Brown pledges $1.6 bn for India's development

NEW DELHI: British Prime Minister Gordon Brown pledged US$1.6 billion (euro1.1 billion) for development programs in India ahead of talks Monday with Prime Minister Manmohan Singh and President Pratibha Patil on building stronger financial ties.

Brown is visiting New Delhi with a large delegation of British business leaders after spending two days in China, on his first trip to Asia as prime minister.

His whirlwind tour of the two emerging superpowers has focused on expanding trade and investment and on cooperation in controlling climate change.

In India, Brown has also concentrated on development issues, pledging US$1.6 billion (euro1.1 billion) from Britain over three years for development programs.

While India's burgeoning middle class and gradually opening domestic markets are bolstering foreign investment interest, growing prosperity has failed to reach giant swaths of India's population, particularly in rural areas.

Brown said 500 million pounds (US$980 million; euro670 million) will be spent on health and education, providing 300,000 more teachers.

``Over the last few years, India has made great progress in tackling poverty and sustaining economic development,'' Brown said Sunday after attending a meeting on women's issues to discuss problems such as the high maternal death rate and the practice of aborting female fetuses.

``But some grave challenges remain,'' he added. ``The U.K. is keen to play its part and work in partnership with India to fight poverty.''

Brown was to receive a formal welcome Monday from Singh at Rashtrapati Bhavan, the red sandstone colonial-era presidential palace, before laying a wreath at the memorial to Mahatma Gandhi.

Brown also was to attend a degree awards ceremony and launch a sports program at the University of Delhi.

As he did in China, Brown is pushing for closer economic ties with India as it gradually opens up its domestic markets.

Singh has led economic liberalization despite opposition from left-wing political allies that has held up some reforms in India, which still bans foreign multiple-brand retailers such as Wal-Mart Inc. from opening stores or wholesale operations in the country.

Among the Indian government's current plans is raising the limit on foreign equity stakes in local insurers to 49 percent from 26 percent.

Brown noted the success of British telecommunications company Vodafone Group PLC in India. Vodafone boss Arun Sarin is part of the business delegation, which also includes Virgin Group Chairman Richard Branson.

Eager to talk up what he termed ``a partnership of equals,'' Brown also highlighted India's growing involvement in international mergers and acquisitions.

Ford Motor Co. earlier this month named India's Tata Motors Ltd. as the top bidder for its Jaguar and Land Rover brands.

Tata Motors is just one subsidiary of the sprawling family-owned Tata conglomerate that makes everything from automobiles to steel and software, and has been little known outside India until recently.

Brown said there are US$10 million (euro6.8 billion) of contracts between the two countries in the pipeline.

Brown also said Sunday he would discuss greater contacts between national security agencies and the introduction of more sophisticated airport security systems with Singh.

Brown is pushing for India to be allowed to join the Financial Action Task Force, an intergovernmental group that works to stem money laundering and terrorist financing. The 30-plus members of the task force are currently developed nations, with the exception of China, which was granted membership last year.