pays India around ?ú280 million a year, six times the amount given by the second-largest bilateral donor, the United States. Almost three-quarters of all foreign bilateral aid going to India comes from Britain. France, chosen as favourite to land the warplane deal, gives around ?ú19 million a year.
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