Examination of Witnesses (Questions 37-39)
DR CHARLOTTE
SEYMOUR-SMITH,
MRS ARUNA
BAGCHEE AND
MR JEREMY
CLARKE
5 JULY 2004
Q37 Chairman: Welcome. Dr Seymour-Smith,
presumably you are based in Delhi and Jeremy is based here in
London?
Mr Clarke: Yes.
Q38 Chairman: Aruna, I am not quite sure
whether you are based in Delhi or London?
Mrs Bagchee: I am based in Delhi.
Chairman: We now know where everyone
is coming from. Thank you very much for coming and helping us
with our inquiry. Obviously India has the largest bilateral development
programme from DFID and it is a topic in which we are understandably
interested. Piara is to begin with the first question.
Q39 Mr Khabra: This is a question to
which the Committee are very keen and interested to know the answer
and that is, why should DFID be committed to further and indeed
enhanced levels of assistance to India given its status as it
is in the modern circumstances, the attitude to aid and potential
to meet the income poverty Millennium Development Goal (MDG) without
assistance? Why not switch resources to parts of Africa or other
parts of South Asia where there is more poverty? This is a question
which has been asked before and I would like to repeat it again.
Dr Seymour-Smith: Perhaps I will
start trying to give an answer to that question and bring in Jeremy
and Aruna in support. First of all, looking at the way that DFID
allocates its aid overall—and Jeremy can perhaps say a little
more—we are looking at numbers of people in poverty which,
in the case of India, are extremely high. If we measure by the
international poverty line of one dollar a day, there are between
300 and 350 million people in India below that poverty line and
even measuring by the more modest national poverty line, there
are around 260 million people below the national poverty line.
These are extremely large numbers and I think a development agency
that did not pay some attention to those large numbers would be
remiss. We also look, besides the criteria of population and need,
at the policy environment. Is this a country where we think aid
can be well used and, if we direct aid towards this country, will
it actually deliver outcomes? Will it deliver poverty reduction?
If we look at the overall policy environment in India, we have
to say that, yes, there are significant opportunities for donor
assistance to be used to reduce poverty. So, by all of the criteria
we would normally use, India is under-aided by DFID and by the
donor community in general. It is a country where, in principle,
we believe more aid could be well used and well absorbed. However,
we have to recognise also that, as a large country and a country
that aspires to be a self-reliant international player and a country
that has significant resources of its own, perhaps that theoretical
position that India is under-aided needs to be adjusted somewhat.
The previous government had expressed very clearly its desire
to graduate from being an aid recipient and indeed its interest
in becoming a donor in its own right. We have not yet had discussions
with the new government and we do not know whether they share
those views on India as an aid recipient and India as a potential
donor. The answer to the question, should we switch aid to other
parts where there is greater need or more depth of poverty, is
that I do not think so. I think that, if anything, we should be
giving more aid to India if we can identify suitable opportunities
for it to be well used, but perhaps Jeremy would like to add a
word from the regional perspective on this question.
Mr Clarke: I do not think I can
add too much to that. I think the aid allocation model that we
use does in fact include the criteria that Charlotte has set out.
It also includes a cap on population, a sort of factor for adjustment
that we include in the calculations which in effect limits the
amount of aid that we provide to India and ensures a distribution
to other poorer countries and across the regions to Africa.
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