Seeking an "early exit strategy" from the India development aid programme, a committee of the British House of Lords on Thursday alleged that the assistance may provide a "perverse incentive" to the Indian government to use less of its own funds to cut poverty.
The issue of sending aid to an increasingly prosperous India provoked public fury in February amidst deep funding cuts, job losses and worse in Britain.
The David Cameron government has since insisted that the aid would continue for now.
The Lords Economic Affairs Committee said in its report on the economic impact and effectiveness of development aid, "British development aid to the poorest Indian states may provide a perverse incentive to the Indian government to use less of its own revenue to alleviate poverty."
Stating that "India's impressive economic growth and technological attainments, and its own aid programme, coexist with widespread, extreme poverty," it said, "We recommend that the Secretary of State should urgently prepare an early exit strategy from the India development aid programme."
Andrew Mitchell, International Development Secretary, responding to the committee's report, reiterated Britain's commitment to the global poor, saying that the government made "no apologies" for the aid.
He said, "The British government makes no apologies for sticking to its commitments to the world's poorest people. Spending less than 1 per cent of our national income on aid -- an internationally agreed target -- will create a safer and more prosperous world for the UK."
"And it will get 11 million children into school, vaccinate 55 million children against preventable diseases and stop 250,000 newborn babies dying needlessly. Going back on
this promise would cost lives," Mitchell said.
Britain currently gives 280 million pounds annually to India, totalling 1.4 billion pounds between now and 2015.
The committee's chairman, Conservative Lord MacGregor of Pulham Market, said the peers "wholeheartedly" backed humanitarian aid, but were unanimous in their view that legislation for a 0.7 per cent target for overall aid spending was inappropriate.
He said, "The government should reconsider the target itself. We believe that development aid should be judged by the criteria of effectiveness and value for money, not by whether a specific arbitrary spending target is reached."
The overall target of spending 0.7 per cent of gross national income was adopted by donor nations -- including the UK -- at the United Nations, in 1970, but few have reached it.