आर्थिक कार्य विभाग DEPARTMENT OF Economic Affairs

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Canadian Bilateral Economic Assistance to India

Department of Economic Affairs : ADMINISTRATION & BILATERAL COOPERATION DIVISION : CANADIAN BILATERAL ECONOMIC ASSISTANCE TO INDIA

I. Background

Canadian Bilateral Economic Assistance to India started in 1951. Till October 2003, the total assistance to India has been around C $ 3 billion. The assistance mainly comprises development assistance, agricultural commodities and technical assistance. Canadian assistance is channelised through the Canadian International Development Agency (CIDA). The assistance extended by CIDA since 1st April, 1986 is in the form of grant.

II. Nature of Assistance

The present Canadian assistance comes in the form of grants and is available for implementing projects.

The CIDA assistance is of three types:

  1. Projects with MOUs with GOI (6 on-going projects);
  2. Projects without MOUs with GOI; and
  3. Projects under special funding mechanism without MOUs with GOI

The assistance is extended mostly in the form of technical assistance and the assistance through the receipt budget of the Govt. of India is quite negligible. Canada is also assisting NGOs outside the bilateral programme.

III. Priority sectors

Canadian bilateral assistance, which used to be project assistance for meeting the import/local cost requirements of specific project and non-project assistance for purchase of miscellaneous goods, industrial commodities, fertilizers and agricultural commodity assistance was given new orientation under the CIDA's country policy framework for India established in the year 1991.

The emphasis of Canadian assistance has now shifted to softer aspects, such as linkages development, economic policy support (including business and private sector development), social equity and environment. The underlying principles of the new policy framework are collaboration and partnership.

The three main objectives of CIDA's country policy programme for India are:

  • To promote economic and social policy reforms in India .
  • To contribute to India 's capacity to promote environmentally sound development.
  • To assist in building a stronger economic relationship between private sectors of both the Countries.

CIDA's programming focus is on projects of humanitarian nature, which emphasize poverty reduction, gender equity, environment, human rights and child labour.

IV. Utilisation of Canadian assistance

Utilization of Canadian bilateral assistance during 2002-03 was C $ 27.54 million.

V. Recent Developments

In the Budget announcement on external aid, GOI announced to stop taking bilateral assistance from number of countries including Canada . As a result, in October 2003 CIDA notified to phase out their current bilateral assistance programme by 2007. GOI has prepaid the entire Canadian Loan of CAD 419.941 million, against the loans taken by GOI during 1966-84, in October 2003.

The Government of India has further reviewed the policy on bilateral development cooperation to affirm the liberalization and reform orientation in India ’s economic policy. Accordingly, bilateral development assistance will be accepted from all G-8 countries including Canada , as well as European Commission. A simplified policy to facilitate the flow of bilateral assistance to non-governmental organizations and autonomous institutions has been announced separately.

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