Economic crisis: US aid to India drops

Nov 12 2012, 12:08 IST
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US aid to India has dropped by over 25 pct US aid to India has dropped by over 25 pct
SummaryUS aid to India dropped 25% since 2010, as country is going through a grave crisis.

The US aid to India has dropped by over 25 per cent since 2010, as the country goes through a grave economic crisis but the Obama Administration has adopted a new model of assistance to focus on poverty alleviation and addressing security challenges like terrorism.

From a total assistance of USD 126.7 million in 2010, the proposed US aid to India for the year 2013 has dropped to USD 98.3 million. It stood at USD 121.6 million in 2011 and USD 108 million in 2012.

State Department spokesperson, Victoria Nuland, told reporters that there is no plan for the US change its assistance to India.

"I don't see Ņ I don't have any change in our India assistance to announce today, but obviously in every budget cycle, we look at all the priorities across the planet, and we have to make tough decisions in consultations with those governments in terms of what's effective," Nuland told reporters in response to a question on the British decision to end its aid to India by 2015.

In its last budgetary proposals to the Congress early this year, the State Department had said that the US has begun a transition to a new strategic assistance relationship with India, from one of donor-recipient to a true partnership, where both sides have something to offer.

"The United States is increasingly looking to India as a source of development innovations that can provide effective and sustainable solutions that address not only the needs of India's poor but also have the potential to improve the lives of those living in poverty globally," the State Department said in its Congressional Budget Justification report for the year 2013.

Noting that India's dramatic growth has lifted millions out of poverty, it said much of this growth can be attributed to India's leadership and experience in developing products, processes, and service delivery models that benefit vulnerable populations, thus giving justification for reduction in US assistance to India.

But the aid will not end in the near future, it indicated.

In fiscal year 2013, the US will work with the Government of India, private sector, and civil society to identify, pilot, and scale up cost-effective innovations and best practices in development in India with the potential for global impact, it said.

"The India platform could serve as a new model for other emerging middle-income countries with significant pockets of poverty.

"India also faces both internal and external security challenges, and US assistance continues to support its critical role as a leader in maintaining regional stability," the State Department said in its report to the Congress.

It said in the year 2013, the US will deepen cooperation on counterterrorism issues with both capacity building activities and policy dialogues.

According to the State Department, USAID and India is currently developing its new five-year strategy.

With India as a development innovation lab, USAID and its partners will identify, pilot, and scale cost-effective innovations and practices with potential for global impact.

In recognition of India's unique position as an emerging global power, the US Government will collaborate with the public and private sectors to support transformational agricultural innovations like pest-resistant seed production higher yield crops, and innovations in harvesting and food distribution networks, the State Department said.

The US will also use its developmental assistance to support innovations in literacy and to improve the quality of basic education in India.

"The United States will continue to strengthen basic education in India and will support innovations in early grade reading," it said.

Noting that India has successfully attained 96 per cent enrollment in the primary grades, the State Department said, the quality of education however lags, with 52 per cent of students in grade five not reading at a second grade level.

USAID will work with public and private partners in India to catalyse innovations in early grade reading that address not only India's challenges, but can also be applied globally.

Observing that India has been the victim of attacks by international terrorist groups that are also hostile toward the US, the State Department told the Congress that strengthening India's strategic trade control systems and building greater Indian conventional military capacity will create a stronger partner to address regional and global challenges.

Further, the Department of State programs will improve India's capabilities to counter terrorism, address terrorism financing, and prevent the proliferation of weapons of mass destruction (WMD).

Counterterrorism training programmes will build mutual trust, transparency, and credibility in order to find new ways to curb threats, prevent attacks, block funding sources, and bring terrorists to justice by partnering with Indian law-enforcement agencies.

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