Some of the International funding agencies have special terms for economic participation stipulating a substantial component of the aid to be used for sourcing equipment from the leading countries. Discuss on merits of such terms and if, there exists a strong case not to accept such conditions in the Indian context.

Influence of donors and Charities

Positive side

1. Necessary financial resource mobilisation for major infrastructure projects. → Tehri dam funded by World Bank.

2. Helped India come out of economic crisis. → IMF's 1991 economic package.

3. provides expertise and capacity building for taking up major projects. → World Bank provided support to DBT initiative.

4. promoted rapid industrialisation by supplementing & complimenting government efforts.

5. NGOs like Ford Foundation fund numerous NGOs in India which work at grassroots in education, health, etc.

Negative impact and issues with foreign donors →

1. non-transparent allocation of funds.

2. allocating fund to sponsor anti development and anti-India activities. → IB Report stated protests by NGOs against Kudankulam power plant as foreign funded activism.

3. numerous conditionalities on loans and grants impacting sovereign decision making.

4. sectoral and regional bias in funds.

5. damage and degradation of environment by use of funds.

6. ignoring local concerns, causing tribal displacement due to development projects.

Ways to ensure foreign aid aligns with national priorities and maintaining accountability →

1. Strict legal provisions for receiving foreign aid ex: FCRA 2020 amendment.

2. Regular review and audit of use of foreign aid.

3. Promoting transparency and accountability via RTI and social audit in utilisation of funds.

4. Strict legal action against any misuse of foreign aid against national interest.

5. call for reforms of major aid institutions like WBank, IMF, etc.