07/12/2012 12:42 GMT | Updated 05/02/2013 05:12 GMT

Building Indian Civil Society

The long-running debate over whether or not the UK should give state aid to India appears to have been settled with Justine Greening's announcement that the Department for International Development will cease sending money to India from 2015.

This will save the UK government around £200m. Critics of UK state aid argued that India can afford to do without the UK's financial assistance - with GDP growth as high as 8%, India has all it needs to move into the next league. But this somewhat misses the point about the value that foreign aid can bring. The pressing and immediate question is how to target increasingly limited resources to improve the effectiveness of foreign support, build Indian civil society and local democratic institutions, and leave a sustainable legacy from our involvement in India.

A conservative estimate suggests there are almost 300 million people living in poverty in India. Despite growing national wealth, constitutional protections for marginalised groups, and the empowerment of local democratic institutions, civil society organisations on the ground are struggling to alleviate the plight of the poorest and lowest castes, and ensure their inclusion in the development process. How, then, can we effect positive change for this large population with less overall funding? How do we, as leading Indian scientist and thinker Dr Ram Mashelkar has outlined, get "more from less for more"?

This puzzle requires honestly asking what it is foreign aid has achieved and is trying to achieve, and re-focusing our efforts on building capacity and resilience amongst Indian civil society. Through better targeting, better analysis of impact, better learning processes and greater focus of the limited resources on enhancing human capacities of the poorest we can ensure their lives begin to change significantly and non-state support is targeted where need is greatest.

Reductions in aid over time have meant that organisations have had to look at alternative ways of achieving their goals. Among the positives that have begun to emerge is a focus on knowledge creation and retention. Foreign aid agencies have played an important part in providing funds for innovations in development and providing the space for social entrepreneurs to explore, experiment and create models for development. There has also been a strong stress on building partnerships between government, foreign support and Indian civil society. This partnership has the potential to ensure limited international funding can have a multiplier effect and achieve 'more from less'. NGOs can provide skills and advice to local democratic institutions, enabling them to marshal the growing resources of the state to improve the lives of people who have been marginalised. Therefore rather than look at aid agencies in isolation or just look at their partnership with civil society organisations , it may be more useful to take a wider view and consider developing a more strategic, long term association between aid agencies, civil society and government.

Paul Hamlyn Foundation has been working in India for 22 years, supporting 140 Indian NGOs during that time with funding of around £9.2m. In our work with Indian NGOs we have sought to help them to leverage resources from government. This has been most successful in areas such as livelihoods where the government has been more focused in recent years. But we have also been effective in leveraging non-financial support, including attempts at improving policies aimed at the most vulnerable.

A funder's approach to and relationship with its grantees can have a huge impact upon their achievements. As a matter of course, all PHF grantees undergo a development programme for governance and financial management, and in many instances this has led to much greater organisational resilience and an increased ability to look at a more diverse set of options to secure funding.

This month, as part of our 25th anniversary celebrations, we are making a special endowment to Jaipur Foot, an organisation which provides prosthetic limbs to people suffering from loco-motor disabilities. Jaipur Foot has helped 1.3 million people across India and other developing nations, and is today one of the largest disability organisations in the world. Our support for Jaipur Foot is a powerful example of how long-term funding relationships with organisations can build their capacity and enable them to flourish, and the organisation has now set up camps in response to need in more than 15 other developing countries, including Afghanistan, Rwanda and Sudan.

Innovative models of funding must be explored and better understood if Indian organisations are to become self-sufficient catalysts for positive change. Indian civil society has huge potential but the sector must be strengthened. Whatever the rights or wrongs of the UK government's decision to withdraw state aid from India, now is the time for non-state funders to redouble our efforts and work towards a stronger civil society in India, working with local democratic institutions to secure the better distribution of wealth and power among its people. If we can achieve this, then we will leave a meaningful long-term legacy of UK funding.

Visit to discover more about the Paul Hamlyn Foundation.