Conclusions and recommendations
The case for development assistance to India
1. We
agree that reducing income poverty is vital, but we were surprised
by how little we heard from DFID about work to address India's
'off-track' MDGs. (Paragraph 18) We think that DFID should prioritise
work on India's 'off-track' MDG goals. (Paragraph 18)
2. We are convinced
that, at present, India qualifies easily for DFID's assistance,
on both high poverty and good governance grounds. (Paragraph 24)
3. Although India's
shift to MIC status is "some way off" we think that
DFID should already be considering its likely implications. (Paragraph
25) Under DFID's current policy, India's elevation to MIC status
would necessitate a drastic reduction in the volume of DFID's
bilateral assistance to the country. A significant reduction in
DFID's assistance to India would be problematic if it led to the
curtailment of programmes in India's poorest states (Paragraph
26)
4. We think that DFID
ought to be developing its work in India's poorest states. We
would be very concerned if the future success of India in reducing
levels of income poverty (and thereby attaining MIC status), led
DFID to significantly reduce its work with India's remaining hundreds
of millions of poor and socially excluded people. (Paragraph 26)
5. We endorse the
assertion of DFID, the FCO and HM Treasury in their September
2004 consultation paper on aid conditionality that "developing
countries must have room to determine their own policies for meeting
the Millennium Development Goals" and applaud the UK government's
renewed emphasis on building partnerships for poverty reduction
with developing country governments. We look forward to seeing
how the shift in DFID's thinking set out in the consultation paper
impacts on DFID's work in practice. (Paragraph 28) Although we
approve of DFID's signalled intention to stop attaching policy
conditions to its development assistance, we are convinced of
the need for the Department to continue to attach process conditions,
which aim to improve the quality and effectiveness of aid. (Paragraph
97)
6. We were encouraged
to hear that DFID has undertaken analysis of the risks to development
assistance in India in the course of creating its new CAP for
the country, and encourage the Department to repeat such analysis
on an ongoing basis. (Paragraph 33)
7. We attach great
importance to the continued maintenance of the UK's cordial and
productive relationship with India. We believe that DFID's relationship
with the GoI should be seen as a relationship between two partners
rather than in terms of a donor and recipient. (Paragraph 35)
8. We support DFID's
stated intention to support India's emerging role as a donor,
and to expose India to global best practice and harmonisation.
(Paragraph 36)
9. HMG needs to re-assess
its progress on environmental MDGS. (Paragraph 38)
Economic development, governance and poverty reduction
10. It
is a positive sign that DFID has begun to include components targeting
socially excluded groups in its projects and programmes. We saw
little evidence of the impacts of such initiatives, however. DFID
must closely monitor the success of these programmes in reaching
the poorest and most marginalised people. (Paragraph 46) We urge
DFID to give careful consideration to the question of whose voice
they are promoting through their participatory work on social
exclusion, and what policy influences they are therefore facilitating.
(Paragraph 44)
11. We think that
DFID's strategy of mainstreaming gender and social equity throughout
its India programme does not give sufficient weight to the significance
of these issues. (Paragraph 49) We recommend that gender and
social exclusion audits, or similar exercises, are undertaken
throughout DFID's India programme on a regular basis, in order
to maintain DFID's focus on these issues. (Paragraph 45)
12. We saw no evidence
that DFID has found a way to work with the GoI which ensures a
focus on socially excluded groups. We encourage DFID to increase
its efforts to raise the profile of social exclusion and inequality
issues with the GoI. (Paragraph 47) We recommend that DFID makes
addressing social exclusion one of the central objectives of its
India programme. (Paragraph 49)
13. We encourage DFID
to increase the relatively small budget currently allocated to
work with civil society groups representing socially excluded
groups. (Paragraph 48)
14. We think that
DFID should involve itself in the issues of judicial and penal
reform in India. In particular the Department could engage with
the work of India's National Human Rights Commission, which has
sought to emphasise the human rights of prisoners. We think that
DFID should also encourage the governments of their focus states
to push through judicial and penal reforms, and should commit
funds to civil society organisations working on these issues.
(Paragraph 54)
15. We encourage DFID
to explore the potential benefits of collaborating with other
donors and agencies to address governance issues. (Paragraph 55)
16. The scrutiny undertaken
by state legislative assemblies and India's national parliament
form essential parts of India's system of governance. It is therefore
important that DFID develops its efforts to raise the profile
of development issues with MLAs and MPs. (Paragraph 56)
17. We encourage DFID
to work with UK companies to help them maximise the pro-poor benefits
of their engagement with India. (Paragraph 63)
18. We encourage DFID
to work with NRIs and South Asian diasporic organisations in the
UK, in order to maximise both the level of funds remitted to India,
and the pro-poor impacts which those funds have. (Paragraph 67)
The nature of engagement
19. Although
probably sound in principle, we did not hear a convincing case
for DFID's decision to create a 50/50 balance in its distribution
of funds between its National and state programmes. We are concerned
that the budgetary shifts which this policy entails should not
be implemented too hastily. (Paragraph 69) Given what DFID told
us about the success of its individual state programmes, we feel
that the Department has not adequately justified and explained
its decision to double its spending through its National Programme
in 2004/5. We hope that this funding decision has been made on
its own merits and not determined by the GoI's changing priorities
on the provision of aid. (Paragraph 84)
20. Given the substantial
aid investments which DFID has made in AP, we are concerned by
the paucity of evidence that these have delivered pro-poor results.
