Foreign aid to India: what does it finance?
By: Jha, Shikha.
Contributor(s): Swaroop, Vinaya.
Material type:
ArticlePublisher: 1999Description: p.1142-146.Subject(s): Foreign aid - India | Foreign aid
In:
Economic and Political WeeklySummary: This article shows that foreign aid to India merely substitutes for spending that the government would have undertaken anyway; the funds freed by earmarked aid are spent elsewhere. Moreover, in passing external assistance earmarked for the states, the central government makes a reduction in transfers it would have otherwise made to the states. From the country's perspective these fungibility results could be good; domestic spending priorities - inter-sectoral and inter-regional - are unaffected by foreign aid. For the donors, however, the results indicate that success of their projects, as measured by the conventional benefit-cost analysis, does not tell the whole story; the marginal use of their money and its overall development impact could be different from that intended. - Reproduced
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Articles
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Indian Institute of Public Administration | Volume no: 34, Issue no: 19 | Available | AR41167 |
This article shows that foreign aid to India merely substitutes for spending that the government would have undertaken anyway; the funds freed by earmarked aid are spent elsewhere. Moreover, in passing external assistance earmarked for the states, the central government makes a reduction in transfers it would have otherwise made to the states. From the country's perspective these fungibility results could be good; domestic spending priorities - inter-sectoral and inter-regional - are unaffected by foreign aid. For the donors, however, the results indicate that success of their projects, as measured by the conventional benefit-cost analysis, does not tell the whole story; the marginal use of their money and its overall development impact could be different from that intended. - Reproduced
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