Starting Today, Jan 1, The UK Has Stopped Financial Aid to India

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10:40 am 1 Jan, 2016

The UK has decided to stop giving financial aid to India from January 1, 2016, in keeping with a decision taken by the British government in 2012.

However, the UK will keep on giving technical assistance to India this year.

The move comes after a lot of people in the UK urged the government to end financial assistance to India citing the Asian country’s growing economic strength and status.


British Pound (buzzsouthafrica)

UK’s support for India has not gone well among Conservative MPs, many of whom believed that the UK should not be giving money to a country which has a multi-million pound space programme.

Following the decision by British Parliament, the existing financial grant projects were completed in the next three years and funds that had not been utilised were moved into technical assistance projects.

British Prime Minister David Cameron in Parliament(

While those who are against giving aid cite India’s ‘robust space and defence programs,’ and those in its favour talk of the extreme poverty that remains in India’s rural areas.

Indian economy is poised to grow in the range of 7.5 per cent in 2016 as it along with China will become the two best-performing nations in the world, World Bank Chief Economist and former Economic Advisor to India Kaushik Basu has observed. India’s economic growth accelerated to 7.4 per cent in the July-September quarter, overtaking China as the world’s fastest growing major economy, on pick up in manufacturing, mining and services sectors.



In 2012, the then finance minister Pranab Mukherjee had reportedly said that British aid was “a peanut” and India could do without the funds.

The UK, as per the Indian government, had offered financial assistance for its developmental programmes during 2013-2015. It provided Rs 855.01 cr, Rs 601.77 cr and 190.06 cr for the fiscal years 2013-14, 2014-15 and 2015-16 respectively.

UK Government’s Department for International Development (DFID), which works in partnership with developing countries to promote development and end extreme poverty, is giving financial assistance to 26 government sector projects operational in MP, Odisha, West Bengal and Bihar. These projects cover areas such as health, education, governance and urban reforms sectors.



British media had reported that the spending by UK development arm has risen to £279 million in 2014 from £268 million in the previous year, despite its decision to stop aid to India.

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