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 numbers below correspond with the numbering
set out in the Terms of Reference for this inquiry
1. 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 the 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, they
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.
The question to ask is how DFIDI's current programme
is addressing this need. Could not all the resources DFID has
ploughed into India be spent on this front, to help these groups
come out of poverty and exclusion once and for all.
Currently (from the budget and expenditure figures
given in the 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.
DFID's own country plan for India states that
a significant challenge in India is inequality. This is in both
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 the majority of DFID's resources are spent
in other states, and only a minuscule percentage in the states
of Uttar Pradesh and Bihar, for instance. Also over the last three
years, nearly two-thirds 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.)
| 1999-2000 | 2000-01
| 2001-02 | 2003-04
|
| States (AP, (MP, Orissa and WB) | 35,028
| 51,689 | 121,419 | 101,564
|
| National Programme | 61,054
| 53,694 | 59,105 | 54,466
|
| Total %, State to Overall | 36.4%
| 49% | 67.3% | 65.1%
|
| | |
| |
Hence it is clear that while poverty, exclusion and inequities
are among the problems in many North Indian States including those
of UP, Bihar etc, DFIDI programmes have focused on only four states.
The argument often used that other donors would focus on
other states has proved not true. The amount of investments and
the kind are the reasons. Furthermore, with all but six donors
planning to withdraw from India (after the Government of India's
phasing out of assistance from many smaller bilateral donors)
this scenario presents DFIDI with a challenge to reconsider its
focus on particular states.
4. 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 has been in the
following areas:
— Economic and Public Sector Reforms.
It is estimated that (source CAP 2004) in the year 2001-02,
51% of the total budget of DFIDI was spent on the above clusters.
The trends were similar in 2002-03.
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 spent only in four 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 marginalised 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.
Another question to ask would be how DFIDI's efforts have
led to a vibrant civil society holding the state to account, as
this would constitute what could be called 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 four to
five years DFIDI chose to follow a completely 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 privatisation thereof.
Furthermore, power sector reforms were aimed at poverty reduction
and achieving overall 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 privatising state undertakings. These steps harmed the interest
of the common man, 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
maximising profits for the private sector is done primarily in
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 a subsidised 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 raises the issues of
selectivity.
The discomfort of the 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 ones have larger
amounts). Civil Society Institutions have 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
6. 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.
7. The obstacles to achieving the MDGs in India.
8. Progress against relevant DFID PSA targets and the
MDGs in India.
If the MDGs 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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