India (Hansard, 13 February 1978)

§ 44. Mr. Whitehead
asked the Minister for Overseas Development how much will be left in the ODM aid programme for India after the supply of the British-built ships.

§ Mrs. Hart
The ships project in 1977–78 would represent under one-fifth of the aid available to India this year, about £25 million out of £140 million. The balance of a further £25 million is likely to be equally divided between 1978–79 and 1979–80 and would therefore represent a much lower proportion of aid available in those years.

§ Mr. Whitehead
Is the Minister aware that those of us who have been in India recently will be glad to hear that so small a proportion is involved because we have heard of the intense irritation felt by the Indians at having to buy ships that they do not want at a price that they think is too high? Is it not far better, in the case of the Indian sub-continent in particular, for aid programmes to be used to fund the rural infrastructure and for education projects on a small scale? Does my right hon. Friend accept the conclusions of the Jolly Report in this respect?

§ Mrs. Hart
It would be infinitely better if the British and Indian Governments could successfully identify projects which could be devoted more to the rural sector. I have every hope that this will happen. Following my discussions earlier this year, I hope that we shall be able to 27 identify large-scale projects dealing, for example, with fertiliser plants, mobile health clinics and power plants to make possible the irrigation of rural areas. This is our intention. I do not entirely agree with my hon. Friend the Member for Derby, North (Mr. Whitehead). I think that it depends upon which people in India he talked to.

§ Mr. Adley
Is the principle under which the Minister acts that we shall provide this aid because if we do not someone else will? Will she follow that principle in other cases—for example, in the case of arms for Chile?

§ Mrs. Hart
We regard the aid programme to India as our most important bilateral project because India is the largest and poorest country. We want to be able to maintain the level of our aid to India. We concluded the arrangement for ships at a time when we hoped to identify for future years projects that were more keenly geared to rural development policy.

§ Mr. Luce
As it is clear from the 1975 White Paper that the Government's policy is to concentrate aid programmes on needy and less developed countries and on the poorer people, surely it is a misuse of our bilateral aid programme to India to spend so much of that money on subsidising the construction of ships to sell to India when we should be helping those who are really in need. Does not that contradict the Government's aid programme?

§ Mrs. Hart
I must correct the hon. Member's impression. The aid is not being used to subsidise the ships. There will be a tiny element of the shipbuilding intervention fund for that. The Indians need ships. They are a gift which comes out of the aid programme.
We are moving towards a situation which needs more careful thought than hon. Members have given to this matter. India is the classic example of there being two different elements in a country There is an India which has a high technical ability, and there is an India which still comprises the rural poor. We must try to get our aid to the rural poor. We do this by assisting India with her foreign exchange and balance of payments. We are helping India to devote her money 28 to purposes with which we thoroughly agree.