Chapter 2

Australian Development Assistance to India

2.1 Australian Development assistance to India started in the year 1951. The aid, on grant basis, was earlier concentrated in agriculture and allied sectors. The Australian Aid Programme was extensive during the 50s and 60s. During the 70s it varied with the amount of food aid given. Assistance to India under bilateral aid programme was minimal during the early 80s and was deleted altogether in 1986.

2.2 A new initiative in Indo-Australian bilateral relations was taken in February 1989, when a Memorandum of Understanding was signed for providing concessional loans to finance development projects in India. The objectives of the MoU are to:

(a) ensure effective procedure for funding projects which have been agreed as important in India’s development programme: and

(b) facilitate the use of Australian goods and services for the developmental purpose through concessional finance packages.

2.3 As per the MoU, the Ministry of Finance(DEA) and Australian International Development Assistance Bureau(AIDAB), now AusAID, are to meet at least once a year to discuss and allocate priorities amongst projects and to review the Memorandum and the funds provided by it.

2.4 In October, 1990, two agreements on bi-lateral co-operation were signed with the Australian Government. These were (i) Agreements on Development Co-operation and (ii) MoU relating to the Small Activity Scheme. Australian aid to India is extended under the aegis of the above agreements.

2.5 Australian assistance covers the following sectors : (i) Railways , (ii) Telecommunications, (iii)Energy, (iv) Mining, (v) Coal, (vi) Food Processing, (vii)Environment, (viii)Health and (ix) Transport. The Small Activity Scheme extends to social sectors also. Under this programme, funds are extended to the NGOs as well.

2.6 Aus AID have committed an estimated total Aid flow to the tune of AUS $ 18.7 million (Rs 52 crores) to India for the financial year 1999-2000. This includes AUS $ 14.2 million (Rs 40 crores) under the bilateral programme to enable investments in ongoing project activities in the education, environment and capacity building areas, as well the development of a new programme pipeline in the water supply and sanitation, health and rural development sectors. The remaining Aus $ 4.5 million is for Global NGO programmes in the areas of Poverty alleviation, Women Development etc. implemented through Australian NGOs.

2.7 In addition to the above AUS AID have also indicated a budget of AUS $ 19 million (Rs 51.3 crores) to support the National responses to the HIV/AIDS epidemic in Delhi and three North- Eastern States of Manipur, Meghalaya and Mizoram. The Feasibility Design Study for this project has recently been given to Australian Training and Capacity Building". The duration of this project is 3 year with total allocation of AUS $ 12 million. It provides for training of Indian Government personnel in Australia and India in the fields of HRD, Women & Child Development, Power, Environment & Forests, Health, Railways, Textiles and Revenue. The MoU for the project was signed on 11-12-97.

2.8 Under this main project, there are a number of sub projects on bio-diversity conservation, urban local bodies, protection of forests from fires, rural electrification, low cost solar passive housing, sustainable development of industrial estates, disaster management etc. which have been started recently. The project Co-ordination Committee, where AUS AID, DEA and project related officials are represented, meets twice a year under the chairmanship of JS(Japan) to grant approval to proposed sub- projects taking into consideration the opinion of the line ministries concerned. The Technical Review Committee also meets twice a year to review the on-going sub-projects.

2.9 (a) The Australian ODA to India in previous years is given below :

(In A $ Million)


Disbursement Amount















2.10 The details of Loans and Grants are given in Annexure I and II respectively.