MPs question future of aid money for India
The UK must "fundamentally" change its aid relationship with India after 2015 by giving less to the increasingly prosperous country, MPs say.
The international development committee backed the government's decision to continue providing £280m a year in the short term to combat poverty.
But it called for a redirection of money towards priorities such as improving hygiene and education.
The government said this "endorsed" its own approach to aid for India.
The UK continuing to help India while the south Asian nation's own government spends large sums on projects such as a space programme has attracted criticism.
The coalition has promised to spend 0.7% of gross national income on overseas aid and India is the biggest single recipient of that aid.
In its report the committee agreed with ministers that the existence of "large pockets of poverty" within the country justified the maintenance of UK aid for the immediate future.
But it expressed concerns at a lack of experience within the Department for International Development (DfID) in dealing with the private sector, through which half the money is expected to be invested.
They demanded "greater clarity" on which projects would be the most effective.
DfID also needed to be "more rigorous" in choosing initiatives to support and give more attention to improving sanitation and reducing social exclusion, the committee said.
Its report said: "We support the UK's continued development assistance to India for the period up to 2015.
"However after this the development relationship must change fundamentally to one based on mutual learning and technical assistance where requested."
The committee's chairman, Liberal Democrat MP Malcolm Bruce, said: "The test of whether the UK should continue to give aid to India is whether that aid makes a distinct, value-added contribution to poverty reduction which would not otherwise happen. We believe most UK aid does this.
"The Indian government has primary responsibility for poverty reduction. It has put up taxes and increased its social spending, but the poverty there is on such an extreme scale that it will take many years for India to achieve internationally agreed Millennium Development Goals."
However, Oxfam criticised the setting of arbitrary deadlines for the potential end of financial aid.
Senior policy adviser Max Lawson said: "This report clearly shows that UK aid plays an important role in tackling poverty in India, a country with more poor people than the whole of sub-Saharan Africa.
"MPs are right to say that we should keep our aid under review. But future aid to India should be determined by the needs of poor people there and the ability of their government to help them, not by any arbitrary deadline."
A DfID spokesman said: "We're glad that this report by the cross-party International Development Committee endorses our approach to delivering aid in India."