The Hindu Business Line : Ministry keen to create agency for providing development aid

New Delhi, Dec. 30 The Ministry of External Affairs (MEA) is actively pursuing a proposal to create an India International Development Cooperation Agency (IIDCA) to spearhead and leverage India’s growing economic clout to reach out to other developing countries through development cooperation.

Official sources told Business Line that the proposed agency, administratively under MEA’s ambit, would have policy guidelines formulated jointly with the ministries of Finance and Commerce. The broad functions include evolving a coherent development cooperation policy framework; implementing most of Indian development cooperation measures, including disaster relief and humanitarian assistance, in a prompt and efficient way along with an apt monitoring mechanism; and developing simplified procedures, particularly financial norms and mechanisms.

The sources pointed out that though India is traditionally a major Official Development Assistance (ODA)-recipient country, it also extends significant sums of development cooperation in consonance with the spirit of economic cooperation among developing counties (ECDC) and Technical Cooperation among Developing Countries (TCDC). The assistance is extended by way of lines of credit (LoCs), technical cooperation comprising training and deputation of experts, development projects, consultancy support and disaster relief and humanitarian assistance.

While the lion’s share of MEA’s aid budget flows to neighbouring nations, India’s LoCs budget is indicatively around Rs 4,000 crore per annum for the period 2006-07 to 2009-10, the sources said adding that the actual disbursements, going by past trends, might be considerably less than this.

Need for efficient delivery

The sources said that while pitching for the creation of the IIDCA, the authorities conceded there was need for significant and progressive augmentation of assistance. They also deplored the country’s cooperation delivery as “unacceptably tardy”, which substantially erodes the goodwill potential, and aid is also generally not delivered in an optimally efficient or cost-effective manner. They cited the case of a project in Maldives that was publicly accepted at the Head of State level way back in 1985 and was now being implemented.

Such delays would be costly, as it is imperative to ensure prompt and swift delivery of disaster/humanitarian aid. Instances abound where India’s aid delivery was delayed by more than a year after the calamity had struck. This was similar for lines of credit which remained unutilised/underutilised.

The sources said that with India emerging as an economic power and with significantly higher expectations from and obligations upon India, a much expanded development cooperation programme needs to be in place.

When contacted about the proposed agency, the Minister of State for Commerce, Mr Jairam Ramesh, said he welcomes this initiative as it would help in projecting India’s image and capacity in a better manner abroad. The sources said focus areas would cover IT, telecom, education, healthcare, new and renewable sources of energy, agriculture, small and medium enterprises, rural development/poverty alleviation and entrepreneurship development and parliamentary practices.