'We Don't Want Your Aid', India Tells UK; 'No Aid Even If India Comes Begging', Retorts British MP

Responding to remarks made by India's finance minister snubbing financial aid from the UK, a British MP said that it would be unacceptable to give India any aid even if they were begging us for it.

India's finance minister Pranab Mukherjee had said that his country doesn't require British aid, describing it as peanuts. The remark sparked a heated controversy in the UK.

We do not require the aid, Mukherjee said, during question time in the Rajya Sabha, the upper house of Indian parliament, according to the official transcript. It is a peanut in our total development exercises (expenditure), he said adding that the Indian government wanted to voluntarily give it up.

India, the world's top recipient of British foreign aid, tried to terminate the aid last year, but relented after Britain begged them to keep receiving the millions, reported the Telegraph.

India decided to give up the aid last year, following a 2010 proposal made by the country's then foreign secretary Nirupama Rao, which was leaked recently. Rao had proposed not to avail any further DFID (Britain's Department for International Development) assistance with effect from April 1, 2011, because of the negative publicity of Indian poverty promoted by DFID.

However, British officials told Indian authorities that cancelling the financial assistance would cause grave political embarrassment to the UK since British ministers had spent political capital justifying the aid, to the public, the Telegraph reported quoting sources in New Delhi.

British Prime Minister David Cameron is under immense pressure to terminate the financial aid to India following the humiliating statement from an Indian minister supported by a leaked memo.

Britain has sent more than £1 billion to India over the last five years and had plans to spend another £600 million on Indian aid by 2015.

Tory MP Philip Davies has demanded termination of the Indian aid program immediately, according to a Daily Mail report.

India spends tens of billions on defense and hundreds of millions a year on a space program - in those circumstances it would be unacceptable to give them aid even if they were begging us for it, Davies said. Given that they don't even want it, it would be even more extraordinary if it were to be allowed to continue. There will be millions of hard-pressed families wondering why on earth the government is wasting money in this way, he added.

India's economy has been growing at the rate of up to 10 percent a year, and is projected to become bigger than Britain's within a decade.

The fact is that India's economy is growing much faster than our own. We should be encouraging free trade with them and trying to learn from them rather than handing out patronizing lectures, Daily Mail quoted Tory MP Douglas Carswell as saying. This is concrete proof that Britain's aid program is run in the interests of Whitehall officials and the DFID machine, he added.

The MPs said that India, which executes its own foreign aid program, is more than capable of managing their budget and that the booming nation doesn't need the help of Britain's vanity project.

Critics of the British aid in India have said that a huge chunk of the aid is lost in corruption and bureaucracy.

Earlier, India had sidestepped British industry to award a £13-billion contract to supply fighter jets, to France following which French President Nicolas Sarkozy said Britain has no industry. India entered into the warplane deal with France despite Britain's International Development Secretary Andrew Mitchell saying in December that the continued aid program was designed to win the fighter jet deal.

India has been receiving around £280 million a year from Britain, six times the amount given by the second-largest bilateral donor, the U.S.