(Paragraph 76) We think that DFID's decision to direct a very
large proportion of its India budget into a single state programme
ought to have been better justified, given the considerable cost
to the UK taxpayer involved. (Paragraph 77)
21. We are concerned
that DFID's policy of supporting reforming states should not exacerbate
the already growing inequalities between states in India. (Paragraph
77)
22. We recommend that
in UP and Bihar, DFID should work through certain, carefully selected
state organisations and district administrations, as well as with
international NGOs and UN agencies. (Paragraph 81)
23. We can see the
merit of DFID's close relationship with the World Bank, but are
concerned that this should not be allowed to undermine either
the distinctiveness of the DFID's work in India, or understanding
of DFID policies among donors and civil society. (Paragraph 86)
24. We think it is
sensible for DFID to reallocate funds previously directed though
PRBS to the state-level budgets needed in order to secure the
release of centrally sponsored scheme funds. (Paragraph 91)
25. DFID's growing
support for CSSs would be problematic if it led the Department
to neglect more 'hands on' work with non-focus states. (Paragraph
94)
26. With India likely
to be acknowledged as the country with the largest number of HIV
positive citizens in the world during 2005, we are pleased that
DFID recognises the country's window of opportunity to act decisively
to tackle the epidemic. We strongly encourage DFID to do all it
can to support the GoI in taking such decisive action. (Paragraph
96)
27. Although we were
encouraged to hear that DFID has been involved in the appraisal
of the SSA, we remain concerned that we have not seen any evidence
of the impacts which DFID was able to have as a result of this
involvement. (Paragraph 98)
28. Incentive-based
financing is a sensible strategy, which discourages the movement
of government funds away from those sectors where DFID has become
engaged, as well as enabling DFID to maximise their leverage over
the financial management and auditing of CSSs. We encourage DFID
to continue to develop and deploy such mechanisms. (Paragraph
99)
29. We are not convinced
that the Department has developed adequate mechanisms for measuring
their impact on CSSs. The lack of tools for measuring impact makes
it difficult to evaluate DFID's relative contribution via different
aid instruments in India. The difficulties of measuring the impact
of DFID's work in India make it hard to establish either the Department's
comparative advantage for working in India or the value of working
in India rather than other countries. Such difficulties do not
provide a reason for DFID to abandon their India programme, but
the Department needs to work harder to provide evidence of its
impact. (Paragraph 133)
30. Much of what DFID
told us about the impact which it had had on CSSs was short on
evidence and often limited to assertion. (Paragraph 132) We are
concerned that DFID has decided to substantially increase its
investment in CSSs while convincing evidence of the value which
DFID has been able to add CSSs to date remains scant. Furthermore,
DFID has not made clear how their growing focus on CSSs at central
level fits into their overall strategy for working with Government
in India, nor how the Department plans to create synergies between
its central and state-level work. (Paragraph 100)
31. We see the effective
replication of DFID's project work as a key factor determining
the Department's impact in India and encourage DFID to place a
substantial focus on the issue. (Paragraph 122)
32. DFID should continue
to persevere with funding civil society organisations through
the PACS and OCSP programmes. Indeed, we encourage DFID to explore
the possibility of replicating its OCSP programme in other states.
As well as funding individual organisations, DFID should develop
mechanisms to encourage civil society networking within India,
in order to promote lesson learning and the transferral of best
practice between organisations. (Paragraph 124)
33. Wherever possible,
DFID should make use of the considerable expertise of Indian consultants.
DFID needs to ensure that all its technical assistance is provided
in such a way as to enable recipients to come to their own conclusions
about the value of the policies advocated. (Paragraph 126)
34. DFID should build
on the existing strengths of its India programme by devoting a
greater proportion of its resources towards technical assistance,
research and the development and dissemination of good practice.
(Paragraph 127)
35. We encourage DFID
to continue developing links with Indian development institutions,
through international secondments, collaborative programmes and
joint research initiatives. In many areas India is now at the
cutting edge of international development policy and practice,
and so the promotion of such links would be mutually beneficial
for development practitioners in the UK and India. The encouragement
of such global networking could be seen as DFID's legacy in the
sub-continent. (Paragraph 128)
Managing, monitoring and evaluating impact
36. Two
of the most significant problems which emerged from our inquiry
were: the difficulty of evaluating the impact of development programmes
in India and the challenge of disaggregating DFID's contribution
to that impact. (Paragraph 130)
37. We encourage DFID
to support donors who are working to improve the extent and reliability
of data collection on development indicators in India. (Paragraph
130)
38. DFID needs to
develop its information strategy to be clearer about communicating
the Department's policy choices, including their likely trade-offs,
to be more open about explaining its support for Indian policies,
and to be more supportive of the right to information of Indian
citizens. (Paragraph 134)
39. We recommend that
DFID reports on the progress of its work to improve the management
of its India programme in future Departmental Annual Reports.
(Paragraph 136)
40. During our visit
to India we saw several examples of projects which appeared effective
and worthwhile, and heard about DFID's contributions to various
state and central government programmes. We did not really get
a sense, however, of how DFID's different activities were prioritised
within its India programme. DFID still does not seem to have a
coherent sense of where its strategic focus should lie in India.
(Paragraph 137) In the next CSP we would expect to see a clearer
statement of the priorities of DFID's India programme. (Paragraph
137)
41. We recommend that
DFID reinforces the assurances we have been given by publishing
data on the redundancies which have occurred as a result of the
Gershon review, once these are available. (Paragraph 140)
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