UK decides to end financial aid to India by 2015

PanARMENIAN.Net - The UK is to end financial aid to India by 2015, international development secretary Justine Greening has said, according to BBC News.

Support will gradually be phased out between now and 2015, saving £200m ($319m), and the UK's focus will then shift to offering technical assistance.

Greening said the move, which will be popular with Tory MPs, reflected India's economic progress and status.

Giving his reaction, India's foreign minister Salman Khurshid said: "Aid is the past and trade is the future."

The UK's financial support to India, one of the world's fastest-growing economies, has been a cause of concern among Conservative MPs amid suggestions that funding had ended up supporting prestige projects such as India's space program.

Ministers have defended the level of financial help in the past on the basis of the extreme poverty persisting in rural areas and historic colonial ties between the two countries.

Greening has been conducting a review of all financial aid budgets since taking over the role in September and visited India earlier in the week to discuss existing arrangements. She said the visit confirmed the "tremendous progress" that India was making and reinforced her view that the basis of the UK's support needed to shift from direct aid to technical assistance in future.

"After reviewing the program and holding discussions with the government of India, we agreed that now is the time to move to a relationship focusing on skillsharing rather than aid," she said. "India is successfully developing and our own bilateral relationship has to keep up with 21st Century India...It is time to recognize India's changing place in the world."

Although all existing financial grants awarded will be honored, the UK will not sign off any new programs from now on.

In making the decision, the UK is citing the progress India has made in tackling poverty in recent years. It says 60 million people have been lifted out of poverty as a result of the doubling of spending on health and education since 2006.

The UK also says bilateral trade between the two countries is flourishing, growing 20% in 2010.