International Development (India)

Virendra Sharma Excerpts

Thursday 26th January 2012 Westminster Hall

[Malcolm Bruce (Gordon) (LD)]

It is good to initiate this debate under your chairmanship, Mr Davies, and to have the opportunity to debate the United Kingdom’s important relationship with India across a range of areas, of which development is just one key facet.

I am pleased to see one current and one former Select Committee member present. Our Committee decided to undertake a review of the UK development relationship with India against a background of critics of aid—those who either do not believe in it at all or want it cut—homing in on the India dimension as a target for demonstrating that, somehow, it was not justified. Those critics used various arguments saying that, for example, “India is a middle-income country”, “India has significant economic growth”, “India has more billionaires than the UK” and “India has a space programme”. Those are true facts, but they need to be qualified. I hope and believe that the Committee dealt with these issues constructively.

The range of income for middle-income countries is from a little more than $1,000 to $13,000. India is right at the bottom end of that spectrum and in reality Britons are 20 times richer than Indians or, put the other way round, Indians are 20 times poorer than Britons.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

The right hon. Gentleman may agree that although India is middle-income—quite high and rising every day—at the same time it still has as many people below the poverty line as the whole of Africa. Poverty is also a major factor.

[Malcolm Bruce]

The Committee addressed that argument head-on. It is worth putting on record that the implication of their criticism is that some critics resent the fact that India has billionaires, success and growth. That is what we hope development will bring; that is the whole idea of promoting development. In reality, the UK has partnered India in a constructive way throughout a lot of different dimensions.

It is worth dwelling on the question of space for a minute. India’s supposedly extravagant space programme has absorbed $6 billion in total over 50 years, which has been used mostly to give India the capacity to launch its own satellites. A country that is a subcontinent in itself, with a border dispute with China and in Kashmir, a Maoist uprising over many years in Nepal, a civil war in Sri Lanka and problems across the region, has every reason to want information to protect its own national interest. Indeed, there are many socio-economic benefits, such as being able to monitor the path of monsoons and the impact of development. One Minister said, “If somebody comes to me and says that we have completed a school in X or Y, I can check whether that school has been built without leaving my office, because we have the benefit of these things.” That is perfectly legitimate, proper and proportionate. Developing countries should not be denied aspirations because they have to deal with poverty.

More to the point, it is a fact that in spite of this success India faces substantial challenges in terms of poverty reduction. As the hon. Member for Ealing, Southall (Mr Sharma), a former Committee member, said, there are still 350 million people in India living on less than $2 a day, which is more people in that degree of poverty than in the whole of sub-Saharan Africa.

The focus of the UK’s development programme across the piece is poverty reduction and achievement of the millennium development goals. India needs to be able to deal with those issues in spades, in a sense. It is off-track on MDG 1 on reduction of poverty and on MDG 4 on infant mortality, and badly off-track on MDG 5 on maternal mortality. In these circumstances it is, in the Committee’s view, right and proper that we determine whether the UK’s development assistance can help resolve those issues.

The Department for International Development’s operation report, drawn up since we completed our report, makes it clear that the UK regards development as part of its strategic relationship with India. We should acknowledge that we have a shared history with India, which is contentious but is a fact that has engaged both our countries for several hundred years and, if one parks the fact that they have not all been good and that there have been mistakes and memories that we would rather not have to recall, it is also true that we have achieved a depth of understanding in that relationship about culture, a common language, the same sense of humour and a shared interest in cricket.

There is a natural affinity between the two countries, which is borne out by the scale of the diaspora in the UK and the scale of trade and investment. It is interesting to note that investment between India and the UK is greater than between India and the rest of the European Union put together. These significant, positive benefits reinforce the case made by many hon. Members, who believe that the purpose of development is to deliver poverty reduction and the MDGs and, in the long term, also to create viable states that can develop economically and can and will become development, trade and investment partners. That is precisely what is happening between the UK and India.

In the press release accompanying the publication of the report, which focused on the key issue—I do not often quote myself—I said:

“The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this.”

The other issue that critics raise is that India has a responsibility, as its income rises and economic performance improves, to deliver its own poverty reduction. That is true. The fact is that India is doing a huge amount to achieve that. The transfer of wealth from the rich to the poor and the programmes on health, education and work, which are raising people out of poverty, cost tens of billions of dollars and are funded by internal resources managed through the Indian Government. By comparison, the £230 million a year of UK aid is a small amount. Is it so small that it does not matter? We concluded that, qualitatively, that aid was able to help Indian authorities and agencies achieve a faster reduction in poverty and an aspiration to deliver off-track MDGs faster than would otherwise be so and that it was, therefore, beneficial. That is also the view of the Indian Government, which is why they welcome the UK as a partner. It is clear that in these circumstances the relationship is right and proper and should continue.

We looked at DFID’s priorities to try to assess whether we believe that it matched the needs as the evidence presented to us suggested. We found, first, from objective evidence, that India is an unequal society—tackling that inequality is clearly a challenge and a responsibility for Indian politicians and Ministers—and that the contrast between the richest and poorest states is huge. Some of the poorest states in India are poorer than some of the poorest states in Africa. In that context, DFID had identified that it would concentrate a high proportion of the development in four of the poorest states in India: Bihar, which the Committee visited, Madhya Pradesh, which the Committee also visited, Orissa and West Bengal, which has changed its name to one that I cannot now recall. Those are the poorest states, where a relationship has already been established and where there is evidence that DFID’s engagement can accelerate the action to meet the challenge of reducing poverty.

One thing that shocked the Committee, although perhaps those of us who know India well should not be so shocked, was the appalling state of sanitation across large parts of India and, indeed, the acceptance of the appalling state of sanitation. Committee members were genuinely shocked by the figures: 500 million or 600 million people are practising open defecation every day, without any access to the basics of hygiene. That is one of the most fundamental problems that India has to face and one of the reasons why it is off-track on some MDGs.