US Senator questions financial aid to India

Washington, Jul 19: Arguing that borrowing from countries which receive aid from the US is dangerous, a Republican Senator questioned the decision of the Obama Administration to give financial assistance to nations like India that has bought USD 39.8 billion of American debt bonds.

"Borrowing money from countries who receive our aid is dangerous for both the donor and recipient. If countries can afford to buy US debt, they can afford to fund their own assistance programmes," Tom Coburn said in his report ''Back in Black: A deficit Reduction Plan'', unveiling the most ambitious plan yet to break the debt ceiling stalemate.

In his 621-page report, Coburn referred to a recent Congressional Research Service (CRS) which revealed that the federal government gave USD 1.4 billion in foreign aid to 16 countries, including India and China, to whom the US owes USD 10 billion each.

According to the US Treasury Department, the largest holder of US debt is China, owning USD 1.1 trillion Treasury bonds and having received USD 27.2 million in foreign aid in FY2010. "Brazil held USD 193.5 billion in Treasury securities and received USD 25 million in foreign aid, Russia had USD 127.8 billion and received USD 71.5 million, and India held USD 39.8 billion and received USD 126.6 million from the US," the Senator said.

In a letter to Coburn on May 13, the CRS said India in 2010 received USD 126.6 million -- this includes USD 2.5 million for counter-terrorism, USD 700,000 for combating weapons of mass destruction, USD 30 million for fighting HIV/AIDS, USD 22 million for family planning, USD 19 million for maternal and child health and USD 13.7 million for fighting tuberculosis.

PTI