Memorandum submitted by ActionAid India
The written evidence seeks to address the review
in the following manner. It raises the basic questions on poverty
and deprivation, and raises appropriate questions for DFID and
its strategy over the past years and some more recently. These
are given below.
The case for aid to India
1. The rationale for, and added value of, aid
to India, taking account of its needs and those of other recipients
of development assistance.
2. The appropriate
level of overall resource transfer, size of DFID programme and
its distribution between states and the central government.
Our Feedback: The
case for Aid to India
The case of Aid to India, is a question of where
the current development aid of DFID is focused, in relation to
the needs of social change and development. As DFID's analysis
itself points out, a quarter of world's poor live in India and
there is a long way to go to achieve the goal of eradicating poverty.
Moreover, long-standing inequities have not reduced substantially.
People belonging to Scheduled Castes continue to be treated as
untouchables and more than a 100 different forms of untouchability
practices continue even today (ActionAid India's National report
on Status of Untouchability). In India, while persons from Scheduled
Castes and Tribes are around a quarter of the population but account
for more than 40% of those who are the poor. Among the landless,
non skilled wage labourers which constitute the poorest in India,
tribals and scheduled castes, predominate.
Hence a large segment of the quarter (Scheduled Castes
and Tribes), is among the poorest and presents a challenge for
inclusion and economic development.
1. The question to ask is how DFIDIs current programme
is addressing this need. Could not all the resources DFID has
ploughed in India, be spent on this front, to help these groups
come out poverty and exclusion once and for all.
Currently (from the budget and expenditure figures
given in Country Assistance Plan of 2004) it could safely be said
that less than a third of spending is being spent both directly
(very little) and indirectly on the above social groupings.
2. The next question is the specific focal states
of DFIDI in India, and the argument of selectivity.
DFIDs own country plan for India states that significant
challenge in India is inequality. This is both in spatial and
social sense. The Country assistance plans over the past years
have identified these trends and have stated that the differences
between states are widening. Poverty is now concentrated in the
poorer states of the north and east. 54% of India's poor live
in Bihar, Orissa, Uttar Pradesh and Madhya Pradesh, with the highest
number being in Uttar Pradesh and Bihar.
Yet majority of DFID's resources are spent in other
states, and only a miniscule percent in the states of Uttar Pradesh
and Bihar, for instance. Also over the last three years, nearly
2/3 of DFIDI's resources have consistently been devoted to AP,
West Bengal, Orissa and Madhya Pradesh. Furthermore, while the
allocations for the State plans for the states of AP, Orissa,
West Bengal and Madhya Pradesh have grown, the allocations for
the DFIDI's national kitty have reduced. The National Programmes
among other things provide support to work in other states.
(see table on history of spending, state and national,
based on DFIDI Country plan for India)
| 99-2000 | 2000-2001
| 2001-2002 | 2003-2004 |
| States (AP,MP, Orissa and WB) | 35028
| 51689 | 121419 | 101564
|
| National Programme | 61054 |
53694 | 59105 | 54466
|
| Total %, State to Overall | 36.4%
| 49% | 67.3% | 65.1%
|
Hence it is clear that while poverty, exclusion and inequities
are focused in many North Indian States of UP, Bihar etc, DFIDI
programmes have only focused on 4 states.
The argument often used that other donors would focus on other
states has not proved true. The amount of investments and the
kind are the reasons. Furthermore, with all but six donors planning
to withdraw from India (after Govt of India's phasing out assistance
from many smaller bilateral donors) this scenario presents DFIDI
with a challenge to reconsider its focus on particular states.
3. If Social Inclusion and extreme poverty for particular social
groupings is a problem then it is worth seeing how DFIDs programmes
have addressed this concern.
A large portion of DFIDI programme spend have been in the following
areas -
Energy Efficiency,
Power Sector Reforms
Economic And Public Sector Reforms
It is estimated that (source CAP 2004) in the year 2001-2002,
51% of the total budget of DFIDI was spent on the above clusters.
The trends were similar in 2002-2003
Even of the remaining budget, the amount spent for the poor groups,
as DFID defines them, and on the issues facing them is marginal
on account of two reasons -
1. It is only spent in 4 states which are not the poorest
2. Only a small segment of the programmes deal with the groups
as defined above. For example, there are in the segment hardly
any direct programmes that deal with landlessness, or social inclusion.
Therefore, it would seem that DFIDI is not focusing its activities
on the most vulnerable and marginalized groups, including through
engagement with civil society. This poses a threat to the achievement
of DFID's Country Assistance Plan because of gender and other
social discrimination.
4. Another question to ask would be how DFIDIs efforts have led
to a vibrant civil society holding the state to count, as this
would constitute what could be called as a sustainable approach,
where people are empowered to assert their rights in the context
of a welfare state.
While this seems to be changing now, in the past 4-5 years, DFIDI
chose to completely follow a hands off approach. This meant that
the resources were largely tied up with the state governments,
and only a minuscule quantum to strengthen the voices of the civil
society and community based/community groups. The vulnerability
of this approach in terms of changes in governments have been
known earlier. And this is not the reason alone, as articulated
above to strengthen the civil society. Recent experiences in Andhra
Pradesh, one of DFIDI's focus states where the outstanding power
bills have been waived, and free power promised, prove the vulnerability
of the approach DFIDI has been following in the name of reform
of key public services and privatization thereof.
Furthermore, power sector reforms were aimed at poverty reduction
and achieving over all human development. But the experiences
reveal the contrary. The poor were ignored since in the name of
financial reforms the State has had to retreat from welfare and
other social sectors, slashing the subsidies that provide relief
to the poor and privatizing state undertakings. These steps harmed
the interest of the common man, and threw the workers out of jobs
and imposed burdens on the people by raising the cost of public
utilities.
The essence of the power sector reforms was aimed to hand over
this vital sector to private players and prepare the ground for
these players to appropriate huge profits. Conditions for maximizing
profits for the private sector is done primarily by two ways.
Firstly, to increase the power tariff substantially to ensure
reliable profits for the private companies. Secondly, using the
Bank funds for creating a reliable power infrastructure so that
the private players can use it to accumulate profits at the cost
of public money. It has become evident that the main point of
the reforms has been to withdraw subsidies for poor consumers
but to establish subsidized high cost infrastructure for private
companies through funds obtained from the Bank, despite the fact
that the people must subsequently bear this cost. The purpose
of improving the welfare of the poor does not seem to have been
met. For example, in Andhra Pradesh tariff rates increased and
the subsidies were withdrawn, contradicting the very logic of
DFID's intervention in a poor state. When poor people can pay
higher tariffs they are not poor and thus raise the issues of
selectivity.
The discomfort of masses over reforms were reflected in the recent
elections where the government supporting the reforms were dethroned
in favour of the one that announced free power and waived outstanding
dues of farmers (the larger once have larger amounts). Civil Society
Institutions has been agitating against the reform process on
non-transparency, irregularities at different stages but could
not counter effectively the anti poor trends.
MDGs and PSAs
3. The role of the MDGs in shaping DFID's programme of assistance
to India; the emphasis given to gender equality, SRH and combating
HIV/AIDS.
4. The obstacles to achieving the MDGs in India.
5. Progress against relevant DFID PSA targets and the MDGs
in India.
If the MDG's are to be achieved in India, the country, being a
developing nation, will need a great inflow of aid and a focused
approach. Also, the MDG to promote gender equality and empower
women needs to be addressed adequately in the DFID India Country
Plan.
May 2004
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