Ahead of Cameron visit, BMEC ‘co-funding’ out of statement

Following Britain's decision to stop aid to India, the two countries may not share funding for a feasibility study on the Bangalore-Mumbai Economic Corridor (BMEC) project.

The ministry's Department of Economic Affairs told the Ministry of External Affairs (MEA) to change the joint statement to be signed during Prime Minister David Cameron's visit, beginning Monday, that made a reference to co-funding in the project.

It asked the MEA to remove the line "both governments agreed to co-fund a feasibility study for this project and to work together to develop and deliver it" in paragraph 9 of the joint statement and replace it with "and agreed that this (BMEC) should be further examined at the official level by both sides".

The Department of Economic Affairs contended that as the UK had discontinued financial aid to India for new projects under the government sector, "there was no value addition in getting a feasibility study conducted by the UK as it would not be followed up by financial assistance".

The objection, approved by Finance Minister P Chidambaram, was also sent to the Prime Minister's Office and the Department of Industrial Policy and Promotion.

Cameron is on his second visit to India since becoming prime minister in May 2010. He begins his three-day visit in Mumbai on Monday and will meet PM Manmohan Singh for talks Tuesday.

In November 2012, Britain's International Development Secretary Justine Greening had announced that Britain would cancel the £280 million a year aid programme to India from 2015 while cutting around £200 million off the budget before 2015 in recognition of the subcontinent's "changing place in the world". After 2015, the UK will instead focus on "technical cooperation" and private sector investment to assist some of the poorest parts of India.

The British government had been criticised for giving aid to a country growing at 8 per cent a year, spending vast sums on defence, and running a massive overseas aid programme.

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