On Wednesday, India turned down the UAE’s reported offer of Rs 700 crore as aid for flood relief in Kerala. While this came despite a 2016 National Disaster Management Plan (NDMP) that provides for accepting foreign assistance, the NDMP is different from the policy followed by New Delhi since December 2004, soon after the tsunami.
The NDMP, finalised in May 2016, says, “The Government of India does not issue any appeal for foreign assistance in the wake of a disaster. However, if the national government of another country voluntarily offers assistance as a goodwill gesture in solidarity with the disaster victims, the Central Government may accept the offer.” It says the Home Ministry is required to coordinate with the External Affairs Ministry, primarily responsible for reviewing foreign offers of assistance and channelising these.
While the 2016 guidelines have been mostly on paper, the government has been following the policy on disaster aid decided in 2004, when then PM Manmohan Singh said, “We feel that we can cope with the situation on our own and we will take their help if needed.” Since then, New Delhi has decided to follow a policy of not accepting aid from foreign governments.
How policy began
Prime Minister Singh was taking forward the NDA-I government’s broader policy on foreign aid. The idea that India had become a large economy, and that accepting small aid moneys from countries was not in keeping with the times, had taken root during Atal Bihari Vajpayee’s first full term in office as Prime Minister.
Jaswant Singh, who was External Affairs Minister for three years, held a worldview that aid from the rich to the poor in a globalising world had become irrelevant. Within his first six months as Finance Minister after taking over in mid-2002, he was determined to send a symbolic signal to end India’s dependence on concessional debt.
India had already graduated to become a “less indebted country” in the IMF ranking. There were some doubts whether such a move would be perceived as a rude gesture in diplomatic circles. Besides, the External Affairs Ministry was miffed since its explicit concurrence was not sought — it had to deal with countries bilaterally, and manage the fallout of an abrupt change in aid receiving policy. Nevertheless, a political call was taken riding on strong macroeconomic fundamentals. India had registered a surplus in its current account in 2001-02 and its foreign exchange reserves had topped $75 billion by February 2003.
Jaswant Singh proposed to actually pre-pay $10 billion of India’s external loans. Since 1956, India had severe foreign exchange constraints, but 2003-04 was a different year, and the Finance Minister was preparing the ground for the ‘India Shining’ campaign for the 2004 Lok Sabha elections.
In his last Budget speech in 2003-04, he said it was time to review India’s dependence on external donors. The government not only pre-paid a part of its external debt but also decided to provide debt relief to highly indebted poor countries that owed India substantial sums. In his speech, Singh announced that India would ask its bilateral partners that provided small assistance packages to route it through non-governmental organisations. He did not abruptly stop funding for agreed programmes, saying they would be allowed to complete their due course.
In May 2005, in reply to a Parliament question, then MoS (Home) S Regupathy said, “Government has decided to negotiate external assistance from multi-donor agencies viz World Bank, ADB and UN agencies for long term rehabilitation and reconstruction for mainland States/UT of Andhra Pradesh, Kerala, Tamil Nadu and Pondicherry. Bilateral assistance could also be accepted if routed through the multi-donor agencies. The negotiations for US $465 million for Tamil Nadu and Pondicherry have been completed with the World Bank and assistance of US $200 million has been approved by the ADB for Kerala and Tamil Nadu. The shortfall, if any, after final negotiations with the multi-donor agencies, will be met from internal resources.”
Before & after 2004
After the tsunami, the government might have felt that India had the capacity to handle disasters like these. “And secondly, accepting from any one government opens the floodgates for others as well, and it would be diplomatically difficult to refuse from some while accepting from others,” an official said. However, this policy is limited to foreign governments and does not extend to individuals and charity organisations.
Until then, India had accepted aid from foreign governments — for the Uttarkashi earthquake (1991), Latur earthquake (1993), Gujarat earthquake (2001), Bengal cyclone (2002) and Bihar floods (July 2004). In the last 14 years, it has refused aid from Russia, the US and Japan for the Uttarakhand floods in 2013, the Kashmir earthquake in 2005 and Kashmir floods in 2014.
Clarifying the grounds for refusal of foreign aid for Kerala floods, External Affairs Ministry spokesperson Raveesh Kumar said, “In line with the existing policy, the Government is committed to meeting the requirements for relief and rehabilitation through domestic efforts.” Maldives, Qatar and Thailand, besides the UAE, have offered monetary support for relief operations in Kerala.
For multilateral assistance, the 2016 NDMP guidelines say, “An offer of assistance from UN agencies, India will accept the offer only if the government considers it necessary, based on various factors. If accepted, GoI will issue directions to the respective Ministry or State Government to coordinate with the concerned UN agency. Any financial assistance offered by UN financial institutions involving foreign exchange will require the approval of the Department of Economic Affairs. India will allow UN agencies and international NGOs already operating in the country at the time of the disaster event to continue their humanitarian assistance to people in the affected area in coordination with the relevant Central Ministries/Departments and the State Government as per applicable norms and protocols.”