Danish Development Cooperation with India - in a Poverty Reduction Perspective

Danish Development Cooperation with India - in a Poverty Reduction Perspective

The paper gives an overview of Denmark's official development cooperation with India, viewed from a poverty reduction perspective. It is one of the products of a research project, entitled 'Comparative Study of European Aid for Poverty Reduction in India', carried out in 1997 by a group of four European and eleven Indian researchers. The paper deals with the evolution and composition of Danida's programme in India in the context of the donor strategy and assesses the project portfolio in terms of relevance for poverty reduction. Moreover, it reviews the donor-recipient dialogue and programme management and discusses selected issues such as donor coordination, institutional aspects of poverty reduction, targeting, ownership and the involvement of NGOs. Through the 1970s and 1980s Danida's assistance to India was split into two parts, one half tied to procurement in Denmark and directed mainly towards the modern sector, and the other half financing projects, most of which had a distinct poverty orientation. A new country strategy adopted in 1997 underlines poverty reduction as the primary goal for the entire Dani da-supported programme (except a small private sector programme and Danish firms' activities financed by mixed credits or the Industrialisation Fund for Developing Countries). Roughly two-thirds of the Danish programme (under the country frame) is relevant for poverty reduction in a broad sense, the remaining third more linked to business interests. This compares favourably with most other donors, and in the future the poverty orientation will be considerably strengthened according to the new country strategy. However, there is an uncertain relationship between some of the planned interventions and the primary objective of poverty reduction. The effectiveness in terms of poverty reduction can be improved through better targeting. [author]

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