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India aid halt 'should be reversed'

Britain should reverse its decision to halt development aid to India, which was driven more by domestic political pressures than by the economic realities of a country which still has more people living in poverty than the whole of sub-Saharan Africa, a report says.

International Development Secretary Justine Greening announced in November that the UK was halting new commitments to India - historically the biggest recipient of British aid. Existing programmes will be wound down over the next three years, and after 2015 UK support will be limited to technical assistance.

Ms Greening had come under intense pressure to scale back giving to India, which was running at £280 million annually despite the country's remarkable economic boom, which has created thousands of millionaires and allowed Delhi to operate its own space programme.

But the report, by the left-of-centre Institute for Public Policy Research, argued that the "premature" withdrawal of aid was "a tactic for winning votes at home rather than tackling poverty abroad".

Despite rapid GDP growth, averaging around 8% in recent years, India still has huge numbers of people in deep poverty, said the report.

Rather than suddenly withdrawing aid, the UK should refocus it away from wealth creation projects and towards help with health, HIV and good governance in the poorest Indian states, said the IPPR.

And it called on the Government to take a "more holistic" approach to development by working with expatriate Indians living in the UK, who between them send remittances worth more than £2.5 billion back to the country each year, and with UK-based investment funds.

IPPR associate director for globalisation and climate change Will Straw said: "The UK should not give aid to India forever. But withdrawing now is premature given India's significant development challenges; a tactic for winning votes at home rather than tackling poverty abroad."

A DFID spokesperson said: "This report fails to recognise that the decision to change the UK's development relationship with India was an agreement between the UK and the Indian government.

"The Indian government has made clear that what it values most about the relationship is Technical Assistance to make its own welfare spending more effective."

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