By Chris Morris BBC News, Madhya Pradesh

Malka Bi's little boy was born in a UK-aided clinic

In the heart of India, in a small clinic in rural Madhya Pradesh, a baby just two hours old and as yet unnamed is lying in his mother's arms.

He has been born into a precarious world. About 7% of children in Madhya Pradesh die before they reach their first birthday and 60% under the age of three are malnourished. That is worse than in Africa.

Dr Gujraj Singh Gurjar, a local health worker in the village of Jawa, says help is urgently needed.

"How can we improve it? I don't know," he says.

"We make do with what we have. There's a saying: 'Trying to fit a lake into a bowl'. That's what it's like here."

And that is why this is the kind of rural health scheme the British government is funding through the Department for International Development (Dfid).

It gives about �60m ($117m) a year to the state government in Madhya Pradesh for health projects alone.

Incentives

It is hard to say exactly where the money goes, and whether it is spent well or wasted. It all goes into a single pot. But the desire for more is self-evident.

"Of course," says Anita Dugaya, from the National Rural Health Mission, "our goal is no more maternal deaths, no more infant deaths."

So simple things, like giving small financial incentives to women to give birth in the relative safety of clinics, can make a difference.

Would it be better to give directly to small projects or NGOs?

In some cases it almost certainly would. But most development aid is government to government. It is not perfect, but that is what Dfid does.

Still, Britain seems to be putting its money where its mouth is.

When Prime Minister Gordon Brown arrived in India on Sunday his first port of call was neither a big business meeting, nor a room full of politicians.

Instead he met a group of impoverished women who had gathered to tell him some of their stories.

Main recipient

India may have a booming economy and it is emerging as a global power, but it is also home to about one in three of the world's very poorest people.

The prime minister announced further funding to help those being left behind.

"Today we are putting aside �825m [$1.6bn] for the next three years," he said, "to provide new opportunities to Indian girls and boys."

Britain is now the 2nd largest donor of development aid in the world, and India is its biggest single aid programme.

And it is not only remote rural locations which need assistance.

In Gurgaon, on the outskirts of Delhi, British development money is helping schools which are offering free meals and flexible class times to try to increase enrolment rates. Millions of Indian children never go to school.

But this is a complex relationship. Gurgaon is also home to the gleaming high-rise headquarters of some of India's and the world's most powerful companies.

Following the money

Alongside development issues, and sometimes in competition with them, there is massive British interest in doing business here.

Most Indians have to get by on less then $2 a day

"This is a place," says one British businessman, "that we cannot afford not to be in. It's not optional, it's do or die."

And it is not just British business entering the Indian market either.

Indian companies are investing enormous sums of money in the UK. This is a relationship in transition, with India becoming a more powerful partner.

All of which begs a question: why is Britain giving so much development aid to a country with such a rapidly growing economy and almost infinite potential?

"It's a good question," says Susannah Moorehead, the head of Dfid in India.

"It's because the British government along with many other signatories is committed to achieving the [UN] Millennium Development Goals. And we won't achieve that unless we do it here in India."

There are at least 350 million people in India living on less than 50 pence [$1] a day. The same number again - if not more - live on less than a pound [$2] a day.

"We can make real progress," Ms Moorehead says, "if we work with a reforming Indian government to make sure some of these terrible statistics, particularly on health and education, come down."