A New Framework

India is one of the largest and fastest growing economies in the world. It is a key player in the G-20, BRICS and other global formations.

Written by John Samuel , Abraham George | Updated: October 11, 2016 6:07 am
Brics summit Goa, IBSA, G20 summit, India economy, G20, South South cooperation, news, latest news, India news, national news, editorial, BRICS bank, Since the turn of the present century, a drastic shift has taken place in India’s development cooperation activities. From a predominantly aid-receiving country, India has transformed itself to a donor to other developing countries.

As India prepares to host the BRICS Summit in Goa this weekend, its role as a key leader in international relations and South-South cooperation will be in the spotlight. India is one of the largest and fastest growing economies in the world. It is a key player in the G-20, BRICS and other global formations. The upcoming BRICS summit has acquired a new significance not only in terms of the new initiatives like the BRICS bank, but also in relation to the future of development cooperation of India in the context of its responsibility as an emerging leader of the global South.

Since the turn of the present century, a drastic shift has taken place in India’s development cooperation activities. From a predominantly aid-receiving country, India has transformed itself to a donor to other developing countries. A high-growth economy and the accumulation of huge foreign exchange reserves have provided India the flexibility and confidence to stop accepting aid from most countries. Although India continues to be an aid receiving country, the share of grants (as against loans) in the overall assistance has drastically declined. For instance, the share of grants was just seven per cent in the total assistance India received ($8,287 million) in 2010-11 compared to 19 per cent in 1981-82.

India’s development cooperation framework has changed significantly since 2003. For the last 10 years, it has increased the allocation for international development cooperation every year. The development cooperation framework is based on grants, technical training and capacity development and lines of credit involving soft loans. In the last six years, India has allocated almost $7 billion for development assistance and since 2011, there has been an average increase of 32 per cent in the allocation for development assistance. While the largest recipient of development assistance are countries in South Asia, India has recently increased the development assistance and lines of credit to African countries as well.

In the emerging narrative of BRICS, G-20 and South-South development cooperation, we need to locate India’s role and relevance. It must develop a vision based on sustainable development goals. India’s development assistance has been more demand-driven, with relatively less emphasis on aid-conditionality. However, many scholars and civic leaders point to the need to focus on development effectiveness in recipient countries and more transparency and accountability in terms of the exact volume and impact of the assistance. This requires a major shift in the way development cooperation is conceptualised, managed and evaluated. A larger ethical perspective of shared responsibility requires all countries to eradicate poverty, injustice and violence. For that, resource-rich countries need to share a part of their resources. Countries like India could draw lessons from their own development experience and offer solutions more appropriate to the requirements of other developing countries through the BRICS/IBSA (India, Brazil, South Africa) platforms.

India needs to revamp its development cooperation programme in order to enhance aid-effectiveness. In 2007, the government had proposed a specialised agency for India’s development cooperation. The promise is yet to be fulfilled. Presently, India’s development cooperation is coordinated by Department of Development Partnership within the external affairs ministry. The time has come for India to rise to international expectations and establish a specialised agency such as India International Development Agency with a minister in charge. This will ensure greater aid effectiveness and bring about greater clout and visibility to India’s development cooperation initiatives.

The writers are policy researchers at the Institute for Sustainable Development and Governance (ISDG), Thiruvananthapuram

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